January 2006
57 posts
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Commodity Futures Trading Commission Files...
Two New York-based hedge funds have been ensnared by a U.S. Commodity Futures Trading Commission investigation into their sale of illegal foreign currency futures contracts. Also in the crosshairs is the man behind both Century Maxim Fund Inc. and AJR Capital Inc., one Alexsander Efrosman, AKA Alex Besser (always got to wonder about those AKAs). Given this guy’s past history I can’t...
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Just the Beginning? SEC, FSA Sniffing About...
Via BusinessWeek: More Heat On Hedge Funds - Regulators are probing trades by managers with inside access BusinessWeek February 6, 2006 By Emily Thornton with Amy Borrus in Washington and Stanley Reed in London As if there weren’t enough controversy surrounding hedge funds, now the Securities & Exchange Commission is investigating suspicions that fund employees are engaging in insider...
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Bermuda Oil Flap Begets Inquiry, Questions About...
What happens when your due diligence checklist isn’t long enough? You end up (potentially) having to explain away hundreds of millions in bogus oil trades you claim to know nothing about… Probe under way into oil scandal company January 27, 2006 The Royal Gazette (Bermuda) Finance Minister Paula Cox said yesterday that an inquiry was under way into the Bermuda company highlighted by...
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Financial Times Takes a Look at Looming SEC...
51 SEC investigations between 1999 and 2004 and 30 some odd cases brought mean one thing for the hedge fund industry industry….increased regulation. But already many have come forward saying the soon-to-take-effect SEC regs of hedge funds are a joke, with enforcement and oversight capacities sadly lacking…206 will tell the tale. Via the FT.com: Deadline looms as SEC turns screw on...
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The SEC Works to Punish Corporate Criminals, While...
Exactly how they plan to do accomplish this is not exactly clear at this point…but no doubt we’ll here more in the near future about the SEC’s plans: Via The Ely Times: New SEC Guidelines Shield Shareholders By ELLEN SIMON AP Business Writer 28 January, 2006 NEW YORK - How can the Securities and Exchange Commission punish corporate crime without punishing shareholders? But even...
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SEC Takes Steps to Increase Transparency of...
Via the WSJ: Wait, Let Me Call My ChFC’ - Your Stockbroker or Adviser Can Have Many Baffling Names; A New SEC Rule Might Help By JEFF D. OPDYKE Staff Reporter THE WALL STREET JOURNAL January 28, 2006 The only thing tougher than coming up with a financial plan is finding someone to do it for you. Investment advisers have developed a baffling array of titles and certifications to make...
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XPress Pharmacy Direct In-House Lawyer Indicted
Via the WSJ Law Blog… Another Lawyer Indicted January 26, 2006 Posted by Peter Lattman Daniel Adkins, an in-house lawyer at Internet pharmacy outfit Xpress Pharmacy Direct, was indicted this week in Minnesota on federal charges that he helped the company obtain narcotics and hid assets for its founder. Federal authorities shut down Xpress in May. The company’s founder, Christopher Smith, was...
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FBI Director Calls for Greater Cooperation on...
Direct from Davos and the ongoing World Economic Forum comes new rcommedations on how best to deal with the growing international dilemma of computer fraud. On the scene was FBI director Robert Muller who spoke up for greater information sharing and standardization of regulations to help law enforcement track, combat and prosecute fraud across national boundaries. Via the ever venerable Financial...
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Potential for Corp. Fraud Reduced, But Still With...
So says the Washington Post, in part of their on-going (and going… and going…) coverage of the Enron case: Opportunity for Corporate Fraud Has Shrunk — but It’s Still There By Carrie Johnson and Ben White Washington Post Staff Writers Thursday, January 26, 2006; D01 Four years after the collapse of Enron Corp. spurred the most sweeping revisions in business regulation since...
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Coca-Cola Implicated in Violent Union-Busting...
