Articles and Resources
Date Fairness.com Resource Read it at: Aug 21, 2016 To Crack Down on Securities Fraud, States Reward Whistle-Blowers
QUOTE: In the aftermath of the financial crisis, a growing army of confidential informants — better known as whistle-blowers — has helped federal securities regulators identify and prosecute wrongdoers. Now the same thing is happening at the state level...
New York Times May 30, 2016 MetLife Suit Raises Questions of Extent of Corporate Liability
QUOTE: some others who lost their money are suing MetLife, claiming that the insurer ignored or failed to notice signs that agents and brokers were peddling Mr. Friedman’s financing program to retirees and others....MetLife has argued in court documents that it “had no relationship with D.L.G.” and that it “did not sell, or materially assist in the sale” of the D.L.G. financing program. Neither was it legally obligated to supervise the broker who made the sale to Ms. Ramirez, MetLife said, because he was a contractor and licensed through another, unaffiliated broker-dealer, even though he was authorized to sell MetLife insurance products.
New York Times Feb 10, 2013 Complex Investments Prove Risky as Savers Chase Bigger Payoff
QUOTE: Regulators across the country are confronting a wave of investor fraud that is saddling retirement savers with steep losses on complex products that until a few years ago were pitched only to the most sophisticated investors. The victims are among the millions of Americans whose mutual funds and stock portfolios plummeted in the wake of the financial crisis, and who started searching for ways to make better returns than those being offered by bank deposits and government bonds with minuscule interest rates.
New York Times Feb 04, 2013 U.S. Accuses S. & P. of Fraud in Suit on Loan Bundles
QUOTE: The Justice Department filed civil fraud charges late on Monday against the nation's largest credit-ratings agency, Standard & Poor's, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck....From September 2004 through October 2007, S.&P. "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors" in certain mortgage-related securities, according to the suit filed against the agency and its parent company, McGraw-Hill Companies. S.&P. also falsely represented that its ratings "were objective, independent, uninfluenced by any conflicts of interest," the suit said.
New York Times Mar 19, 2012 Mets’ Owners Agree to Settle Madoff Suit for $162 Million
QUOTE: the owners agreed to pay the trustee $162 million, but that figure is likely to be reduced or wiped out altogether as the complex bankruptcy litigation involving Mr. Madoff’s investment operation plays out. The trustee, Irving H. Picard, had initially sought $1 billion, declaring that the owners had enriched themselves over many years of profitable investing with Mr. Madoff while ignoring repeated warnings that he might have been a fraud.
New York Times Sep 02, 2011 Federal Regulators Sue Big Banks Over Mortgages
QUOTE: A bruising legal fight pitting the country’s most powerful banks against the full force of the United States government began Friday, as federal regulators filed suits against 17 financial institutions that sold the mortgage giants Fannie Mae and Freddie Mac nearly $200 billion in mortgage-backed securities that later soured.
New York Times May 24, 2011 Members of Congress Get Abnormally High Returns From Their Stocks
QUOTE: "In the course of performing their normal duties, members of Congress have access to non-public information that could have a substantial impact on certain businesses, industries or the economy as a whole. If used as the basis for common stock transactions, such information could yield significant personal trading profits," they wrote.
Huffington Post May 11, 2011 Next Up, a Crackdown on Outside-Expert Firms
QUOTE: In several indictments involving expert networks, authorities claim that hedge fund managers paid outside consultants handsome fees for providing nonpublic information. The government has also charged executives at the expert network firms, the ones who brokered the connections, with knowingly facilitating the exchange of illegal stock tips.
New York Times May 11, 2011 Prosecutors’ Hardball Tactics Produce Big Results in Galleon Case
QUOTE: Will the conviction of Raj Rajaratnam, the founder of the hedge fund firm Galleon Group, change anything on Wall Street?....Government crackdowns on insider trading tend to run in cycles. The last one that received as much attention was the Wall Street sweep in the 1980s that resulted in the convictions of Ivan Boesky and Michael R. Milken...
New York Times Apr 27, 2011 A.I.G. to Sue 2 Firms to Recover Some Losses
QUOTE: A.I.G. is preparing several suits against banks, like Bank of America and Goldman Sachs, that created the $40 billion in mortgage bonds… The company says it believes the banks issued misleading statements about the quality of the mortgages within those bonds.
New York Times Apr 23, 2011 A Crack in Wall Street’s Defenses
QUOTE: “Citigroup mismarketed this product to high-net-worth investors as an alternative to municipal bonds with a slightly higher return… Our clients never knowingly agreed to risk a significant loss of principal for a few extra points of interest.”
