Throwing Away a Legal Career for $310,000

Would you sell your career for $310,000? It appears that Jeffrey A. Wertkin may have tried to do just that by passing a copy of a sealed whistle-blower complaint against a Silicon Valley company to one of its employees in exchange for that amount.

Unfortunately, he never actually got the money because he was met instead by an F.B.I. agent, who arrested him. Mr. Wertkin responded “My life is over,” according to a complaint filed in the Federal District Court in San Francisco.

His life is certainly not over, but this perplexing case shows how hard it can be to figure out why apparently successful individuals commit white-collar crimes. More important for Mr. Wertkin, if he did what the government outlined in the complaint, this will ruin the rest of his life in ways that no one contemplates when deciding to commit a crime. read more »

The Rise and Fall of a K Street Renegade

Evan Morris, a high-flying corporate lobbyist, is suspected of embezzling millions of dollars in what is shaping up to be a sprawling Washington influence scandal

Few outside Washington had ever heard of Evan Morris. Yet in the capital of wheeling and dealing, he was one of its most gifted operators.

From his start as an intern in the Clinton White House, he made powerful friends and at age 27 became a top Washington lobbyist for Roche Holding AG of Switzerland, one of the world’s largest pharmaceutical companies.

Mr. Morris seized on an idea to reach past elected officials and take the company’s message directly to voters, a strategy that helped generate hundreds of millions of dollars for his company. By 2010, he was one of the youngest vice presidents in Roche’s 120-year history.

As head of the company’s Washington office, Mr. Morris oversaw a budget that over a decade ballooned to about $50 million a year and supported hundreds of lobbyists and consultants.

His apparent success afforded luxuries including $2,000 bottles of wine, a $3 million waterfront vacation home, a $300,000 mahogany speedboat and four Porsches. He belonged to eight private golf courses and hired top chefs to cook for dinner parties at his home. He married and had two children. read more »

How the Flash Crash Trader made $50m – and lost it again

Navinder Singh Sarao’s investments included backing an Irish entrepreneur’s online gaming business

It took Navinder Singh Sarao a long time to accept that he might have been scammed out of $50 million. Stuck in London’s Wandsworth prison, wracked with anxiety and unable to sleep, the realisation dawned on the man dubbed the “Flash Crash Trader” as slowly as spring turned to summer outside the barred window of his jail cell.

The trauma of the past few weeks had been difficult to process. On April 20th, 2015, the slight, doe-eyed 36-year-old had dozed off peacefully in the same suburban bedroom he’d slept in since he was a boy. The next day he was arrested and taken to a police station, where he was charged with 22 counts of fraud and market manipulation carrying a maximum sentence of 380 years.

According to the US government, the British day trader had made tens of millions of dollars using an illegal practice called spoofing, including, fatefully, on the morning of May 6th, 2010, when the Dow Jones Industrial Average fell almost 1,000 points in minutes before bouncing back. The extent of Sarao’s culpability for the “flash crash” is fiercely contested, but the incident exposed the shaky foundations on which the hyper-fast, computer-dominated financial markets now rest. read more »

Marathon 'pauses' launch of $89,000 muscular dystrophy drug in United States amid pricing outrage

Stung by criticism of its plan to charge a whopping $89,000 a year in the U.S. for a muscular dystrophy drug that costs less than $1,500 elsewhere, Marathon Pharmaceuticals on Monday said it was "pausing" that rollout for an unspecified amount of time.

Marathon also said that American patients who now receive that drug, deflazacort, from other sources "will continue to have that option."

Those patients who suffer from the genetic disorder or their parents have been importing deflazacort from other countries, for much less than what Marathon last week said it would begin charging for it in the United States.

And Marathon CEO Jeffrey Aronin also said the company "will meet with caregivers and explain our commercialization plans” read more »

U.S. lawsuit seeking $100 mln from Lance Armstrong heads to trial

A federal judge on Monday cleared the way for a U.S. government lawsuit seeking nearly $100 million in damages from former professional cyclist Lance Armstrong to go to trial, court papers showed.

The U.S. Justice Department has accused Armstrong of defrauding the government by accepting millions of dollars in sponsorship money from the U.S. Postal Service (USPS) as he led the team to a string of Tour de France victories while doping.

Armstrong was stripped of his seven Tour titles and banned for life from bicycle racing in 2012 by the U.S. Anti-Doping Agency after it accused him in a report of engineering one of the most sophisticated doping schemes in sports.

Nicole Navas, a spokeswoman from the Department of Justice, declined to comment on the case.

Eliot Peters, an attorney for Armstrong, did not respond to a request for comment.

Armstrong, who had long denied using performance-enhancing drugs (PEDs), admitted to doping in January 2013.

