Platinum Partners Hedge Fund Founder and 6 Others Charged With Fraud

A founder of the New York hedge fund Platinum Partners and six others were arrested on Monday morning on charges relating to a $1 billion fraud.

The men were charged with securities fraud and investment adviser fraud in a $1 billion scheme in which executives used new investor money to pay older investors, according to an unsealed indictment filed in Federal District Court in Brooklyn.

Mark Nordlicht, a founder and chief investment officer, and David Levy, co-chief investment officer, were among those arrested.

Federal prosecutors in Brooklyn contend that since 2012, executives overvalued the assets that Platinum invested in and misrepresented the performance of certain funds, at times inflating the value significantly. read more »

Goldman Sachs to settle U.S. rate-rigging lawsuit for $56.5 mln

Goldman Sachs Group Inc has agreed to pay $56.5 million to resolve a U.S. class action lawsuit accusing it and other banks of rigging an interest rate benchmark used in the $553 trillion derivatives market.

The proposed settlement was disclosed in papers filed in federal court in Manhattan on Friday. It came after seven other banks agreed in May to pay a combined $324 million to resolve the litigation.

As part of the deal, Goldman has also agreed to provide lawyers for the plaintiffs evidence including transaction data, documents and witness interviews, which could be used in litigations against the remaining banks, the court papers said. read more »

Ireland to fight EU order to collect €13bn in back taxes from Apple

Ireland will appeal the European Union’s order to force it to collect a record €13bn in taxes from Apple, the Irish government has said.

The Irish finance department’s announcement on Monday comes nearly four months after EU competition authorities hit Apple with the back-tax bill based on its longtime reporting of European-wide profits through Ireland. The country charges the American company only for sales on its own territory at Europe-low rates that in turn have been greatly reduced by the controversial use of shell companies at home and abroad. read more »

Israeli tycoon Beny Steinmetz arrested over Guinea bribery claims

Steinmetz alleged to have arranged bribes so his company could secure iron ore rights in poor west African country

One of the world’s wealthiest men has been arrested in Israel over claims that he paid millions of dollars in bribes to secure mineral assets in one of the world’s poorest nations.

Beny Steinmetz is alleged to have arranged for the bribes to be paid so that his company, BSGR, could secure half the rights to a lucrative iron ore deposit in the west African country of Guinea.

He appeared in court in Israel on Monday after police raided his Israeli home and offices. The court later released him for two weeks, under house arrest. read more »

Prudential Whistle-Blower Rocks the Boat on Wells Fargo Scandal

Julie Broderick had 15 years of experience as a securities regulator and a propensity for speaking her mind before joining Prudential Financial Inc. as an investigative supervisor in 2012. When she sought this year to learn more about possible sales abuses by one of the insurer’s business partners, she said, the message from her company was clear: “Don’t rock the boat, don’t speak up, toe the party line and your job will be safe.”

Then she was fired along with two colleagues. They responded with a whistle-blower lawsuit containing allegations that led to state probes about whether Wells Fargo & Co. signed up people for Prudential’s MyTerm insurance without their permission. And even after the insurer halted sales through the bank last week, Broderick is calling out her former employer and saying the company let down customers. read more »

Whistle-Blowers Spur Companies to Change Their Ways

For those who doubt that whistle-blowers are a force for good in corporate America — and yes, such skeptics exist — a new study out of the University of Iowa could not be more important. It demonstrates for the first time that financial shenanigans at companies decrease markedly in the years after truth tellers come forward with information about wrongdoing inside their operations.

Federal and state whistle-blower programs that award bounties to individuals providing tips about corporate fraud have grown in recent years. They are increasingly seen as a way to help understaffed regulators enhance their oversight of sprawling and complex corporations. read more »

U.S. proposed $5-7 bln penalty for Credit Suisse on toxic debt -source

The U.S. Department of Justice has asked Credit Suisse to pay between $5 billion and $7 billion to settle a probe over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis, a source with knowledge of the matter said, but the bank has resisted settling for that amount.

The size of the suggested settlement indicates that the cost to the bank may be higher than analysts had expected and explains why Credit Suisse management has been pushing for a smaller penalty. read more »

SEC Charges Three Individuals and Broker-Dealer With Violating Market Structure Rules

The Securities and Exchange Commission today announced settled cease-and-desist proceedings against the CEO of a Utah-based broker-dealer and two registered persons associated with the firm for causing the firm’s violations of SEC market structure rules, and contested administrative and cease-and-desist proceeding against the firm for the alleged violations. read more »

SEC Charges Gatekeepers in Microcap Frauds

The Securities and Exchange Commission today barred several market participants from the penny stock industry for their roles in various sham initial public offerings (IPOs) of microcap stocks that defrauded investors. read more »