Sarao Flash Crash Manipulation Case Benchmarks Point In History as Coscia Appeals Decision

As Navinder Sing Sarao, the 37-year old UK resident accused of helping accelerate the 2010 flash crash, arrived in Chicago to face market manipulation charges, the man who told regulators to “kiss my ass” after the event that briefly wiped out nearly $1 trillion in market value stands as a benchmark in financial history. Sarao was warned by regulators his behavior could be illegal and continued nonetheless. Not only does the case mark a point where deterrence was acknowledged as weak if non-existent, legal analysts point out, but it also highlights the rise of the whistleblower program as a new and cost-effective regulatory enforcement tool.

IN AN UNPRECEDENTED EFFORT, OUR FIRM'S CLIENT DISCOVERED THE MANIPULATIVE ACTIVITY THAT WAS BROUGHT TO THE ATTENTION OF THE CFTC AND DOJ WHO SUBSEQUENTLY CHARGED MR. SARAO AND NOW HAVE SUCCESFULLY WON THIS EXTRADITION FIGHT AND SECURED HIS GUILTY PLEA

SEC weighs cyber risks to proposed 'flash crash' database

The SEC is weighing cybersecurity concerns as it decides whether to approve plans for a new program intended to address flash crashes in the market.

Regulators will meet on Tuesday to decide on the program, known as the consolidated audit trail (CAT). The program would create the largest database of securities transaction information in the world when completed. The Securities and Exchange Commission data system is being built to help regulators understand market actions following the 2010 flash crash, an incident in which stock markets plummeted and rebounded in the span of roughly 30 minutes. read more »

Top Putin aide caught with $2 million in Russian bribery sting

A high-profile corruption case shook Russia’s establishment and appeared to shed light on a power struggle within President Vladi­mir Putin’s inner circle on Tuesday, after authorities detained the country’s economic development minister on suspicion he demanded and accepted a $2 million bribe over a controversial privatization deal. read more »

SEC Chair Mary Jo White Announces Departure Plans

Strengthened Protections for Investors and Our Markets Through Transformative Rulemaking and Vigorous Enforcement

SEC Chair Mary Jo White, after nearly four years as the agency’s head, today announced that she intends to leave at the end of the Obama Administration.  Under Chair White’s leadership, the Commission strengthened protections for investors and the markets through transformative rulemakings that addressed major issues highlighted by the financial crisis.  The Commission also instituted a new approach to enforcement that has resulted in greater accountability and record actions through, among other things, the use of admissions of wrongdoing and enhanced data analytics and technology.

Chair White, who became the 31st Chair of the SEC in April 2013, will be one of the SEC’s longest serving Chairs. read more »

Firm Charged With Misleading Investors About Binary Options Profitability

The Securities and Exchange Commission today announced that an Israeli-based firm must pay more than $1.7 million for misleading investors into trading binary options over the internet, and the agency warned that other firms may be out there actively trying to do the same thing.

Binary options generally have an all-or-nothing payout structure in which investors bet on the increase or decrease in value of a company stock or other securities serving as the underlying asset.  The options contract expires after a fixed time period, and if an investor’s prediction was wrong then all of the investment can be lost.

According to the SEC’s order issued today against EZTD Inc., not only did the firm fail to register the binary options or register as a broker-dealer to legally sell the investment to U.S. investors in the first place, but it failed to disclose on its trading platforms that there was significantly greater potential for investors to lose rather than earn money.  EZTD instead made statements that extolled the profitability of trading binary options, calling it a “highly profitable trading platform” and “an extremely lucrative avenue for individuals who are looking to see an increase in income.” read more »

Insurers sue pharmaceutical giant over defective drugs

A Pennsylvania federal judge has ruled that major pharmaceutical company GlaxoSmithKline (GSK) cannot escape a suit brought by 41 insurers over purportedly defective drugs produced by a now-defunct Puerto Rican manufacturer.

The insurers invoked a recent decision by the Third Circuit Court of Appeals that allowed union health funds to bring a claim against GSK under the Racketeer Influenced and Corrupt Organizations (RICO) Act.

US District Judge Juan Sanchez found that the insurer plaintiffs were economically injured by purchasing the adulterated drugs. The judge recalled the Third Circuit’s ruling in a case over GSK’s Avandia diabetes drug.

“Under In re: Avandia, an insurer’s overpayment for a drug due to the manufacturer’s deceptive market practices is a concrete economic injury,” Judge Sanchez said. “Plaintiffs have sufficiently pleaded an analogous injury here.” read more »

Ex-Forest Sales Rep Defends Counsel In Namenda FCA Suit

A former sales representative blasted Forest Laboratories Inc.’s efforts to shake a False Claims Act suit alleging it illegally marketed Namenda for patients with mild Alzheimer’s by accusing the relator's counsel Milberg LLP of ethical violations, saying Monday that the allegations are baseless and intended to distract from the company’s own discovery violations.

Timothy Leysock stood behind his second amended complaint accusing Forest Laboratories and Forest Pharmaceuticals Inc. of off-label marketing dementia drug Namenda, resulting in the submission of false claims to the government, contending that his counsel didn’t do anything unethical in the process of gathering information for the suit. read more »