Whistleblower News: $414 Million to Settle Probe, $1.3 Million for Extensive OATS Reporting Violations, Suit Claiming Brokers Deceived Investors, $350M Gov't Construction Fraud Scheme, $1 Million for F Ex Fraud, $2.5M to settle medical fraud

 

 

Och-Ziff Doubles Reserve to $414 Million to Settle Probe

Och-Ziff Capital Management Group LLC, the hedge fund firm run by Daniel Och, more than doubled the money it’s setting aside for a settlement with U.S. authorities and is in talks to raise capital from partners to help cover the cost. Shares rallied.

The firm reserved $214.3 million for the probe in the second quarter, bringing the total for the anticipated settlement to $414.3 million, the company said Tuesday in a statement. Chief Financial Officer Joel Frank said on a conference call today that settlement talks with the government are in advanced stages. read more »

FINRA Fines Barclays Capital Inc. $1.3 Million for Extensive OATS Reporting Violations and Related Supervisory Failures

The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Barclays Capital Inc. $1.3 million for systemic Order Audit Trail System (OATS) reporting violations and related supervisory failures.

FINRA rules require firms to transmit to OATS complete and accurate data relating to events in the lifecycle of an order, called Reportable Order Events (ROEs). FINRA found 15 system issues at Barclays Capital that gave rise to OATS reporting violations. Barclays Capital transmitted more than 3 billion inaccurate or incomplete ROEs to OATS, including omitted special handling codes; inaccurate timestamps, execution quantities and member type codes; and duplicate or erroneous reports. In addition, Barclays Capital failed to transmit millions of ROEs to OATS. FINRA also found that Barclays Capital’s supervisory system was not reasonably designed to achieve compliance with its OATS reporting obligations. read more »

UBS Beats Suit Claiming Brokers Deceived Enron Investors

UBS AG and affiliates shed a 13-year-old proposed class action claiming UBS brokers hid Enron's fraud from retail investors when a Texas federal judge ruled on Tuesday that the investors did not show that the brokers had a duty to disclose signs of trouble.

U.S. District Judge Melinda Harmon dismissed the suit, saying PaineWebber, which merged with UBS in 2000, did not have a duty to warn retail investors who bought stock in Enron around the time Enron collapsed. The investors claimed PaineWebber had agreed not to discourage Enron investments in exchange for having the brokerage run Enron's lucrative employee stock option programread more »

7 Charged In $350M Gov’t Construction Fraud Scheme

Federal prosecutors said Tuesday that seven people have been indicted for defrauding the federal government in connection with the unlawful award of nearly $350 million in federal government construction contracts earmarked for minorities, women, veterans and the disabled.

Thomas Brock, Jerry Eddins, Harry Michael White, Cory J. Adams, Tory Brock, Alfonza McCutchen Jr., and Allison Amanda Sauls were hit with an 18-count indictment bringing various charges of fraud. Eddins is a Texas resident, Sauls is a New York resident while the rest of the defendants are from South Carolina, according to the U.S. attorney’s office in Columbia, South Carolina. read more »

CFTC Orders QuantX Capital, LLC to Pay a Civil Monetary Penalty and Restitution Totaling More than $1 Million for Engaging in Foreign Exchange Commodity Pool Fraud

The U.S. Commodity Futures Trading Commission (CFTC) today entered an Order requiring Jonathan A. Parker and QuantX Capital, LLC (QuantX), both of Marietta, Georgia, jointly and severally to pay a $680,000 civil monetary penalty and restitution totaling $341,500 and imposing permanent trading and registration bans on them for committing fraud and misappropriation in connection with operating a commodity pool that offered leveraged or margined off-exchange foreign currency (forex) transactions. Parker, a former CFTC registrant, is the CEO, President, and sole owner of QuantX and is responsible for all the company’s activities. read more »

UPMC paying $2.5 M to Settle Whistlebolwer suit

One of Pennsylvania’s largest health care providers has come under scrutiny for the alleged billing practices of some in its neurosurgery department.

UPMC, along with University of Pittsburgh Physicians Inc., UPMC Community Medicine Inc. and Tri-State Neurosurgical Associates-UPMC, have agreed to pay $2.5 million as a result of a whistleblower lawsuit filed in U.S. District Court in 2012 claiming that neurosurgeons completed overly complex surgeries in order to increase insurance billings. read more »