Judge denies motion to vacate in case against the SEC. Recent court filing can be found [...]
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The Futures Industry Association, which represents both small futures brokerage firms and big banks that run futures businesses, announced Tuesday that it had created a committee to explore new safeguards for customer money. The committee, called the Futures Market Financial Integrity Task Force, will consider changes like enforcing tougher internal controls and regularly reporting the whereabouts of money to customers. Read more in the New York Times [...] The U.S. Securities and Exchange Commission urged a judge to order the federal Securities Investor Protection Corp. to create a claims process for R. Allen Stanford’s alleged investment fraud victims. SEC lawyers asked U.S. District Judge Robert Wilkins during a hearing today in Washington to require SIPC, a nonprofit corporation funded by the brokerage industry, to start a liquidation proceeding in federal court in Texas to handle more than $1 billion in possible claims related to the alleged Stanford fraud. Read Bloomberg report here. [...] Texas financier Allen Stanford used lies and bribes to steal the hard-earned savings of his customers, prosecutors said on Tuesday. The former billionaire is accused of selling certificates of deposit from his bank in Antigua and using the money to finance his lifestyle, in one of the biggest white collar cases since Bernard Madoff. More on Reuters [...] In big-shot banking litigation these days, the settlement handshake may still happen, even if it’s increasingly no promise of final approval. (See, e.g., the SEC’s woes in getting approval for settlements with Bank of America and Citi, BofA’s struggle to get its $8.5 billion MBS deal done, and Delaware’s rejection today of a nationwide mortgage settlement.) Now you can add another to the list: HSBC Holdings PLC announced yesterday that it has terminated its proposed settlement agreement with investors in the Thema International Fund PLC, an Irish fund that invested with Bernard Madoff and lost $1.2 billion, on paper, when his scheme unraveled. Thema investors came to Manhattan federal court to sue the fund’s directors, auditors and the Irish HSBC entity that acted as the fund’s custodian. Read Reuters report [...] The Securities and Exchange Commission, after over a year of “study,” still cannot pull the trigger on new investor-protection rules it was tasked with implementing under the Dodd-Frank Act. The proposed “fiduciary duty” rule would raise the standard of conduct for financial advisors in their dealings with investors. After plenty of wrangling, the securities industry and investor groups have finally blessed the new rule, but the SEC has failed to act. There is no more time to wait, and if a new Presidential administration were to take over, the rule could be scotched altogether. Read Forbes article [...] President Obama announced a new unit devoted to major financial crimes as he offered tough words for Wall Street during his State of the Union address. The unit will be staffed by “highly trained investigators” and charged with tracking “large-scale fraud.” Obama argued Tuesday night that financial firms currently have little to fear for violating the law, and pressed Congress to beef up penalties for financial wrongdoing. More on The Hill [...] President Obama called on Congress Tuesday to toughen laws against securities fraud and to strengthen the ability of the Securities and Exchange Commission to punish Wall Street firms that repeatedly violate antifraud statutes. In his State of the Union address, Mr. Obama also said he would ask the attorney general to establish a special financial crimes unit to prosecute cases of large-scale financial fraud. Read more in the New York Times [...] It has been a tough few years for the Securities and Exchange Commission. It failed to spot Bernard L. Madoff’s multi-billion dollar Ponzi scheme after numerous warnings and investigations. Its blindness leading up to the financial crisis dropped its reputation to unprecedented lows as Congress and the media bashed the agency like a piñata, painting it as a bumbling and ineffectual sheriff incapable of serving as a watchdog over clever and fleet-footed miscreants. More in Forbes [...] The start of the R. Allen Stanford trial on Monday in Houston for his alleged $7 billion Ponzi scheme involving certificates of deposit is likely to be a bigger black eye for the Securities and Exchange Commission and Financial Industry Regulatory Authority than was the Bernie Madoff fiasco, one attorney says. “Fortunately for the SEC, Madoff pled guilty which thereby prevented a spotlight of a trial being shined on the SEC and all of their lapses,” says Andrew Stoltmann, of Stoltmann Law Offices in Chicago. “With Allen Stanford, the SEC is not so lucky. The likely message to come out at trial will be that Stanford was yet another politically connected financer who received preferential treatment from the SEC.” Read Advisor One article [...] |
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