Just because he's never been publicly accused before doesn't mean he never did anything wrong.
“This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity.” “I intend to clear my name by defending myself vigorously against this politically motivated lawsuit.”
STEVEN L. RATTNER
"Mr. Rattner now has a lot to say as he spins his friends in the press, but when he was questioned under oath about his pension fund dealings he was much less talkative, taking the Fifth and refusing to answer questions 68 different times."
RICHARD BAMBERGER, a spokesman for Attorney General Andrew M. Cuomo of New York.
Financier Is Sued by Cuomo in Fraud Case
By LOUISE STORY and PETER LATTMAN
November 19, 2010
Steven L. Rattner, the financier who oversaw the federal rescue of the auto industry, was formally accused by New York’s attorney general, Andrew M. Cuomo, on Thursday of engaging in a kickback scheme involving the state’s pension system.
On the same day that Mr. Rattner was being celebrated on Wall Street for his role in turning around General Motors, he found himself embroiled in a bitter public battle with Mr. Cuomo, he settled similar charges with the Securities and Exchange Commission and he escalated a separate legal fight against his former investment firm.
Even as a resurgent G.M. went public again in a huge stock sale on Thursday, Mr. Cuomo sought to banish Mr. Rattner for life from the securities business in New York.
The civil fraud claims, which Mr. Rattner fiercely contested, came within moments of news that the financier had settled a related dispute with the S.E.C. In that case, Mr. Rattner accepted a two-year ban from certain Wall Street businesses and, without admitting or denying wrongdoing, agreed to pay a $6.2 million fine...
Showing posts with label SEC. Show all posts
Showing posts with label SEC. Show all posts
Friday, November 19, 2010
Friday, July 30, 2010
Attorney for Wyly brothers charged in huge fraud
Billionaire Brothers Samuel and Charles Wyly Charged With $550 Million Fraud
By JONATHAN BERR
07/30/10
DailyFinance
Billionaire brothers Samuel Wyly (pictured) and Charles Wyly were charged Thursday by the Securities & Exchange Commission with orchestrating a 13-year-long securities fraud that reaped them $550 million in undisclosed gains that were hidden in a series of transactions in the Isle of Man and the Cayman Islands tax havens.
The SEC alleges that the brothers created an "elaborate sham system of trusts and subsidiary companies" to sell more than $750 million worth of stock in four public companies for which they were corporate directors. The brothers also allegedly committed an insider-trading violation connected to one of the companies for an unlawful gain of more than $31.7 million.
According to the SEC, the shares that the Wylys sold in the alleged scheme were of Michaels Stores, Sterling Software, Sterling Commerce, and Scottish Annuity & Life Holdings. The SEC also charged the Wyly's attorney, Michael C. French, and their stockbroker, Louis J. Schaufele III. French was on the board of directors at three of the companies...
By JONATHAN BERR
07/30/10
DailyFinance
Billionaire brothers Samuel Wyly (pictured) and Charles Wyly were charged Thursday by the Securities & Exchange Commission with orchestrating a 13-year-long securities fraud that reaped them $550 million in undisclosed gains that were hidden in a series of transactions in the Isle of Man and the Cayman Islands tax havens.
The SEC alleges that the brothers created an "elaborate sham system of trusts and subsidiary companies" to sell more than $750 million worth of stock in four public companies for which they were corporate directors. The brothers also allegedly committed an insider-trading violation connected to one of the companies for an unlawful gain of more than $31.7 million.
According to the SEC, the shares that the Wylys sold in the alleged scheme were of Michaels Stores, Sterling Software, Sterling Commerce, and Scottish Annuity & Life Holdings. The SEC also charged the Wyly's attorney, Michael C. French, and their stockbroker, Louis J. Schaufele III. French was on the board of directors at three of the companies...
Monday, April 26, 2010
Tourre emails show agony, ecstasy of being a banker
Tourre emails show agony, ecstasy of being a banker
By Alistair Barr, MarketWatch
April 26, 2010
Fabrice Tourre comes across as an arrogant investment banker in the Securities and Exchange Commission lawsuit against him and his employer Goldman Sachs Group Inc.
But personal emails released by Goldman /quotes/comstock/13*!gs/quotes/nls/gs (GS 151.93, -5.47, -3.48%) this weekend show Tourre struggling with "ethical questions" as he sold complex mortgage-related securities that he worried were suspect.
The SEC charged Goldman with securities fraud on April 16, alleging the investment bank didn't tell investors in a collateralized debt obligation that hedge fund firm Paulson & Co. helped structure the deal and was betting against it. Goldman and Paulson have denied wrongdoing. Read about the charges.
