Former federal prosecutor expected to be named SEC enforcement chief

A former federal prosecutor, Andrew Ceresney, is set to take over as the new enforcement chief at the Securities and Exchange Commission, filling a key slot at a time of particularly high expectations for the agency. Ceresney has as reputation as a smart attorney who has been loyal to new SEC Chairman Mary Jo White for years. As a federal prosecutor, he played a major role on the big cases she handled when she was U.S. attorney for the Southern District of New York. When White left to join Debevoise & Plimpton a decade ago, he joined her there and became her right hand man, according to several people who know them both. More in the Washington Post [...]

In God We Trust: Following Madoff’s Money

On that cataclysmic day when Bernie Madoff was arrested, his loyal personal secretary Eleanor Squillari was convinced they had made a mistake. Life at the “lipstick building,” headquarters of the largest scale Ponzi scheme in financial history was wholesome and nurturing. They were family. But when she phoned Bernie to ask what gives, he was abrupt and perfunctory. And that’s when it hit her: this was for real. More in the Huffington Post [...]

Madoff Through His Secretary’s Eyes (Video)

The documentary “In God We Trust” follows the Bernie Madoff scandal through the eyes of his longtime personal secretary, Eleanor Squillari. The film will have its world premiere at the Tribeca Film Festival in New York on Friday, and Speakeasy has an exclusive clip of Squillari describing the firm’s mysterious 17th floor. “The day after Bernie’s arrest, I noticed that none of the employees from the 17th floor showed up for work that morning, and some never came back again,” Squillari says. She drew detailed floor plans for investigators, which are shown in the clip. “It turns out, Bernie had the entire place designed from scratch to his exact specifications,” Squillari says. A legit trading firm was on the 18th and 19th floors, filled with staff who held MBA degrees and came from other Wall Street firms — including Madoff’s own sons. More in the Wall Street Journal [...]

SEC’s Settlement With SAC Capital Draws Judicial Scrutiny

In another high-profile settlement, a federal judge again scrutinized the Securities and Exchange Commission’s willingness to settle charges with defendants without requiring the company to admit to any wrongdoing. A federal judge must determine whether a settlement is “fair, reasonable and adequate within the limitations Congress has imposed on the SEC to recover investor losses,” Federal District Court Judge Victor Marrerro wrote on Tuesday. “Courts should also weigh the effect of the proposed settlement in an SEC enforcement action on the public interest.” The judge found no fault with the $602 million settlement, which set a record for an insider trading case, between the SEC and SAC Capital Advisors, the hedge fund run by Steven Cohen. Read Forbes report [...]

Let’s Sue Wall Street: SEC’s Aguilar

In searching for a better way of policing Wall Street, SEC commissioner Luis Aguilar is onto something: Let investors sue their advisers the way they could sue their doctors for malpractice. Speaking before state securities regulators (NASAA) in Washington on April 16, Aguilar was not only critical of the industry’s sacrosanct rules that prevent investor lawsuits, but new SEC guidelines that could be much tougher in preventing fraud: More in Forbes [...]

MF Global’s Trader That Will Go To Prison – Brent Dooley

In a NY Times piece, Teresa Tritch wrote about Louis Freeh’s recently released investigative report of what went wrong when MF Global collapsed in October 2011 due a wayward trade strategy on European debt. At the firm’s helm was former Senator and Governor of NJ Jon Corzine who has not been heard from since (save a few congressional hearings where he said little). Freeh’s report summarized that Corzine “knew, or should have known” about weaknesses in the firm’s internal risk controls. Tritch wrote that the report suggests that “Mr. Corzine passive-aggressively let those weaknesses endure, because stronger controls would have put an end to his bigger-is-better trading strategy.” While Corzine was not criminally prosecuted, and most likely never will be, those loose internal controls that were tolerated within the company cost one young man years in prison … Evan Brent Dooley. More in Forbes [...]

Ex-MF Global Broker Sentenced to 5 Years for Rogue Trades

Former MF Global Inc. broker Evan Brent Dooley was sentenced to five years in prison for making unlawful unauthorized trades that caused the now-defunct futures firm to lose more than $141 million in 2008. The sentence, half of what the government sought, was imposed by U.S. District Judge Robert M. Dow in Chicago. Dooley, who pleaded guilty in December to two counts of violating speculative position limits under the Commodities Exchange Act, was also ordered to serve one year of supervised release and to pay $141 million in restitution. “I stand before you today broken, humbled, a deeply remorseful man,” Dooley told Dow in a choked voice before being sentenced yesterday. “I ask that you have mercy on me.” More on Bloomberg [...]

Bloomberg sues CFTC over cleared swaps margin rule

Data vendor Bloomberg L.P. filed a lawsuit on Tuesday against the top U.S. derivatives regulator to fight a new rule that would make the trading of swaps more expensive and hurt its business. Bloomberg is one of a dozen or so providers that plan to launch platforms on which to trade swaps, as regulators globally crack down on the $650 trillion market to prevent a repeat of the 2008 financial crisis. Under a rule by the Commodity Futures Trading Commission (CFTC), buyers and sellers of swaps must set aside enough money – so-called margin – to cope with the impact of a deal falling apart, assuming it takes five days to unwind the position. But for futures, a rival type of product, the assumption is that deals can be unwound in one day, making them far cheaper to use. More on Reuters [...]

U.S. Regulator To Fault JPMorgan Chase Over Bernie Madoff Dealings: Report

U.S. regulators plan to fault JPMorgan Chase & Co, which served as Bernie Madoff’s main bank for two decades, for failing to conduct adequate due diligence and report suspicious activity, according to a person familiar with the matter. The Office of the Comptroller of the Currency is expected to issue a cease-and-desist order against JPMorgan, which will require the largest U.S. bank to put an end to the alleged failures in its anti-money laundering practices. The timing of the order is uncertain but could come later this year, the source said. A fine is not expected. If the OCC is not satisfied with JPMorgan’s response, it can take harsher action against the bank, including financial penalties. More in the Huffington Post [...]

N.Y. Wins Right to Finish $410 Million Merkin Settlement

New York Attorney General Eric Schneiderman can 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, a judge ruled. Madoff brokerage liquidator Irving Picard, who seeks to collect $500 million from Merkin for a different set of the con man’s investors, tried block the deal. He waited too long to do so, only threatening to seek a halt, U.S. District Judge Jed Rakoff in Manhattan ruled today. He dismissed what he called Picard’s entire effort to “derail” the accord. “The trustee, however, having for more than three years issued empty threats to seek a halt to the attorney general’s suit, has lost his right to complain,” Rakoff wrote. “Even on the merits, moreover, his bluster proves to be without substance.” More on Bloomberg [...]