It’s not quite “Have a Coke and a Smile”…the details, via BusinessWeek: “Killer Coke” Or Innocent Abroad? Controversy over anti-union violence in Colombia has colleges banning Coca-Cola January 23, 2006 By Dean Foust and Geri Smith, with Elizabeth Woyke The Corporation It’s early monday morning, but Ray Rogers has the full attention of some 70 students...
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FTC Fines Choicepoint $15 Million in Data Breach
But don’t week for the fine folks at Choicepoint. According to this recent article from MSN Money, their revenue in 2005 exceeded $1 billion., with projections for 2006 looking to be up 7 to 9%. More on the FTC fine, via Business Week: FTC Fines ChoicePoint Over Data Breach January 26, 2006 BusinessWeek By Harry R. Weber AP Business Writer The Federal Trade Commission said Thursday...
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Securities Suits Down But Flurry of '05...
Securities fraud litigation seems unlikely to reach the volume of it’s late 1990s boom period, but as long as companies have bad quarters and execs keep covering it up (or just appear to do so), no doubt, the cases will continue. This Boston Business Journal article offers reflection and speculation from several industry heavy hitters, all of whom seem to be of the opinion that...
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Brokerages Top SEC Complaint List for '05
Biggest cause of consumer complaint…problems moving an account from broker to broker: US SEC’s Glassman says brokers top ‘05 complaints January 25, 2006 Reuters.com Brokerages were the focus of more investor complaints to the U.S. Securities and Exchange Commission in fiscal 2005 than any other type of business, said SEC Commissioner Cynthia Glassman on Wednesday. For the year...
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NYSE and NASD Team Up to Clean Up Wall Street...
Which means? No more strippers. Via UndertheCounter.net. — MDT
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Verizon Seeks Injunctions on Stolen Customer Data...
The latest word in this still-volatile story… Verizon has been charging hard against online vendors who have obtained Verizon customer records either through bribes or through fraudulent pretexts meant to dupe low-level Verizon employees into giving up the goods. Is this technically illegal at the present time? Well, not exactly… Given all the publicity, state and/or federal action on...
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Grocery Chain Ingles Market Receives Wells Notice...
Note the quote-love for friend of The Daily Caveat, Peter Henning of Wayne State University: Via the Ashville Citizen Times: …Ingles announced in December 2004 that the SEC was investigating it, and last year the company restated results for its 2002 and 2003 fiscal years and part of FY 2004. The problems, the company said last year, involved the timing of reporting of certain payments from...
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Settlement of Vanlev Securities Suit Brings...
The Daily Caveat has posted previously about Bristol-Myers Squibb’s continuing legal issues. This week saw a notable settlement in securities class action case brought against the pharmaceutical giant in relation to the never marketed hypertension drug Vanlev. Word of the settlement first appeared months ago but only recently have the exceedingly interesting details been made public. The...
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I don’t know about anyone else, but watching the...
I don’t know about anyone else, but watching the film Enron: The Smartest Guys in the Room has made me really distrust Corporate America.
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Numbers of Investor Suits Down, But Attorneys Fees...
Interesting article that offers some balanced, ground-level thoughts on both the excesses and necessities of the secutities litigation industry. Keep reading for some interesting stats on recent trends and how attorneys, shareholders and targeted companies fared over the last year. Via The Denver Post: Investor suits down, yet lawyers reap By Al Lewis Denver Post Staff Columnist January 22, 3006...
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White Collar Crime Trial, China Style
Tang Wanxin, founder of China’s D’long conglomerate, which was once China’s largest stockholder is going on trial for various alledged illegalities. Wanxin first fell into trouble in 2004 when creditors began demanding repayment of laons for which Wanxin had pledged equity in various companies in collateral. Up to ten others, including Wanxin’s brother Tang Wanli, may...
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Pilfered Cell Phone Records Also Reveal Caller...