The SEC also charged Tourre, an executive director in Structured Products Group Trading, with securities fraud, alleging he was mainly responsible for the CDO, known as ABACUS 2007-AC1. Pamela Chepiga, an attorney for Tourre, declined to comment.
In the suit, the SEC quoted a January 2007 email that Tourre sent to a friend.
"More and more leverage in the system, The whole building is about to collapse anytime now...Only potential survivor, the fabulous Fab[rice Tourre]...
Friday, April 23, 2010
SEC staff surfed porn sites during crisis buildup: inspector
April 23, 2010
SEC staff surfed porn sites during crisis buildup: inspector
By Ronald D. Orol
MarketWatch
WASHINGTON (MarketWatch) -- As the 2008 financial crisis was developing, top Securities and Exchange Commission employees and contractors were using government computers on official time to view pornography, according to an SEC inspector general.
The SEC's inspector general found that 33 employees or contractors violated commission rules and policies by viewing porn, according to a memo obtained Friday by MarketWatch. The investigation was requested by Sen. Charles Grassley, R-Iowa.
The memo reported incidents by year:
*
2010: 3 so far
*
2009: 10
*
2008: 16
*
2007: 2
*
2006: 1
*
2005: 1
The 33 employees cited in the memo represent less than 1% of the SEC's approximately 4,000 employees. Of those employees, 17 were senior officials whose salaries ranged from $100,000 to $222,000, according to the memo. It isn't clear if the employees discussed in the memo were involved in oversight matters related to the financial crisis.
According to the memo, a regional office supervisory staff accountant admitted he frequently viewed pornography at work on his SEC computer for about a year and accessed pornography on his SEC-issued laptop computer while on official government travel.
Another regional office supervisory staff accountant admitted that he used an SEC assigned computer to access Websites containing pornography and other sexually explicit material during work hours fairly frequently, sometimes twice a day, according to the memo.
Another regional office staff accountant received 16,000 access denials for Internet websites classified by the SEC's Internet filter as "Sex" or "porn" in a one-month period. "In addition, the hard drive of this employee's SEC laptop contained numerous sexually suggestive and inappropriate images," the memo said.
A senior attorney at the SEC's headquarters in Washington admitted accessing Internet port so frequently that, according to the memo, on some days, he spent eight hours accessing Internet porn.
"In fact, this attorney downloaded so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office," the memo said.
Rep. Darrell Issa , R-Calif., the Ranking Member of the House Committee on Oversight and Government Reform, said he was disturbed by the findings.
"It is nothing short of disturbing that high-ranking officials within the SEC were spending more time looking at pornography than taking action to help stave off the events that brought our nation's economy to the brink of collapse," he said in a statement. "This stunning report should make everyone question the wisdom of moving forward with plans to give regulators like the SEC even more widespread authority. Inexplicably, rather than exercise its existing regulatory enforcement authority, SEC officials were preoccupied with other distractions."
Ronald D. Orol is a MarketWatch reporter, based in Washington.
SEC staff surfed porn sites during crisis buildup: inspector
By Ronald D. Orol
MarketWatch
WASHINGTON (MarketWatch) -- As the 2008 financial crisis was developing, top Securities and Exchange Commission employees and contractors were using government computers on official time to view pornography, according to an SEC inspector general.
The SEC's inspector general found that 33 employees or contractors violated commission rules and policies by viewing porn, according to a memo obtained Friday by MarketWatch. The investigation was requested by Sen. Charles Grassley, R-Iowa.
The memo reported incidents by year:
*
2010: 3 so far
*
2009: 10
*
2008: 16
*
2007: 2
*
2006: 1
*
2005: 1
The 33 employees cited in the memo represent less than 1% of the SEC's approximately 4,000 employees. Of those employees, 17 were senior officials whose salaries ranged from $100,000 to $222,000, according to the memo. It isn't clear if the employees discussed in the memo were involved in oversight matters related to the financial crisis.
According to the memo, a regional office supervisory staff accountant admitted he frequently viewed pornography at work on his SEC computer for about a year and accessed pornography on his SEC-issued laptop computer while on official government travel.
Another regional office supervisory staff accountant admitted that he used an SEC assigned computer to access Websites containing pornography and other sexually explicit material during work hours fairly frequently, sometimes twice a day, according to the memo.
Another regional office staff accountant received 16,000 access denials for Internet websites classified by the SEC's Internet filter as "Sex" or "porn" in a one-month period. "In addition, the hard drive of this employee's SEC laptop contained numerous sexually suggestive and inappropriate images," the memo said.
A senior attorney at the SEC's headquarters in Washington admitted accessing Internet port so frequently that, according to the memo, on some days, he spent eight hours accessing Internet porn.
"In fact, this attorney downloaded so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office," the memo said.
