All articles by Bruce Carton – Page 11
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Blog
SEC Trial Scorecard Update: Jury Finds 'Feeder' Liable in Florida Ponzi Scheme
This running SEC Trial Scorecard tracks the SEC's trials and outcomes for FY 2015. To date in FY 2015, which began on October 1, 2014, the SEC has now had five trials in federal court reach a verdict (see the full list below). The most recent verdict was reached on ...
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SEC's Lawsuit Against Freddie Mac Execs Fizzles Out in Unusual Settlement
On Dec. 16, 2011, the SEC charged three former top executives of the Federal Home Loan Mortgage Corporation (Freddie Mac) with securities fraud. The SEC alleged that the executives "knew and approved of misleading statements claiming the companies had minimal holdings of higher-risk mortgage loans, including subprime loans." Yesterday, however, ...
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Batista Insider Trading Case: From ‘Landmark’ to ‘Turmoil’ to ‘Farce’
The already-bizarre Brazilian insider-trading case against former billionaire Eike Batista “desended into farce” this week when the presiding judge was charged with embezzling more than $360,000 in seized money to buy himself a bulletproof Land Rover and an apartment. Prosecutors also claim that Judge Souza destroyed documents pertaining to the ...
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India Sentences ex-Satyam CEO to 7 Years in Prison
Ramalinga Raju, former chairman and CEO of Satyam Computer Services, was found guilty in an Indian court this week and sentenced to seven years in prison for his role in “India’s Enron”—a $1 billion accounting fraud that was revealed in 2009. Raju also admitted in a letter to Satyam’s board ...
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Second Circuit Denies DOJ Petition for Rehearing in Newman Case
Today, in a ruling that may have significant consequences, the Second Circuit rejected the DOJ's petition for a rehearing in the landmark U.S. v. Newman insider trading case. The DOJ filed a "Petition for Panel Rehearing and Rehearing En Banc" in the Newman case on January 23, which was supported ...
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SEC Brings First Action on Whistleblower ‘Pre-taliation’
The SEC has filed its first enforcement action against a company for what the agency has previously labeled “pre-taliation”—using confidentiality agreements or other agreements to potentially stifle the whistleblowing process. The company in question was KBR, which will pay $130,000 in penalties. See inside for more details.
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SEC in the Movies: The Other Guys, Wall Street, Fletch ... What Else?
Recently, as my kids were watching Will Ferrell's movie, The Other Guys (2010), I learned that the film includes a scene in which Ferrell and his police partner, Mark Wahlberg, make a visit to the SEC to turn evidence over to a investigator. In the clip below, Ferrell tells the ...
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Citigroup: Law Firms at High Risk of Cyber-Attacks
In a recent internal report, Citigroup's cyberintelligence center warned employees that law firms are targets of attacks by foreign governments and hackers because they house valuable data concerning their clients' transactions and strategies.According to the NY Times, the Citigroup report alerted employees that cybersecurity at law firms remains weak as ...
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Ceresney Testifies on Enforcement's Budgetary Needs and Performance
Last week, Andrew Ceresney, Director of the SEC's Division of Enforcement, testified before the Capital Markets and Government Sponsored Enterprises subcommittee of the House Financial Services Committee. Ceresney provided the subcommittee with details on how the Enforcement Division would use a proposed increase in the SEC's budget for FY 2016, ...
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Jury Returns Mixed Verdict in Willie Gault Case, Part II: 'Negligent Fraud'
Yesterday I wrote here about the jury verdict reached this week in the SEC's trial against former Chicago Bears wide receiver Willie Gault. I wrote that "the jury found that Gault was not liable on any of the four fraud-related charges against him, but that he was liable on three ...
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March Madness! SEC Loses an AP for First Time Since FY 2013
As I observed here a year ago,It is hard to make anything 100% pure. Ivory Soap famously falls just short at 99.44% pure. Even Breaking Bad's Walter White could not get his blue-tinted methamphetamine purer than 99.1%.In FY 2014, however, the SEC maintained 100% perfection in its administrative proceedings. The ...
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SEC Trial Scorecard Update: Jury Returns Mixed Verdict in Willie Gault Case
After a verdict-free period that spanned three months, my SEC Trial Scorecard is finally back in action to report on yesterday's verdict in the SEC's case against former NFL wide receiver Willie Gault. This running SEC Trial Scorecard tracks the SEC's trials and outcomes for FY 2015. To date ...
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Utah Lawmakers Approve First 'White Collar Crime Offender Registry'
This week, legislators in Utah passed a bill that will require the state to establish a new "Utah White Collar Crime Offender Registry." The New York Times reports that the Registry, which is similar in concept to the sex offender registries now in every state in the U.S., will be ...
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Brazil's Landmark Insider Trading Case Derailed as Seized Cash Now Missing
When we last checked in on the Brazilian insider trading case against former billionaire Eike Batista, the case was, by all accounts, in "turmoil." As I discussed here, the criminal prosecution against Batista -- a landmark case that may make him the first person ever sent to prison in Brazil ...
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Second District Court Upholds SEC Use of Administrative Hearings
A hot topic on this blog of late has been the SEC's recent focus on bringing cases as administrative proceedings, an in-house type of action in which the agency has enjoyed extraordinary success. A related, and just as hot, topic has been the efforts of numerous respondents in these APs ...
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Congressman Lynch Offers First 'Post-Newman' Bill Banning Insider Trading
As I wrote here last month, the Second Circuit's decision in U.S. v. Newman has resulted in a flurry of recent pleas from people such as Mark Cuban, James Stewart and others for Congress to, finally, define the law of insider trading. On Monday, Congressman Stephen F. Lynch (D-Mass.) ...
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$500,000 SEC Whistleblower Award to Corporate Officer
The SEC announced today that it issued a sizable whistleblower award to a former corporate officer. The SEC stated that while corporate officers and directors are typically not eligible under the Dodd-Frank whistleblower statute to receive awards, the statute carves out an exception if an officer reports information concerning misconduct ...
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Level Global Co-Founder Files Lawsuit Against Prosecutors, FBI Agents
Remember back in November 2010 when the FBI launched a series of raids on hedge funds including Level Global Investors LP and Diamondback Capital Management LLC? These raids ultimately led to the convictions of Level Global co-founder Anthony Chiasson and Diamondback Capital’s Todd Newman on criminal insider trading charges. Shortly ...
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Batista Insider Trading Case in 'Turmoil' After Judge Seen Driving Seized Porsche
I've been following the interesting insider trading prosecution trial of former Brazilian billionaire Eike Batista that has been unfolding in Rio de Janeiro. Three years ago, Batista was worth $30 billion and was declared "the pride of Brazil" by Brazil's President. After the October 2013 collapse of his oil company, ...
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SEC Commish Wants Clarity on SEC Enforcement Policy
Image: SEC Commissioner Michael Piwowar is calling on the agency to create guidelines for when it will bring enforcement actions as administrative proceedings and when it will pursue cases in federal court. Given the SEC’s 100 percent success rate in administrative proceedings, he said in a speech, clarity on enforcement ...