Armstrong's former teammate, Floyd Landis, originally brought the lawsuit in 2010 under a federal law, the False Claims Act, that lets whistle-blowers pursue fraud cases on behalf of the government, and obtain rewards if successful. read more »

Judge: False Claims trial of Blackwater successor to go ahead as scheduled

A federal judge denied a private security firm’s request last week to delay a trial which claims the company overbilled the government and falsified firearms qualifications for U.S. State Department guards in Afghanistan.

Two whistleblowers and former marksmen, Lyle Beauchamp and Warren Shepherd, filed the False Claims Act lawsuit against Academi Training Center Inc., the private military contractor formerly known as Blackwater. Lawyers for Academi asked U.S. District Judge T.S. Ellis III for a six-week delay in the trial, claiming the outcome of another pending trial would have implications for the case. Judge Ellis on Thursday rejected that request without explanation.

Beauchamp and Shepherd filed the initial complaint nearly six years ago, in April 2011. Back then Academi was known as Xe Services LLC. The pair of marksmen claimed their former employer lied about work duties, invoicing the government for salaries of snipers who, in reality, worked in an office. One manager never went on a mission, they claimed, and services were billed for contractors who’d been disqualified because of failed drug tests, or for snipers who were not qualified. read more »

Some Platinum hedge fund clients get hopeful sign from receiver

A federal court-appointed receiver for troubled U.S. hedge fund manager Platinum Partners has hinted that some clients may yet recover much of their assets.

"Though we have just initiated our review, thus far we have not observed a major shift in overall portfolio value," Bart Schwartz, chairman of Guidepost Solutions, wrote in a message posted to platinumpartnersreceiver.com last week.

Guidepost is working to liquidate Platinum's investments in hard-to-sell private energy, mining and other companies after six top executives of the firm, including founder Mark Nordlicht and President Uri Landesman, were charged in December with running a $1 billion fraud. All six have pleaded not guilty. read more »

Corruption Scandals With Brazilian Roots Cascade Across Latin America

Years of investigations have resulted in 77 Brazilian Odebrecht executives signing plea deals, and now officials across the region are facing legal trouble.

A former Peruvian president is a fugitive, charged with taking bribes. In Colombia, prosecutors say its president’s re-election campaign accepted dirty money. And intelligence agents in Venezuela arrested journalists and researchers looking into scandals there.

Latin America’s biggest corruption scandal is shaking the continent’s political establishment.

It can all be traced back to Odebrecht, the Brazilian construction company, which has built major projects throughout the region and late last year settled with the United States, Brazil and Switzerland for up to $4.5 billion under the Foreign Corrupt Practices Act for an elaborate bribe scheme involving $800 million in payoffs in exchange for lucrative contracts. read more »

Spanish Court Orders Criminal Inquiry Into Oversight of Bankia I.P.O.

Spain’s national court on Monday ordered a criminal inquiry into whether a former governor of the country’s central bank and seven other regulatory officials knowingly ignored financial problems at Bankia, the giant savings bank whose near collapse prompted Spain’s banking bailout in 2012.

The court said in a statement that there was sufficient evidence to indict the officials in connection with Bankia’s initial public offering in 2011, a year before the bank’s forced nationalization.

Top officials gave the listing regulatory clearance, the court said, “despite having full and thorough knowledge of the situation in which the entity found itself.” The court did not specify any possible charges but cited internal emails in which inspectors warned of the risks linked to Bankia’s finances. The warnings went unheeded by the inspectors’ superiors. read more »

Samsung chief Lee Jae Yong to be summoned again on suspicion of bribery in Park Geun Hye scandal

South Korea's special prosecutor said it would again summon Samsung Group scion Lee Jae Yong on Monday (Feb 13) to question him on suspicion of bribery, as it investigates a graft scandal that has engulfed the country's president.

Last month, special prosecution officials questioned 48-year-old Lee for more than 22 hours straight, but a court rejected a warrant to arrest him in the inquiry into a scandal that led parliament to impeach President Park Geun Hye. read more »

The Dodd-Frank Rule Banks Want to Keep

Orderly liquidation authority empowers the federal government to take over and wind down a failing financial firm

Republican promises to dismantle the 2010 Dodd-Frank financial overhaul may prove good news for many financial firms. The bad news for Wall Street: A top target is a provision big banks would rather retain. read more »

The Co-op Bank faces a swathe of problems with no quick answers

Lots of banks have been through the wars since the financial crisis. But few have had as tough a time as Co-operative Bank, which now looks like it needs to be rescued for the second time in four years.

For a relatively small institution it is losing scarily large amounts of money: £610m in 2015 and £117m in the first half of 2016.

These losses would be manageable if the bank was making progress and its investors believed it was a healthy long-term proposition.

But, with progress much slower than bosses hoped, the investors appear to be losing patience. read more »