Wells Fargo account scandal extends to small business - U.S. senator

Wells Fargo & Co's account scandal is not limited to its consumer banking sector, U.S. Senator David Vitter told the bank's chief executive in a letter.

Thousands of small business owners were also impacted by Wells Fargo's practices, wrote Vitter, a Republican from Louisiana, in a letter dated Sept. 29 to Wells Fargo chief executive John Stumpf and seen by Reuters.

Vitter demanded a "full accounting" of small business owners affected by "fraudulent activity." Around 10,000 small business accounts were affected by improper Wells practices, people familiar with the matter said. read more »

Australia's Lucky bankers

Business leaders never like being called up before lawmakers to answer for their sins. But Australian bank executives should be grateful for the way their feet are being held to the fire in Canberra this week.

There are numerous allegations leveled against the country's big four lenders -- Commonwealth Bank, Westpac, ANZ and NAB. They're a cozy cartel that fail to pass on interest rate movements to borrowers or depositors. They're a bunch of predators using sharp practice and giving improper financial advice to clients. They've been rigging the country's key interbank interest rate. Their executives are paid too much.

The so-called "four pillars" policy, which prohibits mergers between the big four lenders, certainly makes it look like the banks are an oligopoly that makes profits by limiting competition. A look at their financial statements, though, suggests a rather different picture. read more »

Investment Adviser Charged With Cherry-Picking and Misleading Clients

The Securities and Exchange Commission today announced fraud charges against an investment adviser accused of “cherry-picking” profitable trades for his own account rather than a client’s accounts, and misleading seniors and other clients about the fees he charged and the risks in investments he recommended.

The SEC Enforcement Division alleges that Laurence I. Balter and his Kihei, Hawaii-based firm Oracle Investment Research purchased equities and options in an omnibus account and waited to allocate the trades until after they were executed and Balter knew whether they were profitable.  Balter allegedly allocated profitable trades to his own accounts and unprofitable trades to his client accounts. read more »

Supreme Court Gives Health-Care Fraud The Cold Shoulder

The Supreme Court seems to have reduced its appetite for health-care fraud and False Claims Act cases in the new 2016 term after issuing a string of petition denials Oct. 3.

Two petitions challenging appellate wins by drugmakers Bayer AG and Sanofi-Aventis U.S. LLP in fraud cases were denied (United States ex rel. Walterspiel v. Bayer AG, U.S., No. 16-8, review denied 10/3/16; Sergeants Benevolent Ass’n Health and Welfare Fund v. Sanofi-Aventis U.S. LLP, U.S., No. 15-1525, review denied 10/3/16).

The high court actions, leaving intact two federal appeals court decisions, didn't address two issues of importance to health-care organizations. There is still hope, however, that the Supreme Court could rule in a fraud case with health-care implications during its current term.

Hedge Fund Founder Denies Fraud Charges, Gets Bail Reduced

Hedge fund founder Nicholas Mitsakos denied conspiracy and fraud charges Tuesday in New York federal court at a hearing where a judge approved a $300,000 reduction in the 57-year-old’s bail to fund a Herrick Feinstein LLP defense team.

Mitsakos' current lawyer, federal defender Martin S. Cohen, said the defendant was closing in on a financial arrangement with Herrick veteran counsel David Rosenfield. U.S. District Judge Paul A. Engelmayer lowered Mitsakos' bail, secured by equity on his mother's home, from $500,000 to $200,000. read more »

Aegis Oil Agrees To Pay $41M To End SEC Suit

Texas oil company Aegis Oil LLC has agreed to pay $41 million to end a U.S. Securities and Exchange Commission lawsuit claiming the company and its CEO sold about $35 million worth of unregistered securities and lied to investors, according to papers filed Tuesday in Florida federal court. read more »