Sentences For White-Collar Criminals: Too Harsh Or Too Lenient?

Reports of white-collar crime seem to be running rampant in the news as of late. Allegations of fraud, unethical business deals, identity theft and more are commonly reported on national news outlets. A hotly debated topic is whether the punishment related to white-collar crimes is fair. Some criminals receive lifetimes in prison, while others serve 30 years or less. Here is a look at several instances of white-collar crime and the punishment that was ordered. Read San Francisco Chronicle report [...]

SEC reviews Finra’s pay practices, governance

The Securities and Exchange Commission is reviewing the executive compensation and governance practices of Wall Street’s self-policing body, according to a government report released Wednesday. SEC examiners have collected data about the retirement plans and incentive pay for executives of the Financial Industry Regulatory Authority as part of the regulator’s plan to step up oversight of Finra later this year, the report from the Government Accountability Office said. Read MarketWatch report [...]

SEC: Taking on Big Firms is ‘Tempting,’ But We Prefer Picking on Little Guys

If you want to see a perfect example of how completely broken our regulatory system is, look no further than a speech that Daniel Gallagher, one of the S.E.C.’s commissioners, recently gave in Denver, Colorado. It’s a speech whose full lunacy is hard to grasp without some background. It’s by now been well-established that the S.E.C.’s performance in policing Wall Street before, after, and during the crash has been comically inept. It would be putting it generously to say that the top cop on the financial services beat has demonstrated particular incompetence with regard to investigations of high-profile targets at powerhouse banks and financial companies. A less generous interpretation would be that the agency is simply too afraid, too unwilling, or too corrupt to take on the really dangerous animals in this particular jungle. More in Rolling Stone [...]

In Hindsight, 37.5 Million Dollars Isn’t Cool. You Know What’s Cool? A Billion Dollars

Back in 2009, when Picard and his law firm Baker & Hostetler had been working on the Madoff case for less than a year, I observed that the firm had already been awarded total attorneys’ fees of $37.5 million with “no end in sight.” The fees paid to Picard and his firm come from SIPC, not from any recovery obtained by the trustee. More in Compliance Week [...]

Madoff victims trade on trustee’s gains and losses

After Bernard Madoff’s fraud unraveled in late 2008, Yale Fishman was courted by Wall Street traders seeking to buy his claim to assets that could be recovered from the mess. After three years of ignoring their calls, he finally said yes. Fishman, an estate planner in Woodmere, New York, and a former Madoff investor, cut a deal with a trading firm to sell part of his bankruptcy claim in the long-running case. He said he sold his $1.1 million claim for $800,000, or about 73 cents on the dollar, in late December. See Reuters report [...]

Instant Cash for MF Global Claims Is Proving Hard to Get

Some customers of failed MF Global Holdings Inc. are facing a new woe: An avenue that held out hope of a quick recovery has some potholes. Since the financial firm collapsed last year, most customers of the brokerage have received a chunk of their money—about 72% of the total missing—and have been awaiting word on the rest. For those seeking to put the debacle behind them quickly, one possibility has been to sell the right to their remaining recoveries to traders in exchange for a portion of their claim. More in the Wall Street Journal here.

NY Times does an about-face on Irving Picard…

There must be a rush on Snuggies in Hell this week, because the place has surely frozen over. Here’s the proof: A journalist from The New York Times has written something quite critical about Irving Picard, the trustee overseeing the Bernie Madoff bankruptcy case. In a column that appeared in Tuesday’s Dealbook, Andrew Ross Sorkin writes that Picard and his firm, Baker & Hostetler, have made out much better than Madoff’s actual victims. Read New York Daily News report [...]

How To Avoid Being A Victim Of Financial Fraud

Here are some issues to be aware of – and steps to take – to avoid becoming a target of financial fraud. Some of the worst cases of financial exploitation concern the elderly. More in Forbes here.

Who’s protecting investors from bailed-out bankers?

Watch out investors — the Securities and Exchange Commission has forgotten why it exists. You’re on your own. The latest proof? The SEC admitted it was doing nothing in the face of Lehman Brothers’ crisis-leading fraud. The Lehman bankruptcy examiner’s report maps out, at a minimum, Sarbanes-Oxley charges against CEO Dick Fuld and other key executives. Lehman was using an accounting gimmick to misstate its financial condition by some $50 billion. But the gun shy SEC isn’t willing to sue, fearing that even in today’s Wall Street executive-hating world a jury would vindicate Fuld by interpreting ’subjective’ accounting rules in his favor. See MSN Money report here.

FSI goes with ‘devil it knows’ in Finra oversight of advisers

An advocacy group that has been the most vocal in supporting Finra’s effort to expand its reach to include investment advisers isn’t saying that the devil made it do it. But a week before a House hearing on legislation that would pave the way for the Financial Industry Regulatory Authority Inc. to assume the adviser oversight role, the chairman of the Financial Services Institute Inc. tried to ease adviser qualms about Finra’s becoming its regulator by saying that it is best to be overseen by “the devil we know.” More in Investment News [...]