Blog posts with "securities fraud"

A revelation regarding the source of key information driving recent foreclosure-abuse related settlements was recently announced. It was revealed that whistleblowers were, and continue to be, instrumental in exposing and assisting in the prosecution of the fraud and abuses perpetrated by multinational banks against homeowners. This press release from the newsroom of the nation’s leading whistleblower law firm in Washington, D.C., Kohn, Kohn & Colapinto announced the news: Today, the...

  A recent article from Reuters illuminated an interesting dilemma that the IRS is currently facing in reference to what may be the largest example of tax fraud in US history. The alleged fraud involves the improper handling of the transfer of mortgages into and out of a legal entity known as a Real Estate Mortgage Investment Conduit (REMIC), investments which totaled $3 billion in 2010 alone. The IRS allows for special tax treatment of REMICs, exempting the securities created by the REMIC f...

A new class of hackers has emerged: the Ponzi Hacker. Well maybe hackers perpetrating frauds isn't new, but assisting a billionaire to fool the Securities and Exchange Commission through clever coding as part of a much larger ponzi scheme is, well, novel. Yes, you guessed it, we're talking about good old Bernie Madoff. Here is a quote from the Register: "A federal grand jury has indicted two computer programmers on fraud and conspiracy charges for developing programs used by Bernard Madoff ...

  Lehman Brothers chapter 11 examiner's report has become available. Anton R. Valukas, chairman of the law firm Jenner & Block, performed the examination, and points the finger squarely at Lehman for culpability in the fall of the financial giant. Here are some quotes from the L.A. Times regarding the recent report:  "The uncompromising report should put to rest the self-serving claims by Lehman’s ex-Chairman Richard S. Fuld that the firm was destroyed by rumors, short selling, stoc...

  Arthur Nadel, the man described as "Mini-Madoff," will likely plead guilty to at least some of the charges leveled against him, securities, wire, and mail fraud, sometime later today in a Manhattan Federal court. Operating out of Sarasota, FL, Nadel conned investors out of $360 million in a ponzi scheme similar to Madoff's. Nadel potentially faces decades in prison.    

In the continuing story of the hi-jinks of Raj Rajaratnam, a new indictment was filed this past Tuesday by a New York Federal grand jury. Yet another player has been fingered in this fiasco, a consultant by the name of Danielle Chiesi. Though earlier allegations estimated Raj's ill-gotten gains at around $25 million, the new indictment puts the amount at closer to $50 million.   Just like in the TV shows, the truth comes out when people start squealing. In this case, a tipper (as in provided...

  Raj Rajaratnam, the billionaire founder of the Galleon Group that I wrote about in my last post has also been charged by the SEC in Federal court. The SEC claims Rajaratnam's scheme was massive (as illustrated in the diagram above), and generated more than $25 million. Other companies allegedly involved are IBM, Intel, and Mckinsey & Company.     What makes this development interesting is that the SEC is suing in civil court, unlike what Federal Prosecutors have done in the Federal c...

Listed by Forbes as number 559 of the worlds richest people, Raj Rajaratnam was worth $1.3 billion. Sadly, some of those funds may have been ill-begotten. Yesterday the US Attorneys of the Southern District of New York charged Rajaratnam with securities fraud pursuant to the insider trading portions statutes 15 U.S.C. §§ 78j(b), 78ff; 17 C.F.R. §§ 240.10b-5, and 240.10b5-2. AllegedlyRajaratnam obtained inside information from another hedge fund operator, and traded upon it, making several...

Won Sok Lee, 39, an attorney, formerly of Riviera Beach (Singer Island), Florida, and Irvine, California, plead guilty yesterday afternoon to one count of wire fraud in violation of Title 18 U.S.C. §1343 and one count of conspiracy to commit mail and wire fraud in violation of Title 18 U.S.C. §371. Lee is set to be sentenced on December 11, 2009 and faces a statutory maximum of 25 years in prison, a $500,000 fine, and restitution.   According to the FBI, Lee, along with John Kim and Yung ...

  Former Credit Suisse broker Eric Butler was found guilty yesterday of conspiracy and securities fraud. The evidence established that Butler and another broker, Julian Tzolov, defrauded clients to obtain higher sales commissions. Butler and Tzolov sold auction rate securities (ARS) backed by mortgages to clients who had placed orders to buy ARS that were backed by government backed student loans. Butler and Tzolov convinced clients that the student loan backed securities were secure and hig...