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NEWS ABOUT: securities fraud

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SEC Letting Big Banks Skirt Fraud Penalties

'New York Times' analysis finds 350 instances of banks getting free passes

(Newser) - The Securities and Exchange Commission has repeatedly allowed Wall Street's biggest banks to avoid penalties specifically intended to punish and deter fraud, a New York Times analysis of SEC records reveals. Over the past decade, the SEC has on almost 350 occasions granted waivers exempting big financial companies from... More »

Feds to Charge Crooked Bond Traders

Ex-Credit Suisse traders accused of bonus-boosting fraud

(Newser) - Looks like it's payback week: Federal prosecutors are planning to file fraud charges against four former Credit Suisse traders accused of overstating the value of mortgage securities in order to boost their bonuses, the Wall Street Journal reports. The alleged fraud happened in early 2008 as problems with complex... More »

Feds Nab 7 in $61.8M Stock Fraud Case

All that money made on trades of a single stock

(AP) - Seven people have been charged in an insider trading scheme that netted more than $61.8 million in illegal profits based on trades of a single stock, prosecutors announced today. Two New York hedge fund executives and a Massachusetts man were among four charged in a criminal complaint in federal... More »

Galleon Founder Slapped With $92.8M Civil Penalty

Convicted insider trader hit with record SEC fine

(Newser) - Galleon Group hedge fund founder Raj Rajaratnam has broken another record. The former billionaire, who received the longest-ever prison sentence for insider trading last month, has been ordered to pay the largest-ever Securities and Exchange Commission civil penalty for insider trading, reports the New York Times . The $92.8 million... More »

Mets' Owners Won't Lose All Their Madoff Money

Judge gives partial victory to both sides in lawsuit

(Newser) - The New York Mets' owners may have to return some of $300 million in profits they made dealing with Bernie Madoff, but their $700 million principal is probably safe. A judge has decided that for trustee Irving Picard to pursue the Mets owners' principal investment, he must prove that they... More »

'Amish Bernie Madoff' Busted

Ohio man accused of running $16.8m Ponzi scheme

(Newser) - We've had the Bernie Madoff of campaign treasurers , so now meet the Amish Madoff. A 77-year-old man in Ohio is accused of scamming thousands of investors in 29 states, mostly his fellow Amish, out of $16.8 million. Prosecutors say Monroe Beachy ran a Ponzi scheme for decades, telling... More »

Times May Have Crossed Line by Snooping Emails

Fabrice Tourre story based on laptop found in trash

(Newser) - The New York Times today has a lengthy backgrounder on the case of Fabrice Tourre, the young Goldman Sachs trader sued by the SEC on allegations of fraud. What has caught the eye of most bloggers, though, isn't any revelations in the story but the way it was sourced:... More »

Insider Trading Suspect Jumps to His Death

Seattle Genetics exec was accused of sharing clinical trial results

(Newser) - An executive accused of illegally profiting from inside knowledge of his company's promising new cancer drug jumped to his death from an airport parking garage in New Jersey. Zizhong Fan, manager of clinical programming at Seattle Genetics, is believed to have shared insider information on clinical trials involving the... More »

Alleged Ponzi Schemer Judged Unfit to Stand Trial

R. Allen Stanford 'mentally impaired,' judge decides

(Newser) - Jailed Texas billionaire R. Allen Stanford is mentally impaired and incompetent to stand trial, a federal judge ruled yesterday. Psychiatrists testified that Stanford, who is accused of masterminding a $7 billion Ponzi scheme, is suffering from a major depressive disorder, an addiction to anti-anxiety medication, and a brain injury he... More »

Investors Sue Countrywide Over 'Massive Fraud'

Their triple-A-rated securities are now junk, they claim

(Newser) - Investors are suing Bank of America’s Countrywide mortgage unit, claiming they were fraudulently led into purchasing supposedly triple-A-rated mortgage-backed securities that turned out to be junk. Between 2005 and 2007, the investors bought hundreds of millions of dollars of securities that were supposed to be “conservative” and “... More »

HSBC Sued for Aiding Bernie Madoff

Trustee says bank enabled fraud by ignoring warning signs

(Newser) - Bernie Madoff's Ponzi scheme survived for so long because HSBC ignored "red flags" and kept funneling investors' money to the fraudster, says the trustee trying to reclaim money for Madoff's victims. Irving Picard is suing the bank and a group of feeder funds for at least $9 billion, the... More »

White-Collar Sentences: Too Harsh, or Too Soft?

