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Whistleblower News: Aequitas, Insider Trading, Libra, PG&E, Vale

by HB Whistleblower Legal Team


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Deloitte and others pay $235 million settlement over alleged role in Ponzi scheme

After three years in court, accounting giant Deloitte and others agreed last night to pay $234.6 million for allegedly enabling a giant Ponzi scheme run by now-defunct Aequitas Capital Management between 2010 and 2016.

Investors in Oregon-based Aequitas were seeking $350 million from a class action lawsuit, which alleged that the securities scheme couldn’t have happened without accountants like Deloitte and EisnerAmper—also a defendant in the lawsuit—signing off on their books, and lawyers including elite white-shoe firm Sidley Austin doing the paperwork.

The settlement is a warning to service firms that failing to sniff out potential wrongdoing by clients can cause years of expensive court proceedings, followed by a hefty payout.

The bilked investors’ could end up with up to $312 million once Aequitas’ remaining assets are sold out of receivership, the lawyers for the class action said in a statement. “We are incredibly proud of this recovery and it is pretty remarkable to be able to return this much money to the victims of a Ponzi scheme,” said Steve Berman, a lawyer for the investors. read more »

SEC Charges Accountant and Friend in $6.2 Million Insider Trading Scheme

The Securities and Exchange Commission today filed insider trading charges against an accountant and her friend, whom she illegally tipped with confidential information in advance of her company’s quarterly performance announcements in exchange for all-expense paid travel and other expensive gifts.  The alleged insider trading scheme generated profits of more than $6.2 million and was uncovered by the SEC through analysis and technology that it uses to detect suspicious trading activity. read more »

Facebook Libra cryptocurrency a 'serious concern' for Federal Reserve, report says

The US' central bank is looking into Libra.

The US Federal Reserve System has added its voice to the chorus of doubts raised by lawmakers, politicians and others worldwide about Facebook's newly announced cryptocurrency, Libra. While speaking to House lawmakers Wednesday, Federal Reserve Chairman Jerome Powell said the US central bank has "serious concerns" about Libra.

"While the project's sponsors hold out the possibility of public benefits, including improved financial access for consumers, Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability," Powell said when asked about Libra by Rep. Maxine Waters. read more »

PG&E Judge Demands Response to WSJ Report on Faulty Lines

PG&E Corp. was ordered by a federal judge overseeing its probation to respond to a Wall Street Journal story claiming the utility knew its power lines could cause wildfires and failed to perform upgrades.

PG&E “must provide a fresh, forthright statement owning up to the true extent” of the article, U.S. District Judge William Alsup said in Wednesday’s order. The judge, who has been critical of PG&E’s practices contributing to California’s wildfires, is overseeing its probation after it was convicted in 2016 of safety violations stemming from a 2010 gas-line explosion in San Bruno, California, that killed eight people.

PG&E is under criminal investigation in Butte County, California, over the deadliest fire in the state’s history. The Camp Fire, which raged in the northern part of the state for two weeks in November, destroyed the town of Paradise, killing 85 people, and prompted the utility to file for bankruptcy. read more »

Brazil's Vale ordered to pay compensation for dam disaster

A judge in Brazil has ordered mining giant Vale to pay compensation for all damages caused by the collapse of the Brumadinho dam in January.

The collapse was Brazil's worst industrial accident.

The judge did not set a figure for the compensation but said that the company was responsible for fixing all the damages including the economic effects. read more »