SEC to propose monumental crowdfunding rules on Wednesday

It was supposed to take 270 days. Instead, it has taken about twice that long. On Wednesday, though, federal regulators will come one step closer to allowing people to purchase equity in start-ups through new online “crowdfunding” marketplaces. The Securities and Exchange Commission plans to formally propose rules on Wednesday authorizing companies to widely sell securities through the online portals, the agency announced late Monday. Currently, firms can offer equity crowdfunding deals only to accredited investors. More in the Washington Post [...]

Madoff Scandal Still Haunts Victims

Four years ago, Suzanne Webel was looking forward to retirement. The Longmont, Colo., farmer had saved enough money to cover herself when she stopped working and help pay for her two children’s college education. She had never heard the name Bernard L. Madoff. Now, the 62-year-old Ms. Webel can’t afford fertilizer for her 80-acre farm, a necessity in the arid Colorado soil. The money she set aside for her kids is gone. And the name Madoff has become all too familiar. When Mr. Madoff’s Ponzi scheme was disclosed, the money she thought she saved over the years disappeared. More in the Wall Street Journal [...]

Madoff Had No Rules for Credit Card Use, Jury Told

Bernard Madoff was generous to his employees and didn’t have policies in place for corporate credit cards used by executives to pay for family vacations and thousands of dollars worth of wine, a jury was told. There wasn’t an obvious business purpose for many charges, including trips to Disney World and Las Vegas, that Madoff’s securities firm paid each month, Charlene White, whose job included running dozens of monthly reports and helping process company checks, told jurors yesterday in the trial of five former employees accused aiding Madoff’s $17 billion fraud. More on Bloomberg [...]

SEC looks to ease checks on crowdfunding investors

Small businesses raising money by selling shares over the Internet wouldn’t have to verify that their backers comply with individual investment limits under a U.S. regulatory proposal set for a vote as early as this week. The plan, scheduled for a Wednesday vote by the Securities and Exchange Commission, would allow such companies to use so-called equity crowdfunding without having to check that a person’s investment is a greater share of their income or net worth than allowed by law. More in the San Francisco Chronicle [...]

Potential Silver Lining for S.E.C. in the Cuban Case

No one likes to lose, so the Securities and Exchange Commission is surely smarting from a jury’s decision absolving Mark Cuban, the billionaire owner of the Dallas Mavericks, of insider trading charges. Although the case garnered headlines, it is unlikely to have much effect on other investigations, and even has a potential silver lining for the S.E.C. The case revolved around whether Mr. Cuban agreed not to trade on information about an impending transaction at Mamma.Com, an Internet search engine company in which he held a 6.3 percent stake. After speaking with the company’s chief executive, Guy Fauré, about the company’s decision to sell shares that would hurt its price, he unloaded his stock and avoided about $750,000 in losses. More in the New York Times [...]

Madoff Offices Not Secured for Five Days, FBI Agent Says

The FBI agent who arrested Bernard Madoff the morning of Dec. 11, 2008, told a New York jury the agency didn’t secure or “quarantine” any portion of the con man’s offices until about five days later. When the FBI changed the locks and installed security cameras on the 17th floor of the lipstick-shaped skyscraper in Midtown Manhattan where the business operated, the same measures weren’t taken with the two other floors Madoff used, Special Agent Theodore Cacioppi told the jury in the trial of five former Madoff employees accused of assisting in the fraud in which investors lost $17 billion in principal. More on Bloomberg [...]

Madoff Brothers, Kohn Cleared in Lawsuit Over Losses in Europe

Former Bank Medici AG chairwoman Sonja Kohn and previous directors of Bernard Madoff’s European operations don’t owe anything to the liquidators seeking to recoup losses to repay the convicted conman’s victims. Judge Andrew Popplewell dismissed a lawsuit today filed by liquidators of Madoff Securities International Ltd., based in London. They were seeking to recover about $50 million, including payments for a luxury yacht and an Aston Martin sports car. More on Bloomberg BusinessWeek [...]

Ex-employees: Madoff and aide ran scam alone

Lawyers for five ex-employees of Bernard Madoff opened their defense case Thursday by symbolically trying to give the infamous Ponzi scheme mastermind the trial he never got before pleading guilty and going to prison. Responding to prosecution arguments that Madoff alone couldn’t have kept the multibillion-dollar scam running for decades, the attorneys portrayed him as a charismatic pathological liar who duped fellow Wall Street titans, government regulators and thousands of investors. More in USA Today [...]

Judge Rakoff Rules on Remaining Motions

In his order, Judge Rakoff denies the defendants’ motion to dismiss and returns the case to the Bankruptcy Court. To view the full ruling, click [...]

Ex-Madoff Employees Helped Conceal Fraud, Prosecutor Says

Five former employees of Bernard L. Madoff helped conceal his $17 billion Ponzi scheme by making fake documents to trick customers and regulators for decades, a federal prosecutor told a jury. The defendants created millions of false account statements and elaborate trading records to mislead anyone who came in contact with the company, and became rich in the process, Assistant U.S. Attorney Matthew Schwartz said today in his opening statement at the trial in federal court in New York. More on Bloomberg [...]