The whistleblower who exposed Bernie Madoff thinks the insurance industry is riddled with fraud

The Big Four accounting firms are so bad at catching fraud that they couldn’t even catch a cold, with incentives in the industry totally screwed up. That’s the view of the of the whistleblower who uncovered the $65 billion Madoff Ponzi scheme and he thinks fraud is endemic in the insurance industry as well.

Harry Markopolos is the former derivatives professional turned independent financial forensic investigator who spent nine years trying to convince the SEC that Madoff needed to be examined, but it was only the onset of the financial crisis and the massive redemptions he faced that forced Madoff to turn himself in. read more »

Libyan sovereign fund seeks to appeal judgment in Goldman case

Libya's $67 billion sovereign wealth fund will turn to the UK Court of Appeal, a source said on Friday, after a high court judge denied it permission to appeal her judgment in a $1.2 billion case against Goldman Sachs.

Responding to the fund's request, Judge Vivien Rose denied it permission to appeal her October judgment in which she dismissed the Libyan Investment Authority's (LIA) case against Goldman Sachs over nine equity derivatives trades made in 2008.

But a source with knowledge of the matter told Reuters the LIA is now likely to seek permission from the Court of Appeal. read more »

Alleged 2010 flash crash trader loses latest appeal against extradition to US

Navinder Singh Sarao, the British trader accused of illicitly making $40m and causing a stock market "flash crash" in 2010, has lost his attempt to appeal against extradition to the US.

Sarao is accused of 22 counts of wire fraud, commodities fraud, commodities manipulation and "spoofing" between 2009 and 2014, in addition to allegedly causing the flash crash.

It is alleged that he used bespoke software to allow him to place orders on the market long enough for everyone else's trading algorithms to see the trades and react, but not long enough for the trades to complete – a matter of a millisecond or two.

The trader, who is said to have operated out of a house owned by his parents in Hounslow, west London, was refused permission to appeal by Lord Justice Gross and Mr Justice Nicol of the High Court in a judgment issued on Thursday. 

The abuse of process and dual criminality arguments were also thrown out by the court in a 12-page judgment. 

Judge upholds block on creditor lawsuits against Puerto Rico

A U.S. federal judge upheld a block on creditors' ability to file lawsuits against the government of Puerto Rico in an attempt to extract repayment on defaulted bonds while the island seeks to restructure its $70 billion debt load.

The denial of the creditors lawsuits, which sought to remove or vacate an automatic stay order that currently blocks repayment, was issued by Puerto Rico District Judge Francisco Besosa late on Wednesday. read more »

Wells Fargo Faces Scrutiny for Black Marks on Ex-Employee Files

Three senators fired at Wells Fargo’s new chief executive with fresh ammunition on Thursday: the hundreds of termination notices the bank filed with an industry overseer over the last five years as employees left the company in connection with its sales scandal.

When brokers and certain other registered representatives leave a bank — voluntarily or otherwise — the company is required to file a notice with the Financial Industry Regulatory Authority, known as Finra. Called a “U5,” the form includes a field where the bank must disclose any allegations that played a role in the employee’s departure.

A negative comment on a U5 is a scorching mark that can make it almost impossible to find another job in the banking field. read more »

Wells Fargo sales scandal extends to brokerage unit -U.S. senators.

Wells Fargo & Co fired hundreds of brokerage employees for improper sales practices, three U.S. senators said on Thursday, widening the scope of a scandal which the fourth-largest U.S. bank has so far characterized as a retail banking problem.

In a letter to Wells Fargo Chief Executive Tim Sloan, Senators Elizabeth Warren, Ron Wyden and Robert Menendez questioned the bank's disclosures about those employees' dismissals in required regulatory filings.

The letter is the first indication that customers of the brokerage business, known as Wells Fargo Advisors, may also have been affected. read more »

U.S. Charges in Generic-Drug Probe to Be Filed by Year-End

U.S. prosecutors are bearing down on generic pharmaceutical companies in a sweeping criminal investigation into suspected price collusion, a fresh challenge for an industry that’s already reeling from public outrage over the spiraling costs of some medicines.

The antitrust investigation by the Justice Department, begun about two years ago, now spans more than a dozen companies and about two dozen drugs, according to people familiar with the matter. The grand jury probe is examining whether some executives agreed with one another to raise prices, and the first charges could emerge by the end of the year, they said. read more »

Investor Sues Bofl Brass Over Schemes Behind $675M Loss

A Bank of Internet shareholder slapped the bank’s board of directors with a derivative suit in California federal court Thursday, claiming its members have engaged in a slew of schemes over more than three years that led to a one-day loss of $675 million when a whistleblower exposed the truth.

David DeYoung, a Utah resident who owns BofI Holding Inc. stock, filed a 140-page complaint that seeks to remedy alleged wrongdoing by 13 of BofI’s officers and directors that involved breaching their fiduciary duty, wasting corporate assets, grossly mismanaging the company and unjustly enriching themselves. read more »