SEC Awards $3.5 Million To Whistleblower

The Securities and Exchange Commission today announced that a whistleblower has been awarded approximately $3.5 million for coming forward with information that led to an SEC enforcement action.

“Whistleblowers do a tremendous service to the investing public and we will continue to reward those who come forward with valuable tips that help us bring successful cases against those who violate the securities laws,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.

The SEC’s whistleblower program has now awarded approximately $135 million to 36 whistleblowers since issuing its first award in 2012. SEC enforcement actions from whistleblower tips have resulted in more than $874 million in financial remedies. read more »

Venezuela's PDVSA seeks compensation in 'staggering' U.S. bribe case

A unit of Venezuela's state-run oil company PDVSA has asked a U.S. court to order two businessmen to compensate it for carrying out a "staggering" bribery scheme that cost the company $600 million in losses.

A motion filed last Wednesday in federal court in Houston marked the first time PDVSA had formally intervened in the case, part of a U.S. Justice Department investigation into bribery of company officials.

PDVSA subsidiary Bariven SA complained in court papers that prosecutors had ignored their statutory obligation to inform Bariven of its rights as a victim of a scheme by Venezuelan businessmen Roberto Rincon and Abraham Shiera.

Bariven sought restitution from Rincon and Shiera, who have pleaded guilty to charges under the Foreign Corrupt Practices Act. read more »

RBS to pay investors $1 billion in bid to avoid fundraising trial

Royal Bank of Scotland has agreed to pay 800 million pounds ($1 billion) in an out-of-court settlement over allegations it misled shareholders during a 12 billion pound fundraising at the height of the financial crisis.

The state-controlled British bank said on Monday it had struck a deal with three parties of institutional investors, who were among five separate claimant groups suing RBS for more than 4 billion pounds for alleged omissions and misstatements.

The bank, which remains more than 70 percent state owned, is now trying to reach an agreement with the two other groups in order to avoid a costly, lengthy and potentially embarrassing trial in a case that is unprecedented in English legal history for its size and complexity.

Investors lost around 80 percent of their money when RBS collapsed just months after the 2008 cash call and was rescued in a more than 45 billion pound government bailout. read more »

South Korean tycoons to take center stage in political scandal

The heads of nine of South Korea's top conglomerates controlling revenue equivalent to half the country's economy face an unprecedented televised grilling by lawmakers on Tuesday, as the glare from a widening political scandal falls on Korea Inc.

A parliamentary panel is investigating whether the so-called chaebol, which include the heavyweight Samsung and Hyundai Motor Groups, were pressured by President Park Geun-hye or her friend and aide to give money to two non-profit foundations backing Park's policy initiatives in exchange for special treatment.

Park faces an impeachment vote on Friday, laying the ground for her to be the first democratically elected leader to leave office early in disgrace.

Samsung heir apparent Jay Y. Lee is expected to take center stage at the hearing, after prosecutors raided the group's offices last month. Samsung donated 20.4 billion won ($17.42 million) to the two foundations, the most of any group.

None of the chaebol, which are among 53 corporate groups that gave money to the foundations, has been accused of wrongdoing in the case, and Samsung has said it will cooperate with prosecutors. read more »

'Big Short' adviser loses appeal in SEC case

An investment adviser featured in best-seller "The Big Short" failed to persuade a federal appeals court to shut down a U.S. Securities and Exchange Commission fraud case on the ground that the agency sued him in the wrong forum.

The 2nd U.S. Circuit Court of Appeals in Manhattan on Friday said federal judges lacked jurisdiction to decide whether the SEC deprived Wing Chau and his firm Harding Advisory LLC of equal protection by pursuing an in-house administrative proceeding instead of suing in federal court.

Chau was accused of concealing how he had let a hedge fund choose assets to back Octans I CDO Ltd, a collateralized debt obligation it eventually shorted, and whose April 2008 failure stuck investors with roughly $1.1 billion of losses.

In January 2015, an SEC administrative law judge ordered Chau and Harding to pay more than $3 million comprising fines, improper profit and interest. read more »

Former Property Management Company Agrees to Pay More Than $1.6 Million for Defrauding Military Housing Projects

American Management Services LLC, based in Seattle, agreed to pay more than $1.6 million pursuant to a deferred prosecution agreement to resolve criminal charges that the company defrauded the U.S. Army and Virginia-based Clark Realty Capital LLC (Clark) while performing property management services for military housing at Fort Belvoir, Virginia; Fort Benning, Georgia; Fort Irwin, California; and the Presidio at Monterey, California.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Dana J. Boente of the Eastern District of Virginia; Director Frank Robey of U.S. Army Criminal Investigation Command (CID) Major Procurement Fraud Unit; Special Agent in Charge Robert E. Craig of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office; and Director Anita Bales of the Defense Contract Audit Agency (DCAA) made the announcement after U.S. District Judge Claude M. Hilton of the Eastern District of Virginia entered an order approving the agreement.

In connection with today’s resolution, American Management Services (also known as AMS or Pinnacle) admitted that from 2004 to 2011, it fraudulently obtained approximately $1 million by skimming and concealing undisclosed fees from insurance premiums paid by entities that oversaw privatized housing at the four bases. read more »

Keeping the Guptas banked was too 'risky' for FirstRand

FirrstRand has revealed for the first time that the Guptas' bank accounts were closed over suspicions that they were used to launder money.

FirstRand CEO Johan Burger made the revelation in an affidavit filed to the High Court in Pretoria. It was filed in response to Finance Minister Pravin Gordhan's application for the court to declare that the government had no authority to intervene in the decision by four major banks - Standard Bank, FNB, Absa and Nedbank - to terminate their business relationships with the Guptas.

FirstRand is the first bank to file a supplementary affadavit, with the rest considering whether to follow suit.

Gordhan filed his application in October, in which he said 72 dubious transactions totalling R6.8-billion made by the Gupta family and their companies had been uncovered. The banks had alerted the Financial Intelligence Centre to the transactions.

FirstRand also has to bear in mind international legislation such as the UK's Bribery Act and the US's Foreign Corrupt Practices Act, by virtue of FirstRand's transactions and counterparty relationship not being limited to South Africa read more »