Algorithms 'could wipe out the global economy', experts fear

Used in almost every industry, algorithms have transformed the way we work - but they have the capacity to do immense damage.

Experts have called on the Government to audit the algorithms used by technology and financial companies to avoid chaos.

Professor Edward Tsang, director of the Centre for Computational Finance and Economic Agents at the University of Essex, said that algorithms should at least be "test-driven" by regulators to prevent "trillions" of pounds being lost and the global economy being wiped out.

At their most basic, algorithms are a set of rules that computers follow to make decisions. But they can be extremely complex and opaque, even to their creators.

Automated financial trading algorithms have led to rapid falls in stock markets - most notably in 2010 when a trillion dollars was wiped off indexes - and in the value of sterling following the EU referendum when the pound fell by 6% in a matter of minutes. read more »

The Fallout From Madoff's Fraud Includes an Ironic Twist for Investors

The legal fallout from Bernard Madoff’s epic fraud includes an ironic twist: a road map for investors wanting to hold on to profits that seem too good to be true.

In the eight years since Madoff’s arrest, a series of court decisions have favored investors who profited from the scam, damping the hopes of trustee Irving Picard to return more to Madoff’s victims who lost $17.5 billion in principal, legal experts say. At the core of the disputes is how far Picard can go to make the Ponzi scheme’s investors whole.

“The rulings all lower the risk associated with investing in something that might be a Ponzi scheme,” said Anthony Casey, a University of Chicago law school professor. “Some of these were inevitable conclusions of law. The courts weren’t necessarily being lenient to the big institutions. It just happens to help the wealthier investors.” read more »

Jesse Litvak, A Symbol of the Government Crackdown on Wall Street, Goes on Trial Again

The bond trader was found guilty of fraud, but a federal appeals court threw out parts of the case

A securities-fraud case that triggered widespread changes to sales tactics on Wall Street is once again in the spotlight as a former Jefferies Group LLC bond trader goes back on trial Wednesday in New Haven, Conn.

A jury in 2014 found the former trader, Jesse Litvak, guilty of fraud for misleading customers about the price he paid for residential mortgage-backed bonds. A federal appellate court cast doubt on the conviction a year ago, throwing out parts of the case and ordering the securities-fraud charges to go before a new jury. read more »

Doctors, pharmacists indicted in $100M fraud case

A dozen doctors, pharmacy owners and marketing pros have been accused of a kickback scheme that prosecutors allege involved a sham medical study used to bilk up to $102 million from the publicly funded federal health program for military family members. read more »

Israeli Police Question Netanyahu Over Graft Suspicions

Israeli police questioned Prime Minister Benjamin Netanyahu at his official residence in Jerusalem over graft allegations that are casting a pall over his leadership.

The Justice Ministry said the team of investigators questioned the 67-year-old Israeli premier for about three hours Monday night “under caution” -- meaning anything he said could be used in court if he’s prosecuted -- on suspicion he illicitly received perks from businesspeople. read more »

Milwaukee mental clinic scammed Medicaid, feds say

A Milwaukee clinic turned urine samples into liquid gold, cheating Medicaid out of millions of dollars by billing for duplicative and unnecessary drug screening tests, federal prosecutors say.

In fact, from 2011 to 2015,  Acacia Mental Health Clinic LLC, 5228 W. Fond du Lac Ave., captured 99% of all Medicaid payments to mental health and substance abuse counseling providers in Wisconsin, according to a new government lawsuit that aims to claw back some of the money. read more »