US regulatory and law-enforcement authorities are engaged in discussions about how to stop the worldwide spread of Internet pyramid schemes, following criminal indictments in Massachusetts against the owners of TelexFree Inc., who allegedly conducted a $1 billion global fraud. The talks involve creating a coalition of federal and state securities regulators, as well as law-enforcement agencies, who would in turn reach out to their counterparts abroad, according to two US officials with knowledge of the effort. The Department of Justice is among the parties participating in the process. More in the Boston Globe [...]
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While the industry awaits a decision by the SEC on whether it will move forward with a uniform fiduciary rule for brokers and advisors, fiduciary advocates will engage this month in a debate about the importance of the two fiduciary rulemakings being considered by the SEC and the Department of Labor, as well as what the industry’s role should be in shaping fiduciary standards. As Fiduciary September approached—and with only three months remaining until SEC Chairwoman Mary Jo White’s self-imposed deadline for the agency to make by year-end a “threshold decision” on whether and how to move forward on a fiduciary rulemaking—I reached out to top fiduciary thinkers to get their views on where the commission may be headed. More on ThinkAdvisor [...] The latest settlement with a big bank, this time Bank of America’s $16.65 billion resolution over shoddy mortgage and related mortgage-backed securities that lost much of their value, has all the accoutrements we have come to expect: a claim of historic significance supported by a statement of facts referencing a few embarrassing e-mails to establish the requisite venality for a large penalty. A prominent feature is a news conference where Attorney General Eric H. Holder Jr. hails the resolution as yet another blow against the reckless (or worse) banking practices that led to the financial crisis. Like a graduation speech or school concert, however, the settlements start to run together with little to distinguish them. In the past year, JPMorgan Chase and Citigroup joined Bank of America in resolving investigations into mortgage operations, much of which took place in companies that the banks acquired during the financial crisis. More in the New York Times here. Bank of America Corp. has agreed to pay $16.65 billion to end federal and state investigations into the sale of toxic mortgage securities during the subprime housing boom, the largest settlement by a single company in U.S. history, the Justice Department said Thursday. The settlement includes $9.65 billion in fines and $7 billion in aid to communities and homeowners hit hard by the housing market crash that triggered the Great Recession. More in the LA Times [...] The Justice Department on Thursday announced that it has struck an almost $17 billion deal with Bank of America to settle government charges over toxic mortgage-backed securities sold to investors in the years leading up to the 2008 financial crisis. A former associate dean from the Massachusetts Institute of Technology school and his son, a Harvard Business School graduate have been caught running a hedge fund scam, say authorities looking at Bernie Madoff’s Ponzi scheme. Gabriel Bitran, a professor and associate dean at MIT’s Sloan School of Management, and his son, Marco, a money manager, have pleaded guilty to charges of conspiracy to commit securities fraud, wire fraud and obstruction of justice in connection with their hedge fund businesses, by Boston prosecutors. The father and son are facing up to five years in prison. More on MarketWatch [...] A former Massachusetts Institute of Technology dean and his son have agreed to plead guilty to criminal charges for running an alleged hedge fund scam that lost more than $140 million in investors’ money, according to federal prosecutors in Boston. Investigators said they discovered the scam while they unraveled Bernard Madoff’s infamous Ponzi scheme. Gabriel Bitran, 69, and his son Marco, 39, are accused of conspiracy to commit securities fraud, wire fraud and obstruction of justice in connection with their GMB Capital Management and GMB Capital Partners hedge fund businesses. More in USA Today [...] Forget House of Cards, Game of Thrones, Madmen, and all the other series you can’t wait to restart. There’s a new series out that beats them all. It went live yesterday on this channel. It’s free for the viewing, well, actually for the reading. It’s as shocking and scary as anything you’ll see in The Walking Dead. SIPC’s Brokerage Account ‘Insurance’ Scam: Take It from a Comptroller of the Currency Take It From a Comptroller of the Currency: Congress Needs to Act Now to Protect Investors from SIPC “Insurance” by James E. Smith On September 25, 2000, eight years before the scams of Bernard Madoff and R. Allen Stanford were uncovered, Gretchen Morgenson (financial journalist for the New York Times) wrote a perceptive column of exacting detail describing the Securities Investor Protection Corporation’s pinched and adversarial practices aimed at favoring the SIPC Fund over protecting innocent customers of failed broker dealers. That column was “dead on” concerning SIPC’s regrettable culture, in which litigation rather than protection is too often the order of the day. [...] Investors who managed to withdraw funds in recent years from the Ross Asset Management group of companies, found to be a Ponzi scheme, have been put on notice that the liquidators may try to claw back the cash. PwC’s John Fisk and David Bridgman said they have a valid claim on any funds withdrawn from the investment scheme since December 2010 under the Companies Act on the basis investors would receive more than their entitlement under a liquidation. The liquidators also believe they can make a claim on anyone who drew funds within the past six years under the Property Law Act on the basis they were part of David Ross’s fraud. The managers weren’t able to cut deals with three investors who withdrew some $3.8 million in the lead-up to Ross Asset Management’s collapse in 2012, and expect to “imminently” file proceedings in the High Court, they said in their latest report. More in the New Zealand Herald [...] |
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