New York Times Apr 12, 2011 The Real Housewives of Wall Street
QUOTE: What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy... It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure.
Rolling Stone Dec 22, 2010 N.Y. Attorney General Cuomo sues Ernst & Young, alleging Lehman accounting fraud
QUOTE: The big accounting firm Ernst & Young helped Wall Street investment bank Lehman Brothers conceal its deteriorating financial condition before Lehman's historic collapse, New York Attorney General Andrew Cuomo charged...
Washington Post Dec 17, 2010 U.S. arrests 4 in insider trading probe centered on hedge fund industry
QUOTE: A national investigation into insider trading escalated Thursday with the arrest of four executives accused of trafficking in confidential corporate information...Those arrested by the Justice Department and FBI included several figures suspected of channeling secrets from technology companies to hedge funds that then traded on that information
Washington Post May 28, 2010 SEC settles charges with Pequot firm over insider trading
QUOTE: ...withering criticism from lawmakers that the agency had mishandled an earlier investigation of the matter. Pequot Capital Management and its chief executive, Arthur Samberg, agreed to pay $28 million to settle the SEC's charges that the firm traded shares of Microsoft based on insider information.
Washington Post May 22, 2010 No criminal charges for executives in troubled AIG subsidiary
QUOTE: The Justice Department has closed its high-profile investigation into current and former executives of an American International Group subsidiary that was linked to the insurance giant's near collapse, sources familiar with the probe said Friday evening.
Washington Post May 21, 2010 SEC launches inquiry into market's 'flash crash'
QUOTE: The Securities and Exchange Commission is looking at whether key financial firms broke securities laws when they stopped buying and selling stocks during the "flash crash" on May 6, helping fuel the historic plunge in prices.
Washington Post May 21, 2010 Suddenly, the Rating Agencies Don’t Look Untouchable
QUOTE: several major lawsuits against the rating agencies have survived the pretrial phase and might — emphasis on might — end with huge jury verdicts or expensive settlements. In addition, a newly emboldened Congress is on the verge of overhauling financial regulation and could rewrite the rules of the industry. For S.& P., Moody’s and Fitch,...
New York Times May 18, 2010 Clients Worried About Goldman’s Dueling Goals
QUOTE: Goldman’s bets against WaMu, wagers that took place even as it helped WaMu feed a housing frenzy that Goldman had already lost faith in, are examples of conflicting roles that trouble its critics and some former clients. While Goldman has legions of satisfied customers and maintains that it puts its clients first, it also sometimes appears to work against the interests of those same clients when opportunities to make trading profits off their financial troubles arise.
New York Times May 12, 2010 Prosecutors Ask if 8 Banks Duped Rating Agencies
QUOTE: The New York attorney general has started an investigation of eight banks to determine whether they provided misleading information to rating agencies in order to inflate the grades of certain mortgage securities, according to two people with knowledge of the investigation.
New York Times Apr 16, 2010 S.E.C. Accuses Goldman of Fraud in Housing Deal
QUOTE: Goldman Sachs, the Wall Street powerhouse, was accused of securities fraud in a civil lawsuit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly intended to fail.
New York Times Sep 03, 2009 After Its Madoff Report, Can Victims Sue the SEC?
QUOTE: Howard Elisofan, a partner at Herrick, Feinstein LLP and a former SEC enforcement attorney, launched a legal action against the SEC on behalf of a victim, Phyllis Molchatsky, last December.
Time Magazine Sep 02, 2009 Report Details How Madoff’s Web Ensnared S.E.C.
QUOTE: “despite numerous credible and detailed complaints,” the S.E.C. never took “the necessary, but basic, steps to determine if [Bernard L.] Madoff was operating a Ponzi scheme.”
New York Times Jul 07, 2009 Florida aided Allen Stanford, suspect in huge swindle: Florida regulators -- over objections by the state's top banking lawyer -- gave sweeping powers to banker Allen Stanford, accused of swindling in
QUOTE: Over objections by the state's chief banking lawyer -- including concerns that [Allen] Stanford was laundering money -- regulators granted sweeping powers never given to a private company.
Miami Herald Jan 23, 2009 Beyond Madoff, Ponzi Schemes Proliferate
QUOTE: Since Bernard Madoff's arrest last month, the Securities and Exchange Commission (SEC) has busted three new Ponzi scams, though none are as spectacular as Madoff's $50 billion whopper....As for a post-Madoff enforcement on Ponzis, Heine says there's been no official push to go after Ponzi schemers.
