Schapiro SEC Reign Nears End With Rescue Mission Not Done

What Mary Schapiro considered her most important task had just run aground, a symbol of the aspirations and missed opportunities of her tenure as head of the U.S. Securities and Exchange Commission. Schapiro worked for two years on a plan to head off what she calls the “terrifying” prospect of a run on money-market mutual funds like one that forced a U.S. rescue in 2008. After fellow commissioners refused to follow her lead, she teared up as she worked on a statement accusing opponents of having their heads “in the sand,” two people involved in the process said. It’s not surprising that Schapiro’s frustrations boiled over that August evening. She has told friends that the late nights and almost constant policy battles have left her exhausted and eager to depart after the November election. More on Bloomberg Businessweek [...]

Garage to open season with ‘Imagining Madoff’

The Chicago Tribune
Garage to open season with ‘Imagining Madoff’
Teaneck – Garage Theatre Group opens its 20th season of professional theatre in New Jersey with Imagining Madoff, award-winning playwright Deb Margolin’s vivid and controversial 90-minute play about Ponzi scheme mastermind, Bernard Madoff. The Puffin Foundation, Ltd. is a Partner in the Arts with the Garage Theatre Group in presenting this play. The Garage Theatre Group opens its season with Deb Margolin’s ‘Imagining Madoff.’ Michael Bias, at left, and Thom Molyneaux work on a scene at the Becton Theatre on the campus of Fairleigh Dickinson University in Teaneck. In it, Madoff is telling the “real” story of the scheme that devastated thousands of lives while his secretary is testifying to the facts before the Security and Exchange Commission. Much of Madoff’s story revolves around an evening spent with Solomon Galkin, an 80-year-old holocaust survivor, poet, translator, and treasurer of a shul whose funds Madoff controls. More on [...]

Top SEC official proposes program to check repeat offenders

(Reuters) – The U.S. Securities and Exchange Commission should consider creating a program to monitor fraudsters who repeatedly break the law, one of the regulator’s top officials said on Thursday. SEC Commissioner Luis Aguilar, a Democrat, proposed that a potential program for recidivists could entail home and office visits, and giving regulators access to phone, bank and tax records.
“Many offenders, particularly Ponzi scheme offenders, have long track records,” Aguilar said in a speech at the Securities Enforcement Forum in Washington. “That tells me that the first time many of these defendants were prosecuted, the remedies and penalties did not effectively deter them from engaging in egregious fraud again.” Read more on Reuters [...]

Investigators launch new round of MF Global exec interviews

U.S. authorities investigating the collapse of MF Global have called in former executives of the failed commodities brokerage in recent weeks for additional interviews, people familiar with the inquiry said, as regulators work towards filing civil charges.The new interviews follow a meeting prosecutors and regulators had last month with the firm’s former chief executive, Jon Corzine, and suggest investigators have new information they want to ask other officials about. The new push comes close to the one-year anniversary of the firm’s spectacular collapse, which left an estimated $1.6 billion in customer funds missing. Read more in the Chicago Tribune [...]

Stanford criminal fraud trial starts

Two Stanford Financial Group Co. accountants actively assisted R. Allen Stanford in perpetrating a $7 billion investor fraud, a prosecutor alleged at the start of the last criminal trial tied to the Ponzi scheme. Chief Accounting Officer Gilbert Lopez, 70, and Global Controller Mark Kuhrt, 40, face 10 counts of wire fraud and one count of conspiracy to commit wire fraud, which could send them to prison for more than 20 years if convicted. The men pleaded not guilty after they were indicted with Stanford in June 2009. “This trial is about two high-level corporate accountants who knew about the biggest part of the fraud and actively worked behind the scenes for years to cover it up,” Jeffrey Goldberg, a prosecutor from the U.S. Justice Department, told a federal jury today in Houston.
More in the Clarion Ledger [...]

Ponzi scheme, bankruptcy collide in Sacramento courts

Vincent Thakur Singh, who is charged in Sacramento federal court with fraud, lying in court papers and bribery, allegedly fleeced members of the ethnic Indian Fijian community for $20 million and then declared bankruptcy. An indictment returned two weeks ago and unsealed Tuesday says Singh targeted 190 members of that community in what is known as an “affinity scheme” – that is, a rip-off focused on a particular ethnic, national, racial or religious group to which the perpetrator belongs. “Affinity schemes take advantage of bonds of trust and affection that can exist among members of the targeted group,” the indictment says.
Singh, who formerly lived in Elk Grove, was arrested late Monday in Caldwell, Idaho. The timing of his first court appearance in Sacramento will depend on how long it takes the U.S. Marshals Service to transport him. More in the Sacramento Bee [...]

Stanford’s Accountants Accused of Hiding Ponzi Scheme

Two accountants accused of helping R. Allen Stanford swindle investors in a $7 billion Ponzi scheme are set to begin the last criminal trial stemming from the plot with opening statements in federal court in Houston. Stanford Financial Group Co. Chief Accounting Officer Gilbert Lopez, 70, and Global Controller Mark Kuhrt, 40, face 10 counts of wire fraud and one count of conspiracy to commit wire fraud, which could send them to prison for more than 20 years if convicted by a jury. The men pleaded not guilty when they were indicted with the Texas financier in June 2009. “Kuhrt and Lopez fabricated the financial statements that enabled Stanford to lie to investors about the circumstances surrounding their investments,” Robert Khuzami, enforcement director for the U.S. Securities and Exchange Commission, said in a statement the day the men were indicted. More on Bloomberg [...]

Here’s How The SEC Is Failing Individual Investors

We have passed an important milestone coming out of the financial crisis, though its watershed status has received surprisingly little notice. That milestone is the first significant test of how regulators (in this case, the SEC) approach individual investor protections in the post-crisis era. Several weeks ago, SEC Chairman Mary Schapiro failed to muster the needed votes from the SEC Commissioners to take the next step in increasing the safety of money funds. Note: this was not a final vote to enact new regulations, but simply a vote to put the proposal out for public comment. (!!) But she couldn’t get the votes for even that. More on Business Insider [...]

California Real Estate Ponzi Ends With Federal Criminal Guilty Plea

On July 10, 2012, Celia Gallardo, 42, North Hills, CA was indicted on nine counts of wire fraud and seven counts of mail fraud by a federal grand jury in the Central District of California. Gallardo, a San Fernando Valley real estate agent who held herself out as a real estate investor was charged with running a million-dollar Ponzi scheme from September 2007 through September 2008 that victimized dozens of investors through a bogus real estate investment program. Gallardo told the investors that she would purchase condominiums and that these properties would quickly yield high rates of return: a 100 percent in only 30 days. Read more on Forbes [...]

New IRS rules may aid Ponzi clawback victims

If you’re among those who have been crying in your beer over your losses from Bernie Madoff or another Ponzi scheme, the IRS may have coughed up some relief. Amid cries from attorneys and the U.S. Government Accountability Office, the IRS on Sept. 5 issued some favorable guidance on the treatment of clawbacks for tax purposes. More in the Palm Beach Daily News [...]