Rep. Darrell Issa , R-Calif., the Ranking Member of the House Committee on Oversight and Government Reform, said he was disturbed by the findings.
"It is nothing short of disturbing that high-ranking officials within the SEC were spending more time looking at pornography than taking action to help stave off the events that brought our nation's economy to the brink of collapse," he said in a statement. "This stunning report should make everyone question the wisdom of moving forward with plans to give regulators like the SEC even more widespread authority. Inexplicably, rather than exercise its existing regulatory enforcement authority, SEC officials were preoccupied with other distractions."
Ronald D. Orol is a MarketWatch reporter, based in Washington.
Friday, April 16, 2010
U.S. government accuses Goldman Sachs of fraud
Apr 16, 2010
U.S. government accuses Goldman Sachs of fraud
A Wall Street bombshell: The SEC takes the investment bank to court, just as debate over financial reform heats up
By Andrew Leonard
The vampire squid is under attack! How it will end is anybody's guess, but for now, the first line of the Security and Exchange Commission's complaint against Goldman Sachs accusing the investment bank of securities fraud must sound like sweet sweet music to anyone who has long been outraged by the Wall Street machinations at the heart of the financial crisis.
The Commission brings this securities fraud action against Goldman, Sachs & Co. ("GS&Co") and a GS&Co employee, Fabrice Tourre ("Tourre"), for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation ("CDO") GS&Co structured and marketed to investors.
The New York Times' Gretchen Morgenson and Louise Story scooped the rest of the business press with news of the SEC action, which launches perhaps the most dramatic confrontation between the U.S. government and an American corporation since Bill Clinton's Justice Department brought an antirust suit against Microsoft. The details of the complaint are complex, but the heart of the story is very simple.
According to the SEC complaint, in early 2007, at the request of John Paulson, a prominent hedge fund trader, Goldman Sachs created a security -- called Abacus 2007 AC-1 -- built from underlying mortgage-backed securities that Paulson had cherry-picked as most likely to blow up. While Goldman Sachs then turned around and sold the security to its own clients, Paulson and Goldman bought credit default insurance on the underlying mortgage bonds. Paulson and Goldman cashed in, while Goldman's clients lost millions. At no time did Goldman divulge Paulson's involvement to its clients...
U.S. government accuses Goldman Sachs of fraud
A Wall Street bombshell: The SEC takes the investment bank to court, just as debate over financial reform heats up
By Andrew Leonard
The vampire squid is under attack! How it will end is anybody's guess, but for now, the first line of the Security and Exchange Commission's complaint against Goldman Sachs accusing the investment bank of securities fraud must sound like sweet sweet music to anyone who has long been outraged by the Wall Street machinations at the heart of the financial crisis.
The Commission brings this securities fraud action against Goldman, Sachs & Co. ("GS&Co") and a GS&Co employee, Fabrice Tourre ("Tourre"), for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation ("CDO") GS&Co structured and marketed to investors.
The New York Times' Gretchen Morgenson and Louise Story scooped the rest of the business press with news of the SEC action, which launches perhaps the most dramatic confrontation between the U.S. government and an American corporation since Bill Clinton's Justice Department brought an antirust suit against Microsoft. The details of the complaint are complex, but the heart of the story is very simple.
According to the SEC complaint, in early 2007, at the request of John Paulson, a prominent hedge fund trader, Goldman Sachs created a security -- called Abacus 2007 AC-1 -- built from underlying mortgage-backed securities that Paulson had cherry-picked as most likely to blow up. While Goldman Sachs then turned around and sold the security to its own clients, Paulson and Goldman bought credit default insurance on the underlying mortgage bonds. Paulson and Goldman cashed in, while Goldman's clients lost millions. At no time did Goldman divulge Paulson's involvement to its clients...
Sunday, January 31, 2010
Long Island Congressional Candidate Cited for Giving Up JPMorgan Whistleblower
George Demos (dark hair, third from right) made a lot of friends by tipping off JPMorgan about a whistle-blower who was talking to the SEC. It may safely be assumed that none of the folks in the photo above are very concerned about the integrity of investigations into bank fraud.
Long Island Congressional Candidate Cited for Giving Up JPMorgan Whistleblower
01/28/10
Politics Daily
George Demos is a Republican Congressional candidate from Eastern Long Island whose Web site bears the slogan "Fighting for Freedom," and touts his service as an enforcement lawyer in the New York office of the Securities and Exchange Commission. A bio says that he "handled some of the SEC's most significant investigations," including that of Ponzi scheme artist Bernard Madoff, and "worked tirelessly on the cases that never made the headlines."
