Exchanges Supercharge Rules to Fight Cheaters Based Outside U.S.

Foreign day traders were breaking rules and dodging regulators when Chris Concannon left Nasdaq Inc. in 2009. When he returned to the exchange industry five years later, he was dismayed to find it was still happening.

Now Concannon, the chief executive officer of Bats Global Markets Inc., is leading the charge against brokers that enable manipulators. Bats got regulators’ approval to move quickly against market participants whose clients engage in illegal practices like spoofing, barring them from trading in weeks rather than the months or years it used to take. The company also introduced a neighborhood-watch style program to encourage more brokers to speak up when their peers abet manipulation. read more »

IBM Loan Unit Bilked Fannie Out Of $13M, FCA Suit Says

IBM Corp. and loan servicing subsidiary Seterus Inc. defrauded the government out of nearly $13 million by collecting bonuses for incomplete work helping defaulting home mortgage holders complete pre-foreclosure documents, according to a whistleblower's 2012 False Claims Act suit unsealed Thursday.

The suit was under seal until Thursday when U.S. District Judge Denise Cote of New York's Southern District issued an order unsealing the 2012 complaint, saying the government had declined to intervene in the case. The complaint accuses IBM and its subsidiary Seterus of violating the federal False Claims Act when employees committed a litany of fraudulent business practices that ripped off government-sponsored enterprise Fannie Mae between 2011 and 2012.

“Defendants have used their position as loan servicing companies to defraud the United States through a systemic pattern and practice of reporting inappropriate expenses for reimbursement and through overstating their performance … in order to obtain unearned performance bonuses and to avoid compensatory fees,” the 2012 complaint says. read more »

Shire, DOJ Reach $350M Deal In Dermagraft FCA Investigation

Biotech company Shire on Tuesday told investors that it reached a tentative $350 million settlement with the U.S. Department of Justice to settle False Claims Act violations and Medicaid-related claims over the sales and marketing practices relating to Dermagraft.

Massachusetts-based Shire Pharmaceuticals PLC said in its 8-K filing that it had reached a tentative agreement with the DOJ in an ongoing investigation into the sales and marketing practices of the skin substitute product Dermagraft. Shire picked up the product when it acquired Advanced Biohealing Inc., now known as Shire Regenerative Medicine Inc., as part of a $750 million deal in 2011. read more »

The operator of a Clifton ambulance company was found guilty Tuesday of receiving more than $10 million for services provided to Medicare and Medicaid patients while he was barred from participating in federal health-care programs because of a prior fraud conviction.

Following a six-day trial in Newark, U.S. District Judge Susan D. Wigenton found Imadeldin Awad Khair guilty of health-care fraud and 16 other counts, including evading federal payroll taxes, money laundering, and obstruction of a federal audit.

Agreeing with prosecutors that Khair, 57, of Clifton, poses a significant risk of flight as a result of his conviction, the judge revoked bail and ordered him detained pending sentencing, which was set for Nov. 9.

Khair, a U.S. citizen with “strong ties” to his native Sudan, is facing more than 15 years in prison under federal sentencing guidelines – an “extremely powerful motive to flee,” Assistant U.S. Attorney Osmar J. Benvenuto told the judge.