Time Magazine Jan 08, 2009 Nationwide Inquiry on Bids for Municipal Bonds
QUOTE: appears to be collusion among the banks and other companies that have helped state and local governments take approximately $400 billion worth of municipal notes and bonds to market each year....companies did not engage in open competition for this lucrative business, but secretly divided it among themselves, imposing layers of excess cost on local governments, violating the federal rules for tax-exempt bonds and making questionable payments and campaign contributions to local officials who could steer them business.
New York Times Dec 24, 2008 In Madoff Scandal, Jews Feel an Acute Betrayal
QUOTE: Here is a Jew accused of cheating Jewish organizations trying to help other Jews, they say, and of betraying the trust of Jews and violating the basic tenets of Jewish law. A Jew, they say, who seemed to exemplify the worst anti-Semitic stereotypes of the thieving Jewish banker....In addition to theft, the Torah discusses another kind of stealing, geneivat da’at, the Hebrew term for deception or stealing someone’s mind. “In the rabbinic mind-set, he’s guilty of two sins: one is theft, and the other is deception,” said Burton L. Visotzky, a professor at the Jewish Theological Seminary.
New York Times Dec 24, 2008 Federal Cases of Stock Fraud Drop Sharply
QUOTE: At the S.E.C., agency investigations that led to Justice Department prosecutions for securities fraud dropped from 69 in 2000 to just 9 in 2007, a decline of 87 percent...
New York Times Dec 21, 2008 Even Bernard Madoff Doesn't Deserve This
QUOTE: when it comes to large-scale frauds involving public companies and their millions of shares, the guidelines' grounding in mathematics sometimes results in sentences that are, quite literally, off the charts. They fall within the realm of prison terms usually reserved for Mafia bosses, major international drug lords, cop killers, child molesters and terrorists.
Washington Post Dec 20, 2008 Madoff Scheme Kept Rippling Outward, Across Borders
QUOTE: whatever else Mr. Madoff’s game was, it was certainly this: The first worldwide Ponzi scheme — a fraud that lasted longer, reached wider and cut deeper than any similar scheme in history, entirely eclipsing the puny regional ambitions of Charles Ponzi, the Boston swindler who gave his name to the scheme nearly a century ago.
New York Times Dec 18, 2008 On Wall Street, Bonuses, Not Profits, Were Real
QUOTE: Merrill’s record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value. Unlike the earnings, however, the bonuses have not been reversed.
New York Times Dec 18, 2008 Madoff Scandal Shaking Real Estate Industry
QUOTE: Almost no segment of New York City’s real estate industry was spared in the Madoff scandal, which may be history’s largest Ponzi scheme....Mr. Madoff (pronounced MAY-doff) managed his funds much the way that real estate leaders have operated successfully for decades: He provided little information and demanded a lot of trust.
New York Times Dec 12, 2008 Prominent Trader Accused of Defrauding Clients
QUOTE: this consummate trader, Bernard L. Madoff, was arrested at his Manhattan home by federal agents who accused him of conducting a multibillion-dollar fraud scheme — perhaps the largest in Wall Street’s history.
New York Times Jul 04, 2008 Lawyers Press Russian Case Against a U.S. Bank
QUOTE: A team of American trial lawyers sharpened their arguments Thursday that the Bank of New York Mellon should be held civilly liable for $22.5 billion in damages under United States law for a money-laundering scandal in the late 1990s that helped undermine the Russian economy.
New York Times Jun 09, 2008 Derivatives Trading Is Scrutinized
QUOTE: One of the nation’s top central bankers called Monday for a significant overhaul in regulation of the financial industry, declaring that the current system of supervision is confusing and susceptible to “perverse” abuses. The official, Timothy Geithner, the president of the Federal Reserve Bank of New York and one of the chief architects of the Bear Stearns bailout, said banks and government regulators must take pre-emptive steps to prevent future disruptions from snowballing into crises.
New York Times Jun 09, 2008 From a Whistle-Blower to a Target
QUOTE: On May 14, 2001, Joseph A. Ripp, the newly appointed chief financial officer of America Online, faxed a letter to the Las Vegas offices of the accounting firm Arthur Andersen with disturbing news: it appeared that an AOL business partner, and Arthur Andersen client, had forged a signature on a contract and booked several million dollars of sham revenue.
New York Times May 29, 2008 Ex-EADS Chief Detained in Inquiry
QUOTE: In the insider trading case, regulators and judicial officials are investigating the possibility that as many as 17 executives of Airbus and EADS knew as early as June 2005 that development costs and production delays at Airbus would lead to a decline in profit.
