Once More Through the Revolving Door for Justice’s Breuer

Coming off a grueling four-year stint at the Justice Department, Lanny A. Breuer is poised to make a soft landing in the private sector. Covington & Burling, a prominent law firm, plans to announce on Thursday that Mr. Breuer will be its vice chairman. The firm created the role especially for Mr. Breuer, a Washington insider who most recently led the Justice Department’s investigation into the financial crisis. For Mr. Breuer, who will now shift to defending large corporations, Covington is familiar turf. He previously spent nearly two decades there. More in the New York Times [...]

Madoff Trustee, New York Battle Over Settlement

A federal judge suggested that investors in Bernard Madoff feeder funds may be entitled to no payouts as he considers a dispute between the bankruptcy trustee for the Madoff estate and the New York State attorney general. The trustee, Irving Picard, has moved to block New York’s $410 million settlement with J. Ezra Merkin, who ran three Madoff feeder funds. Picard himself is seeking $500 million from Merkin and complains that the New York deal is an “end run” around bankruptcy law. New York Attorney General Eric Schneiderman says that Picard has no claim to the settlement money and no power to stop him. And his lawyer told U.S. District Judge Jed Rakoff that, if Picard is successful, Merkin’s investors, who lost more than $1.2 billion, will be left with nothing. More in FinAlternatives [...]

To Avoid the Biggest Investing Mistake, Stay Strong

IF you have been awake for the last five years, your investing experience has probably been anything but smooth. Scary markets like the one that bottomed out in March 2009 often cause us to do crazy things. This craziness may be temporary, but it doesn’t take long to make what I call the big mistake: ditching your well-designed investing plan to either buy high or sell low. Believe me, I understand. After watching the markets for a long time, I think the market of 2008-9 was the scariest one I have lived through. A lot of us were so scared we went looking for alternatives to our disciplined investing strategy — and in hindsight, that was a terrible mistake. Hindsight is the crucial word in the previous sentence. If you bailed on your investing plan in early 2009, by now it has become painfully obvious that it was a bad idea. By almost any measure, the market has more than doubled since those dark days. More in the New York Times [...]

How to Spot a Ponzi Scheme

In the wake of the discovery of Bernie Madoff’s longest-running Ponzi scheme that stole millions of dollars over several years, the Securities and Exchange Commission pledged to crack down on the scams, but consumers are still losing money to crooked money managers. “Whether the Ponzi scheme is for $10 million or $100 million, it’s continuing to happen simply because someone knew the schemer,” says Chuck Malkus, author of The Ultimate Ponzi: The Scott Rothstein Story. “In most cases it’s an affinity crime where the victim was referred by someone at their church, synagogue or charitable organization.” Fraudsters don’t just target the super rich; they also prey on people with sizeable savings put aside for investing or retirement and pledge to multiply the funds in a short amount of time. While the promise is enticing, you need to learn the red flags of a possible Ponzi scheme to protect your hard-earned money. More on Fox Business News [...]

New York Seeks Approval to Finish Merkin Settlement

New York Attorney General Eric Schneiderman asked a federal judge to let the state go forward with a $410 million settlement with J. Ezra Merkin, using his law enforcement powers to compensate Merkin investors whose money was lost in Bernard Madoff’s Ponzi scheme. Madoff brokerage liquidator Irving Picard, who seeks to collect $500 million from Merkin for people who invested directly with Madoff, is trying to block the deal. Schneiderman has argued that Picard has no claim to the settlement money and lacks power as a bankruptcy trustee to stop the state from enforcing the people’s legal rights.
Read Bloomberg report [...]

Lawyers battle over Madoff-related settlement

A battle between New York Attorney General Eric Schneiderman and Irving Picard, the trustee for victims of Bernard Madoff’s Ponzi scheme, is coming to a head. On Monday, lawyers for the two sides traded barbs in court over a $410 million settlement between Schneiderman and Ezra Merkin, a money manager accused of “recklessly” feeding $2.4 billion of client money to Madoff. Picard is trying to block the settlement, claiming Madoff customers have first crack at Merkin’s assets. David Ellenhorn, senior counsel at the attorney general’s office, said Picard threatened to sue in 2009 over the state’s claims against Merkin but never took action. More on Reuters [...]

Madoff to FOX Business: ‘The Banks Knew’

Jailed Ponzi schemer Bernard Madoff plans to amplify his contention, possibly in testimony before Congress, that the big banks he did business with – J.P. Morgan Chase (JPM), Bank of New York Mellon (BK), Citigroup (C) and HSBC Group (HBC), among others – knew what he was up to. The banks have repeatedly and vehemently denied this contention. But in an e-mail to FOX Business reporter Adam Shapiro received Tuesday, Madoff said he plans to offer specific information to Congressional committees investigating both his crimes and possible complicity on the part of Madoff’s banking partners. More on Fox Business News [...]

Prosecutors examining JPMorgan’s actions in Madoff fraud case: NYT

U.S. prosecutors are examining whether JPMorgan Chase & Co (JPM.N) fully alerted authorities to suspicions about fraudster Bernard Madoff, the New York Times reported, citing several people with direct knowledge of the matter. The prosecutors suspect JPMorgan may have violated a federal law that requires banks to alert authorities to suspicious transactions, the newspaper reported. “We believe that the personnel who dealt with the Madoff issue acted in good faith in seeking to comply with all anti-money laundering and regulatory obligations,” JPMorgan spokesman Joe Evangelisti told the newspaper. More on Reuters [...]

Securities class actions vs life sciences companies soar: report

In a year when the total of fraud class actions filed against companies fell overall in the United States, the number filed against publicly traded life sciences companies rose dramatically, according to a new report by law firm Dechert. Last year 27 different pharmaceutical, biotechnology and medical companies were sued 28 times for alleged securities fraud, up from 17 lawsuits in 2011. That represents roughly one-fifth of all securities lawsuits, the highest percentage since Dechert first issued its report in 2004, said partner David Kotler. Kotler authored the survey, which focuses on securities class actions against life sciences companies, a sector in which Dechert has a number of clients it represents in securities and fraud litigation. More on Reuters [...]

Judge to OK $80 mln settlement with Madoff feeder fund

A federal judge said he intends to give final approval to a class action settlement of potentially more than $80 million benefiting investors in funds managed by Fairfield Greenwich Group, which funneled money to the now imprisoned swindler Bernard Madoff. U.S. District Judge Victor Marrero in Manhattan said at a Friday hearing that while the amount was “modest” compared to the more than $1 billion that Fairfield investors lost, it was fair because the accord was largely being funded by its founders’ assets. “In all circumstances, the plaintiffs have met the burdens to show the settlement is fair and reasonable,” Marrero said.
More on Reuters [...]