U.S. SEC questioned Wells Fargo about cross-selling in 2014

The U.S. Securities and Exchange Commission raised questions about Wells Fargo & Co's aggressive cross-selling in late 2014, according to regulatory paperwork, almost two years before officials settled with the bank for opening phony accounts.

In December 2014, the SEC asked Wells Fargo to detail how it tallied the many accounts that one customer might open. read more »

We Need Whistleblowers To Save Indian Workers From H-1B Visa Fraud

The unscrupulous have long preyed on those seeking to immigrate to the United States. Scams and abuses affect all manner of hopeful immigrants, from hardworking agricultural labourers, to highly skilled experts in fields such as architecture, engineering and medicine.

Skilled labourers often enter the US on an H-1B visa. When it works as intended, the H1-B program promises attractive benefits to both immigrant workers and US ventures. In 2011-2014, more than 70% of H-1B visa holders came from India, with China as a distant second. Unfortunately, the H1-B visa is no protection against the types of fraud experienced by lower skilled workers.

But the particular leverage held by employers of foreign workers is that most visa programs require immigrants to work for the company that brought them to the States, or face deportation. Many visa-holders are thus vulnerable to entrapment in what some call a pseudo-slave-market regime that affects skilled and unskilled labour alike. Given this structure, wage abuse of immigrant workers is particularly rampant. Companies can—and do—violate US labour laws. One company was recently caught paying its Indian tech workers as low as $1.21 an hour for 120-hour work weeks.

Other companies pile on the various types of abuses and expose their own workers to deportation. For example, last year an Indian worker on the H-1B visa found himself facing an impossible dilemma. After he arrived in the US, he found out that his sponsoring company did not have the promised job available; also, they were not going to give him the promised salary figure, even though salary is an important component of a visa application. Knowing he needed to keep working for them or face deportation, the company offered him a false choice: stay in the US on their payroll, agree to contract work at a new company (thereby committing visa fraud), and give the sponsoring company a percentage fee off his new salary—or go back to India. This company's unscrupulous actions ultimately got him deported.

The US Department of Justice (DOJ) and the US Department of Labor (DOL) have begun cracking down on fraud aimed at visa holders and hopeful immigrants. Last year, two brothers were convicted of fraud based on a lucrative scheme in which they recruited experienced Indian workers with promises of full-time positions and annual salaries, but in fact hired out workers as part-time consultants at a substantial profit margin. And in 2013, the DOJ successfully settled a $34 million case against Infosys, the biggest sponsor of H-1B visas, for systematic visa fraud. read more »

More Stand-Alone Cases Lead To SEC's Record Enforcement Year

The SEC Enforcement Division filed a record 868 enforcement actions in fiscal year 2016, which closed September 30. Highlights of the enforcement program included the largest number of cases ever filed against investment advisers and investment companies, as well as 21 Foreign Corrupt Practices Act-related enforcement actions. Fiscal year 2016 also saw a new record for money distributed to whistle-blowers in a single year with $57 million paid to tipsters, and the SEC obtained judgments and orders totaling more than $4 billion in disgorgement and penalties.

Embraer Nears Deal With U.S., Brazil on Corruption Probe

Embraer SA is close to completing agreements with U.S. and Brazilian investigators to settle allegations of corruption that have hovered over the aircraft maker since 2011.

Final agreements -- with the U.S. Justice Department and Securities and Exchange Commission and with Brazil’s federal public prosecutor and market regulator CVM -- will have terms similar to those Embraer described in July, the company said in a statement Wednesday evening. Those included possible fines, a deferred prosecution agreement and the imposition of an independent monitor to assess compliance. read more »

Hedge Fund Firm and Supervisor Charged With Failing to Prevent Insider Trading

The Securities and Exchange Commission today announced that a hedge fund advisory firm and a senior research analyst have agreed to settle charges related to their failures to detect insider trading by one of their employees.

The SEC’s order finds that San Francisco-based Artis Capital Management failed to maintain adequate policies and procedures to prevent insider trading at the firm.  Artis Capital and specifically the employee’s supervisor Michael W. Harden failed to respond appropriately to red flags that should have alerted them to the misconduct. read more »

Escobar Readings Back Nixing $40B FCA Claims, Celgene Says

A trio of rulings based on the Supreme Court’s landmark Escobar decision in June show the government’s continued reimbursement for cancer drugs Thalomid and Revlimid render a $40 billion False Claims Act suit against their maker Celgene immaterial, the pharmaceutical company told a California federal judge Wednesday. read more »

Libor Plaintiffs Say Metals Ruling Backs Standing Claims

Investors suing JPMorgan Chase & Co. and other banks for allegedly manipulating the London Interbank Offered Rate continued to fight against the banks’ bid for dismissal of their antitrust claims, arguing Wednesday that a recent New York federal court decision in precious metals price-fixing cases supports their claims.

In a letter to U.S. District Judge Naomi Reice Buchwald, the plaintiffs cited the recent rulings in the gold and silver futures antitrust cases, in which U.S. Judge Valerie Caproni ruled that the investors adequately brought Sherman Act and Commodity Exchange Act claims against the defendants in the London Silver Market. Those plaintiffs, like the ones in this case, properly argued they are efficient enforcers, giving them antitrust standing, the investors said. read more »

Kuwait Food Co. Can't Duck Army Rations FCA Suit: Gov't

The U.S. government slammed a Kuwait food company's bid to be cut loose from a False Claims Act suit, telling a Georgia federal court Tuesday that the company knowingly conspired to inflate prices of U.S. Army troop rations in the Middle East. read more »