In a new wrinkle of a story whose momentum will, I think, continue to grow, online brokers dealing in fraudulently obtained cell phone records, the Chicago Sun Times points out that said data not only reveals who customers are calling but also where the are calling from. Check out the brief article here. — MDT
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SEC 'Splains Need for New Exec Pay Disclosures
Via Forbes: The SEC: Beyond Disclosure Forbes.com By Luician Bebchuk January 19, 2006 Tuesday’s Securities and Exchange Commission vote in favor of expanded disclosure of executive pay arrangements is a necessary and very useful step. But we should harbor no illusion that it would be sufficient by itself to fix the problems of U.S. executive compensation. Reforming the disclosure of executive...
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Quest Settlement Dunzo...Executives Fate Uncertain
Via BusinessWeek.com: Ex-Qwest exec settlement said collapsed THE ASSOCIATED PRESS/DENVER By SANDY SHORE AP Business Writer January 19, 2006 A tentative settlement has collapsed for a former Qwest chief financial officer in a civil case arising from the telecommunications company’s multibillion dollar accounting scandal, her attorney said Thursday. Robin Szeliga’s attorney provided no...
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Record Number of Hedge Funds Went Bust Last Year
Signs of a healthy market? Tell it to the investors… Hedge fund failures on the rise as market grows By Pratima Desai Reuters January 17, 2006 A record number of hedge funds went bust last year, and the failure rate is likely to keep accelerating, but unfazed investors see this as a sign of health in a growing market. Chicago-based data provider Hedge Fund Research estimates that around...
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Security Firm, Vance International Sold to Garda...
The Press Release: SPX Completes Sale of Vance International, Inc. January 18, 2005 CHARLOTTE, N.C. — SPX Corporation (NYSE: SPW) today announced that it has completed the sale of Vance International, Inc., its global investigation and security firm, to Garda World Security Corporation (TSX: GW) for $67.25 million in cash. On November 28, 2005, SPX announced it had signed a definitive...
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Vegas Securities Proker Agrees to $153 Million...
Via the Pahrump Valley Times: For $153 million payment, securities fraud case settled By PVT and THE ASSOCIATED PRESS January 18, 2006 A former Las Vegas securities broker has agreed to pay $153 million to settle charges alleging he defrauded mutual fund investors through improper late trading and market timing, the Securities and Exchange Commission said Tuesday. Under terms of the settlement,...
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Hedge Fund Canary Captial Partners Reaches $10...
Via NorthJersey.com: Hedge fund to settle case with N.J. for $10M Wednesday, January 18, 2006 Associated Press Defunct hedge fund Canary Capital Partners LLC has agreed to pay the state $10 million to settle allegations it stacked the deck against ordinary investors, the New Jersey Attorney General’s office said Tuesday. Secaucus-based Canary, two of its units and managing...
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Prophecy Training a Scam? You Don't Say...
Religion and investing, I wouldn’t be the first to point out, seldom mix. So when a local church founder and self-professed “apostle” named Neulan Midkiff offers to sell you interest in foreign bank deposit programs and promises no risk and high yield, I would say, take a pass. Sadly more than a thousand well-meaning investors didn’t. But the good news is that Midkiff, who...
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Sketchy Data Brokers Masquerade as Speech Impaired...
Seriously…a black eye for the industry, no doubt. This legislation will continue to be embarassing to the investigative community. There are legal ways to obtain cell phone records that don’t involve funny voices or bribes of company employees. There are also less invasive ways to get at the same information through public records, interviews and plain old hard work. In the end...
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Whew...
Smoke is coming off of The Daily Caveat’s keyboard and a busy work week is keeping me from this bully pulpit. Hopefully we’ll be back in action later today. Stay tuned. — MDT
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Armenians Seeking Reparations File Class-Action...
Some of the most satisfying investigative work I’ve done in my career concerned reparations issues and accusations. Whether the issue was art theft, stolen assets or war crimes exposure there is something uniquely fascinating about reaching back over the decades and utilizing a different set of investigative tools and methods to reveal as much as possible about the truth of what went on. ...
