This month, as Bernard L. Madoff completes the third year of a 150-year sentence for masterminding his global Ponzi scheme, the top courts in the United States and Britain are both tackling issues that could have a multibillion-dollar impact on thousands of his victims. On June 21, the United States Supreme Court justices will confer on whether to take up the fiercely disputed issue of how victim losses in the Madoff scheme should be calculated. More in the New York Times [...]
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Here’s a quaint news item from 1987 about how a certain Ivan F. Boesky, one of the world’s most powerful speculators and symbol de jour of Wall Street greed, was sentenced to three years in prison for insider trading-related violations. It was one of the longest jail terms ever imposed in such a case and, apparently, a source of satisfaction to then-U.S. Attorney Rudolph Giuliani. Twenty-five years later, we have hedge fund bigwig Raj Rajaratnam setting a new record as he serves an 11-year sentence for similar misdeeds. Read Forbes report [...] U.S. Securities and Exchange Commission Chairman Mary Schapiro will sketch a regulatory roadmap to JPMorgan Chase & Co’s recent huge trading loss, but will stop short of discussing the specifics of her agency’s investigation with lawmakers on Tuesday. In testimony prepared for the House Financial Services Committee hearing, Schapiro lists relevant regulatory authorities ranging from rules against misleading investors to regulations that require public companies to clearly lay out their risks. Read Reuters report [...] Stanford Financial Group’s top investment executive, Laura Pendergest-Holt, is expected to plead guilty to obstruction of justice Thursday for her alleged role in a $7 billion Ponzi scheme that was among the largest frauds in U.S. history, a person familiar with the case said. A spokeswoman for the Justice Department declined comment. The expected plea by Ms. Pendergest-Holt, Stanford’s chief investment officer, follows the sentencing last week of convicted Ponzi schemer R. Allen Stanford to 110 years in prison. Read Wall Street Journal report [...] MF Global Holdings Ltd. (MFGLQ), the bankrupt parent of the brokerage, accrued $28.4 million in professional fees through May 31, including $13.4 million charged by trustee Louis Freeh and his firm, according to a U.S. Bankruptcy Court filing in Manhattan. More on Bloomberg [...] It didn’t take long for a federal jury to convict R. Allen Stanford of 13 counts of fraud in a $7 billion Ponzi scheme. Last week, the 62-year-old Texas financier was sentenced to 110 years in prison for a two-decade con that netted 30,000 victims in 113 countries. Even while being sentenced, Mr. Stanford maintained his innocence. He insisted that “in his heart” he did not author, control or profit from a Ponzi scheme. He’s entitled to his opinion, of course, but the federal jury has spoken and a judge gave him a sentence to match the scale of his crimes. More in the Pittsburgh Post-Gazette [...] Hadassah, the national Jewish women’s philanthropic organization, has sold its longtime Midtown headquarters as it undertakes an effort to reshape its image, sharpen its aim and recover from a costly entanglement with disgraced financier Bernard Madoff. About a year after a buyer approached the nonprofit, a deal closed earlier this month to sell the building known as Hadassah House, a nondescript property in a prime spot at 50 W. 58th St. More in the Wall Street Journal [...] Rakoff heard arguments on the Stern v. Marshall issue, but did not render a decision, nor did he indicate when he is likely to do so. As soon as we hear he does, we will communicate it to our [...] Without former U.S. District Judge Richard Holwell, there probably would not have been any prosecution of Rajat Gupta, the former Goldman Sachs director and McKinsey chief convicted Friday of insider trading and conspiracy. In 2010, Holwell ruled that prosecutors could use wiretap evidence in their case against Galleon Group hedge fund founder Raj Rajaratnam, rejecting defense arguments that the government is not authorized to use wiretaps to investigate insider trading. If prosecutors hadn’t been able to use those Rajaratnam wiretaps — in which Rajaratnam obliquely referred to tips from a Goldman insider — it’s unlikely the government would have gone to trial against Gupta, since the tapes were the only link between Gupta’s alleged tips and Rajaratnam’s trades. More on CNBC [...] The judge who will sentence former Goldman Sachs Group Inc. (GS) Director Rajat Gupta for insider trading has a track record of cutting the government’s recommended punishment in some cases by half or more. U.S. District Judge Jed Rakoff in Manhattan is to sentence Gupta, once a managing partner of McKinsey & Co., for tipping Galleon Group LLC co-founder Raj Rajaratnam. In September, the judge sentenced Winifred Jiau, a Stanford University-educated consultant convicted of corrupting friends and selling confidential information, to four years in prison, less than half of the maximum 10 years sought by federal prosecutors. More on Bloomberg [...] |
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