An appearance before the Senate Banking Committee this month summed up the kind of year Securities and Exchange Commission Chairman Mary Schapiro is having. In the penultimate question of the session, the ranking Republican on the panel, Sen. Richard Shelby of Alabama, highlighted his party’s complaints about the agency. Ms. Schapiro acknowledged that the agency has experienced setbacks and that she “will always take responsibility.” Read more in Investment News [...]
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The securities industry is watching intently as the Securities and Exchange Commission and the Securities Investor Protection Corp. get set to do battle in court over SIPC’s refusal to make good on some of the losses suffered by victims of R. Allen Stanford’s alleged $7 billion Ponzi scheme. A lawsuit filed by the SEC last week to force SIPC’s hand is an unprecedented legal test of the limits of the commission’s power over the government-created and industry-funded entity that protects investors in cases where brokerage firms fail, observers said. Read Investment News report [...] Diana Henriques, author of “The Wizard of Lies: Bernie Madoff and the Death of Trust,” spent almost three years doing research for the book, including two prison interviews with Madoff. The Jewish financier led a Ponzi scheme considered to be the biggest financial deception in U.S. history; in 2009 he was sentenced to 150 years in prison. Henriques continues to cover the unfolding of the bankruptcy process and the criminal cases involved in the Madoff scandal. In an interview, she talks about Madoff’s motivations, his Jewish ties, his family and the extent to which he feels remorse. Read more on JWeekly [...] Prosecutors are asking a federal judge to rule that financier Allen Stanford has regained competence and can stand trial over an alleged $7.2 billion Ponzi scheme. Stanford, who was indicted in 2009 on 21 counts including securities fraud and money laundering, had been found by a U.S. judge early this year to be of diminished mental capacity and unable to assist in his own defense. But in November, the Bureau of Prisons Federal Medical Center in Butner, North Carolina, concluded that he is now competent to stand trial, according to court filings. Read Reuters report [...] Turns out sending Bernie Madoff to jail didn’t set an example for other financial criminals. According to FBI director Robert Mueller federal law enforcement agencies continue to uncover major fraud, insider trading and Ponzi schemes. At the end of fiscal year 2011, the FBI had more than 2,500 active corporate and securities fraud investigations representing a 47% increase since 2008. Read Forbes report [...] The Securities and Exchange Commission said on Thursday that it would appeal a federal court decision that harshly rejected a settlement between the commission and Citigroup over securities fraud charges related to the financial crisis. In a statement accompanying a filing in Federal District Court in New York, the agency cited “legal error” in the decision in late November and said it would ask the United States Court of Appeals for the Second Circuit to overturn the opinion of Judge Jed S. Rakoff. In the ruling, the judge rejected an agreement for Citigroup to pay $285 million and accept an injunction against future violations of an antifraud provision of federal securities laws. Another former employee of the swindler Bernard L. Madoff is expected to plead guilty to participating in her boss’s Ponzi scheme. Enrica Cotellessa-Pitz, the former controller of Bernard L. Madoff Investment Securities, will admit on Monday to falsifying the company’s records and making phony submissions to government regulators, according to a letter filed by federal prosecutors on Thursday. She has not been charged yet but is cooperating with the government, the letter said. Read more in the New York Times [...] The Securities and Exchange Commission needs fixing – fast. That’s the message of a new report issued by the U.S. Chamber of Commerce on Wednesday, which urged a major structural overhaul of the commission, including increasing the number of commissioners and limiting the number of mandated direct reports to the chairman. Read more in the Fiscal Times here. Three years have passed since Bernie Madoff’s arrest and the collapse of his Ponzi scheme. Yet it appears the public has learned little from the largest financial rip-off in history. Just look at some of the scams and schemes that have been uncovered recently…Sadly, there are far too many examples to list. The Diligentia Group identified more than 50 Ponzi schemes — with alleged damages of more than $835 million — foiled by regulators during the first half of 2011. Read more on MarketWatch [...] Before his $1.2 billion Ponzi scheme collapsed, Scott Rothstein crowed repeatedly to an alleged wealthy accomplice about the fraud’s huge success, calling himself “banker and pimp” and bragging that he operated the “International Bank of WOW!,” according to a new lawsuit that sheds fresh light on the scam’s inner workings. “Have I told you how much I loveeeeeeeeeeeeeeee this business … and how much I love the color green,” Rothstein said in one of many emails to the alleged accomplice, auto magnate Edward J. “Ted” Morse Jr. Read Washington Post report [...] |
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