SEC Awards $5.5 Million to Whistleblower

The Securities and Exchange Commission today announced an award of more than $5.5 million to a whistleblower who provided critical information that helped the SEC uncover an ongoing scheme.

According to the SEC’s order, the whistleblower was employed at the company involved in the wrongdoing and reported the information directly to the SEC, which brought a successful enforcement action to end the scheme.

“Whistleblowers play a key role in bringing wrongdoing to the SEC’s attention, and this whistleblower helped prevent further harm to a vulnerable investor community by boldly stepping forward while still employed at the company,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. read more »

The Accidental Whistle-Blower: How a Retired London Journalist Uncovered Massive Corruption Half a World Away

Clare Rewcastle Brown was a retired London TV journalist when she came across the biggest story of her life: 13,000 km away, in Malaysia, there was a staggering network of corruption that appeared to reach the top of the country's political power structure. She's not done reporting it yet

A week before she was to give a keynote address at an antifraud conference in Singapore, Clare Rewcastle Brown received an anonymous email. “Dear Madam, I want to thank you for exposing all the corruption and wrongdoing in Malaysia,” it read. read more »

Can An SEC Nominee With Ties To Goldman Regulate Wall Street Impartially?

President-elect Donald Trump is nominating Jay Clayton, a Wall Street lawyer, to be the head of the Securities and Exchange Commission. Some who know him say Clayton is a good man for the job, but critics say his ties to big financial firms create too many conflicts of interest.

The big question is whether Trump has chosen a fox to guard the henhouse.

Clayton works as a lawyer for a firm that has represented Goldman Sachs for decades. He also represented Ally Financial and other financial firms when they struck settlements related to wrongdoing in the subprime mortgage scandal.

And Clayton's wife currently works for Goldman Sachs. read more »

Regulators Reach $5 Million Settlement With Corzine in MF Global Case

After more than five years of investigations and negotiations, the curious case of MF Global is finally closed.

On Thursday, federal regulators announced a $5 million settlement with Jon S. Corzine, who ran MF Global when it collapsed into bankruptcy in 2011 and lost more than $1 billion in customer money. The settlement, reached unanimously at the Commodity Futures Trading Commission in the waning days of the Obama administration and approved by a federal judge this week, caps a long-running spectacle that derailed Mr. Corzine’s career and spurred a number of congressional, criminal and regulatory investigations. read more »

When A Wall Street Firm Took A Stab At Casino Capitalism

It's illegal for casinos in Nevada to take bets from out of state. But that didn't stop one subsidiary of a Wall Street firm from trying.

When people want to get in a jab at Wall Street, they sometimes call what bankers do casino capitalism.

The idea was simple. The Wall Street firm Cantor Fitzgerald was going to create a new company, Cantor Gaming. And Cantor Gaming was going to revolutionize the sports betting industry in Las Vegas. read more »

 

 

Ex-Jefferies trader lied to customers, jurors are told

Bond trader Jesse Litvak lied to customers about mortgage securities prices because he wanted to make more money for his employer, a federal prosecutor said on Thursday, as a retrial of the former Jefferies Group Inc managing director got underway.

Litvak faces securities fraud charges for having allegedly misled his customers from 2009 to 2011, causing them to overpay for bonds they bought and be paid less for bonds they sold.

Prosecutors have said Litvak's fraud boosted profit by about $2.25 million at Jefferies, a unit of Leucadia National Corp , and also increased his bonus.

"The evidence will show the lies meant more money for Jefferies and less for customers," Heather Cherry, an assistant U.S. attorney, told jurors in her opening argument in the New Haven, Connecticut federal court. read more »

A U.S. Imperative: High-Quality, Globally Accepted Accounting Standards

Outgoing SEC Chair Mary Jo White

“The strength of the U.S. capital markets depends on investors knowing that they can rely on the financial information that is available to them when they make investment decisions.  High-quality accounting standards are the foundation upon which this reliance is built.  The Commission has an important responsibility to investors and our markets to ensure that the accounting standards reliably produce the information our markets demand…” read more »

 

 

In American Towns, Private Profits From Public Works

Desperate towns have turned to private equity firms to manage their waterworks. The deals bring much-needed upgrades, but can carry hefty price tags.

In the typical private equity water deal, higher rates help the firms earn returns of anywhere from 8 to 18 percent, more than what a regular for-profit water company may expect. And to accelerate their returns, two of the firms have applied a common strategy from the private equity playbook: quickly flipping their investment to another firm. This includes K.K.R., which is said to be shopping its 90 percent stake in the Bayonne venture, a partnership with the water company Suez. read more »

 

Deutsche Bank Eyes Private Equity Help in U.S. Settlement

Deutsche Bank AG is supposed to give relief to subprime mortgage borrowers as part of a $7.2 billion settlement with the U.S. government. It is considering an unusual approach to meeting that requirement: lending money to private equity firms and hedge funds.

Germany’s biggest bank, dogged last year by questions about its capital levels, is exploring ways to avoid using its balance sheet to buy soured mortgages that it can partially forgive, according to a person with knowledge of the matter. One option it’s reviewing is to instead lend to firms like Lone Star Funds, which specialize in buying bad mortgages from government auctions and lowering consumers’ obligations. Amanda Williams, a spokeswoman for Deutsche Bank, declined to comment. read more »