Loss calculations wildly swing the scale, as in the case of Bruce Karatz

(Newser) - Should Bruce Karatz spend half a decade in prison—or no time at all? Karatz, the ex-CEO of KB Homes, has been convicted of trying to swindle the company out of $11 million. The probation office says he should get eight months' home confinement. But prosecutors want to lock him... More »

Money Manager Crook Who Faked Death Gets 10 Years

Marcus Schrenker jailed for securities fraud

(Newser) - An Indiana money manager who scammed his friends and then tried to fake his own death in a plane crash has been sentenced to 10 years in a state prison for fraud. Marcus Schrenker will serve that sentence consecutively with a 4-year federal sentence he received last year for parachuting... More »

SEC Sues Sex Cruise Investment Firm

Funds used to pay for strippers, go-go dancers

(Newser) - The bosses of an upstate New York investment firm used investors' cash to finance their own lavish lifestyles and to underwrite business ventures like a swingers' cruise line, according to an SEC lawsuit. The assets of McGinn, Smith & Co. have been frozen by court order while SEC investigators probe... More »

Madoff's Brother Target of Crime Probe

Peter Madoff subject of 'wide-ranging' Ponzi scheme inquiry

(Newser) - Finance's most-tarnished family name took another hit yesterday when it emerged that Peter Madoff is the target of a criminal probe relating to big brother Bernie's Ponzi scheme. A court filing states that the Manhattan US attorney's office is conducting an "active and wide ranging" probe of Peter, who... More »

Whistleblowers: SEC Ignored Us

Flawed process allowed Ponzi schemes to go undetected

(Newser) - The SEC's haphazard method of dealing with whistleblowers means violations go unpunished and frauds left uncovered for years, insiders say. Many informants—including one whose information could have exposed Bernie Madoff's Ponzi scheme—say they were ignored, misunderstood, or sidelined after approaching the regulator with tip-offs, the Washington Post reports.... More »

Crooked Giants Dodge SEC Penalties

Agency routinely grants waivers for harshest punishments

(Newser) - Financial giants accused of swindling investors have been successfully dodging the SEC's harshest penalties by arguing that the law shouldn't apply to them. Firms including Citigroup, Bank of America, and AIG have recently sought and received waivers from regulations requiring lawbreakers to close their mutual fund businesses. Waivers have been... More »

Madoff HQ Was 'Coke-Fueled Animal House'

Ponzi kingpin now sharing cell with drug offender

(Newser) - Bernie Madoff ran the druggiest, most decadent securities fraud in town, according to court papers filed yesterday. Madoff's offices were so awash in cocaine—paid for with investors' money—that it was nicknamed "the North Pole," and the firm hosted drug-fueled parties featuring topless waitresses, according to a... More »

First Major Financial Crisis Trial Begins

Bear Stearns execs accused of lying as funds imploded

(Newser) - The first major criminal trial against top Wall Street execs involved in the financial crisis kicked off in New York yesterday. Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin are accused of misleading investors in a desperate attempt to stop them from abandoning the funds, even as they... More »

Only Half of Madoff's Clients Lost Money

The rest withdrew more than they invested, prosecutors say

(AP) - Federal prosecutors said yesterday that a review of most accounts held by Bernard Madoff's customers when he was arrested shows that about half of the customers had not lost money because they withdrew more than they originally invested. That doesn't, however, take into account the loss of any money they... More »

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