New York Times May 29, 2008 In Stock Plan, Employees See Stacked Deck
QUOTE: Now that many U.S. Sugar workers are reaching retirement age, though, the company has been cashing them out of the retirement plan at a much lower price than they could have received. Unknown to them, an outside investor was offering to buy the company — and their shares — for far more. Longtime employees say they have lost out on tens of thousands of dollars each and millions of dollars as a group, while insiders of the company came out ahead.
New York Times May 19, 2008 SEC Sues 8 Former AOL Officials: Regulator Alleges Inflation of Online Ad Revenue
QUOTE: In the complaints filed in a federal court in Manhattan, the SEC contended that the former AOL executives "knowingly or recklessly engineered, oversaw and executed a scheme to artificially and materially inflate the company's reported online advertising revenue."
Washington Post May 03, 2008 Fugitive Financier Vesco Is Said to Have Died
QUOTE: If Mr. Vesco indeed eluded the American authorities until his final day, it was the fitting end to his nearly four decades on the run. He was wanted for, among other things, bilking some $200 million from credulous investors in the 1970s, making an illegal contribution to Richard M. Nixon’s 1972 presidential campaign and trying to arrange a deal during the Carter administration to let Libya buy American planes in exchange for bribes to United States officials.
New York Times Mar 19, 2008 What went wrong
QUOTE: For the critics of modern finance, Bear's swift end on March 16th was the inevitable consequence of the laissez-faire philosophy that allowed financial services to innovate and spread almost unchecked. This has created a complex, interdependent system prone to conflicts of interest. Fraud has been rampant in the sale of subprime mortgages.
Economist Mar 18, 2008 Amid Brokers' Woes, Investor Accounts Are Mostly Protected
QUOTE: ...Bear's situation raises concerns about what could happen to individual investors if a major brokerage firm goes under. Fortunately, the system of regulatory rules in place should protect most investors.
Wall Street Journal, The (WSJ) Feb 22, 2008 Suit Says Spinal Disk Maker Falsely Won F.D.A. Approval
QUOTE: A patient suing the maker of an artificial spinal disk now says the original maker of the device...and the investment firm that financed its development misled patients and federal regulators about the disk’s safety and effectiveness.
New York Times Jan 26, 2008 Reviewer of Subprime Loans Agrees to Aid Inquiry
QUOTE: A company that analyzed the quality of thousands of home loans for investment banks has agreed to provide evidence to New York state prosecutors that the banks had detailed information about the risks posed by ill-fated subprime mortgages. Investigators are looking at whether that information...was deliberately withheld from investors.
New York Times Jan 23, 2008 Who's to Blame? Why capitalists are capitalism's most dangerous enemy.
QUOTE: No one can have watched the subprime mortgage debacle without noticing the absurd contrast between the magnitude of the failure and the lavish rewards heaped on those who presided over it...Everyday Americans will conclude (rightly) that this brand of capitalism is rigged in favor of the privileged few.
Newsweek Jan 23, 2008 Too good to be true: Get rich quick or lost money quick?
QUOTE: The prospect of getting rich quick has great allure, but the hucksters making the promises are making the easy money.
Bankrate.com Jan 22, 2008 If Everyone’s Finger-Pointing, Who’s to Blame?
QUOTE: Two questions lie at the heart of many...[recent mortgage market] cases. The first is whether lenders and investment banks alerted borrowers and investors to the risks posed by subprime loans or securities backed by them. The second is how much they were legally obliged to disclose.
New York Times Dec 02, 2007 U.S. Credit Crisis Adds to Gloom in Arctic Norway
QUOTE: these Norwegian towns are links in a chain of misery....duped by Terra’s brokers, who did not warn them that these types of securities were risky and subject to being cashed out, at a loss, if their market price fell below a certain level.
New York Times Oct 09, 2007 Court takes up shareholder rights: In its biggest business case of the term, the high court examines the scope of investors' rights to sue in the wake of corporate fraud.
QUOTE: Securities laws and regulations make clear that company officials directly responsible for such fraud can be sued. But what about consultants, vendors, investment bankers, lawyers, accountants, and others who may have had knowledge of the fraud and engaged in deceptive actions that helped keep it quiet?
Christian Science Monitor Aug 17, 2007 Dell, Admitting Managers Inflated Sales Reports, Will Restate Income
QUOTE: The senior management of Dell regularly falsified quarterly returns from 2003 through 2006 to create the appearance that the company had met sales targets...
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