But one case that never made headlines was his own: Demos' campaign Web site and public statements omit any reference to a report last March of the SEC's Inspector General (IG), which found he had improperly disclosed protected, nonpublic information about a whistleblower to the counsel for that whistleblower's employer, a major Wall Street bank, JPMorgan Chase. The IG's charges of misconduct grew out of an SEC probe that began in 2003 of JPMorgan and other big financial institutions suspected of illegal market practices.
Wednesday, October 14, 2009
Madoff victims sue SEC for 'negligence'
See all Bernie Madoff posts.
Madoff victims sue SEC for 'negligence'
By Aaron Smith
CNNMoney.com staff writer
October 14, 2009
Two victims of the convicted Ponzi schemer Bernard Madoff filed suit Wednesday against the Securities and Exchange Commission, accusing the government regulator of negligence in failing to protect investors.
Molchatsky and Schneider accuse the SEC of failing to detect Madoff's long-running scam, which stole billions of dollars from thousands of investors.
"Through its negligent actions and inactions ... the SEC caused Madoff's scheme to continue, perpetuate and expand, eventually in billions in losses by investors...
The lawsuit said that SEC regulators had "countless opportunities" to stop Madoff's scheme "and botched all of them."
"Instead of watching the backs of Ms. Molchatsky and Dr. Schneider and the backs of all the other investors, the SEC -- through its negligence -- was effectively watching Bernie Madoff's back," said one of the plaintiffs' lawyers, former SEC attorney Howard Elisofon. "Now it is time for the SEC to be held accountable and for the federal government to do what the law says it must do: compensate the victims for its negligence."
The lawsuit noted that, between 1992 and 2008, the SEC received "at least eight complaints or submissions indicating that Madoff was operating a Ponzi scheme."
Madoff victims sue SEC for 'negligence'
By Aaron Smith
CNNMoney.com staff writer
October 14, 2009
Two victims of the convicted Ponzi schemer Bernard Madoff filed suit Wednesday against the Securities and Exchange Commission, accusing the government regulator of negligence in failing to protect investors.
Molchatsky and Schneider accuse the SEC of failing to detect Madoff's long-running scam, which stole billions of dollars from thousands of investors.
"Through its negligent actions and inactions ... the SEC caused Madoff's scheme to continue, perpetuate and expand, eventually in billions in losses by investors...
The lawsuit said that SEC regulators had "countless opportunities" to stop Madoff's scheme "and botched all of them."
"Instead of watching the backs of Ms. Molchatsky and Dr. Schneider and the backs of all the other investors, the SEC -- through its negligence -- was effectively watching Bernie Madoff's back," said one of the plaintiffs' lawyers, former SEC attorney Howard Elisofon. "Now it is time for the SEC to be held accountable and for the federal government to do what the law says it must do: compensate the victims for its negligence."
The lawsuit noted that, between 1992 and 2008, the SEC received "at least eight complaints or submissions indicating that Madoff was operating a Ponzi scheme."
Wednesday, July 08, 2009
Lori Richards, Director of SEC Inspections Office, Resigns after Failing to Uncover Madoff Fraud
Director of SEC Inspections Office Resigns
By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, July 9, 2009
A senior Securities and Exchange Commission official who oversaw an office that conducted key probes of Bernard L. Madoff's business is resigning, following a period when the agency reevaluated how it conducts oversight of brokers and investment advisers.
Lori A. Richards is stepping down after 14 years as director of the Office of Compliance Inspections and Examinations, which has come under scrutiny for its role in the SEC's monitoring of Madoff's business. Her office reviewed his firm at least three times, in 1999, 2004 and 2005, without finding the multibillion-dollar fraud he was conducting.
With Richards' departure, SEC Chairman Mary L. Schapiro will soon have installed her own people in nearly all the top positions at the embattled agency. Early in her tenure, she asked enforcement director Linda Thomsen to leave and hired Robert Khuzami, a former federal prosecutor focused on white-collar crimes in New York, as a replacement...
By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, July 9, 2009
A senior Securities and Exchange Commission official who oversaw an office that conducted key probes of Bernard L. Madoff's business is resigning, following a period when the agency reevaluated how it conducts oversight of brokers and investment advisers.
Lori A. Richards is stepping down after 14 years as director of the Office of Compliance Inspections and Examinations, which has come under scrutiny for its role in the SEC's monitoring of Madoff's business. Her office reviewed his firm at least three times, in 1999, 2004 and 2005, without finding the multibillion-dollar fraud he was conducting.
With Richards' departure, SEC Chairman Mary L. Schapiro will soon have installed her own people in nearly all the top positions at the embattled agency. Early in her tenure, she asked enforcement director Linda Thomsen to leave and hired Robert Khuzami, a former federal prosecutor focused on white-collar crimes in New York, as a replacement...
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