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NJ Exec Busted on Million Dollar Embezzelment
Via NJ.com: Exec charged in $1M fraud - Over nine years, $982,686 allegedly taken. Ex-president reportedly gave company cash to paramour. January 13, 2006 By MEGHAN SMITH The Express-Times The former president of a Lower Saucon Township mineral wool manufacturer was arraigned Thursday on charges he embezzled nearly $1 million from the company between 1993 and 2002. Court documents say 57-year-old...
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Seymour Lazar Release from House Arrest, Still to...
Lazar, the named plaintiff in many of the securities class action cases brought by prominent plaintiff firm Milber Weiss has been under investigation for some time for alledgedly taking kickbacks from the law firm in exchange for his role in their cases. Lazar, 78, is still awaiting trial, but has won his freedom from the house arrest to which he had been confined for months. Check out this New...
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AIG Nearing Settlement with Regulators?
$1.5 billion? That’s the word on the street - Wall Street, that is. But the tab doesn’t appear to come with a free pass for Greenberg: AIG may pay up to $1.5 bln in settlement: report Herald News Daily January 13, 2005 American International Group Inc. may pay as much as $1.5 billion to settle civil investigations by state and federal authorities into an accounting scandal, The Wall...
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Lay and Skilling Asleep at the Wheel Defense May...
No really? Seriously…? Well…decide for yourself: Enron trial no Lay-up - With all we know about Enron, convicting Lay and Skilling may seem like a sure win. It’s not. By Roger Parloff, FORTUNE senior writer January 11, 2006: 12:35 PM EST FORTUNE Suppose as an epilogue to “The Emperor’s New Clothes,” the humiliated potentate had been brought up on charges of...
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SEC Wary of Hedge Funds Influence on Mergers
Details via The Motley Fool: Will the SEC Trim the Hedges? By Rich Duprey (TMF Cop) January 12, 2006 News that the Securities and Exchange Commission gave a Wells notice to a hedge fund because of its actions in the failed merger of generic drug manufacturers Mylan Laboratories and King Pharmaceuticals is sending out tiny ripples in the hedge fund community. The regulators have sent notice that...
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NY Albanian Mob Trial Ends in Convictions
Closing arguments were heard at the tale end of December in this case involving reputed members of the Rudaj Organized crime outfit, a group of Albanian mobsters who had consolidated their power in New York, shoving to the side such noted underworld luminaries as the Gambino crime family. Convictions were just handed down in the trial, which began in September 2005. Sentencing for all the...
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Do it Yourself Due Diligence
Business Week is featuring a brief article suggesting that investors would be well served by doing their own due diligence before trusting their finances to an investment advisor. This uncontroversal advice goes without saying, I think - that one should seek both anecdotal opinions and conduct a personal review of potential regulatory and legal issues that might be an early warning sign of...
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Aesbestos Clients Sue Florida Bar Over Conduct of...
Via the MiamiHerald.com: Asbestos clients sue Florida Bar for millions - Thousands of former asbestos clients who claim their disbarred Miami lawyer stole millions of dollars from them have sued the Florida Bar. Miami Herald By Jay Weaver January 11, 2006 More than 4,000 people ailing from asbestos exposure sued the Florida Bar on Tuesday to recover $13.5 million in damage settlements...
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Former Mutual Fund Broker Agrees to $153
Via FortWayne.com: Ex-broker agrees to pay $153M settlement Jan. 10, 2006 Associated Press A former Las Vegas securities broker has agreed to pay $153 million to settle charges alleging he defrauded mutual fund investors through improper late trading and market timing, the Securities and Exchange Commission said Tuesday. Under terms of the settlement, Daniel G. Calugar will relinquish $103 million...
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SEC Taking Enforcement Action Against Perry...
Can I realistically link just one more time to the IHT without making The Daily Caveat their front page? I guess so. Make it worth my while and click through to read about the SEC’s issues with Perry Capital’s alledged disclosure violations. Perry, which has a solid pedigree having been founded by former Goldman Sachs parter Richard Perry, had recieved a wells notice from the SEC...
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And one more from the IHT…how the market for hedge funds continues to change. Both in the U.S., and in Europe as this article illustrates, hedge funds are opening their doors to the average investor. The question is, do these folks know what they’re getting into: Funds: This club is no longer exclusive By David Clarke Bloomberg News TUESDAY, JANUARY 10, 2006 Hedge funds, loosely...
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Soros Calling Recession in U.S. in '07
Via the International Herlad Tribune: Shakers: Soros sees U.S. at risk of recession in ‘07 Bloomberg News JANUARY 10, 2006 The billionaire investor George Soros said Monday that the U.S. economy might fall into recession next year because of a cooling housing market. There is also a “reasonably significant chance of a global slowdown in 2007,” he said. “Right now, the...
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Quest's Nacchio to Point Finger at Board in...
Via TMCnet.com: Nacchio could point to board’s actions The Denver Post, The (KRT) Via Thomson Dialog NewsEdge January 8, 2006 Former Qwest chief executive Joe Nacchio — accused of criminal insider trading for selling $100.8 million worth of Qwest stock in 2001 — may have a simple yet powerful defense for the sales: The board made him do it. Qwest publicly stated on several...
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NASD Sues Oppenheimer (And Sounds REALLY...
Via the Miami Herald: NASD sues Oppenheimer - Regulator claims the brokerage supplied it with inaccurate data OTIS BILODEAU AND ERIK SCHATZKER Bloomberg News January 10, 2006 Oppenheimer Holdings Inc. and Albert Lowenthal, chief executive officer of the Toronto-based brokerage, were sued by NASD for allegedly giving the regulator inaccurate data during a review of mutual fund sales practices....
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TPLJ Goes After Proposed Netflix Class Settlement...
Netflix is the greatest thing since sliced bread if you’re a movie watcher, but that didn’t stop the online rent’ailer from getting sued by customers over whether or not their monthly DVD rentals were truly infinite and would arrive in a single day. In any case, now that a proposed settlement is on the table the Trial Lawyer for Public Justice have cried foul. They argue that...
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NSA Brings Back Snooping Cookies
Cookies, web-bugs and banner ads - OH MY! Haven’t we been down this road before, litigation and tears the only result. Oh well, the NSA seems to think that this subtle snooping of peoples’ web habits is essential to the war on terror. Via Wired: NSA’s Lamest Spy Tool: Cookies January 9, 2005 Associated Press NEW YORK — The National Security Agency’s internet site...
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SEC Polishing Up the Mallet for Use on Quovadx
Via RockyMountainNews.com: SEC weighing Quovadx charges By Roger Fillion Rocky Mountain News January 7, 2006 U.S. securities regulators appear to be weighing civil charges against former senior officials of Quovadx Inc. based on the Greenwood Village software firm’s accounting methods. Sources familiar with the Securities and Exchange Commission investigation said the agency signaled last...
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Dupont's Teflon Scandal Gaining Traction?
Story via ChiefEngineer.com. Bad pun via yours truly: Hidden Risks Of Teflon-Like Chemical Raised January 9, 2006 AP newswire WASHINGTON (AP) - DuPont Co. hid studies showing the risks of a Teflon-related chemical used to line candy wrappers, pizza boxes, microwave popcorn bags and hundreds of other food containers, according to internal company documents and a former employee. The chemical...
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Cell Phone Records For Sale...Legality Optional
The Washington Post ran a story a few months back with a similar theme - that black market vendors of questionable legality are making available cell phone records to anyone with a credit card. A new Chicago Sun-Times article discusses the issue in more depth, describing how internet based vendors use inside sources, either conned or bribed, to surreptitiously snag telephone records. A private...