Here’s how the SEC is preparing for life after financial crisis

After sharing the post for nearly a year, Andrew Ceresney is now the sole enforcement chief at the Securities and Exchange Commission, overseeing more than 1,200 employees in the agency’s largest and most high-profile division. It’s not Ceresney’s first stint in the public sector. Early in his legal career, he was a federal prosecutor in Manhattan, working for then-U.S. Attorney Mary Jo White. When White left for private practice, Ceresney joined her at Debevoise & Plimpton in New York. More in the Washington Post [...]

Madoff IT Guys Wrote Code for Fakes to Trick SEC, Jury Told (2)

Bernard Madoff’s former computer programmers created a web of simple equations to make thousands of fake transaction numbers, dates and time stamps appear realistic on documents used to trick auditors, a jury was told in the trial of five of the con man’s former top aides. The men, Jerome O’Hara and George Perez, wrote dozens of “special” programs during audits by the U.S. Securities and Exchange Commission and HSBC Holdings Plc (HSBA), Richard Dietrich, a senior technician at International Business Machines Corp., testified yesterday in federal court in Manhattan. Prosecutors have said the programming wouldn’t have been necessary if real trading had taken place, and that the former employees knew it was fraudulent because they helped create it. More on Bloomberg BusinessWeek [...]

FINRA aims to ban deals that make clearing brokers’ records easier

Wall Street’s industry-funded watchdog will propose banning settlements in disputes between brokerages and investors that require investors to not oppose erasing details about complaints from brokers’ public records, its chief wrote in a letter to two U.S. senators released on Friday. Settlement agreements that provide additional compensation to investors who allege they lost money because of their brokers’ advice, in exchange for not trying to block the removal of black marks from their brokers’ records, could interfere with determining if a broker is entitled to such relief, wrote Richard Ketchum, chairman and chief executive of the Financial Industry Regulatory Authority. More on Reuters [...]

U.S. securities class-action suits rise, big Supreme Court case looms

Investors are pursuing more lawsuits accusing companies of fraud, according to a new study, but filings may plunge if the U.S. Supreme Court decides soon to remake the legal landscape. Plaintiffs filed 166 federal securities lawsuits seeking class-action status in 2013, up 9 percent from 152 in 2012, according to data released Tuesday by Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse.
More on Reuters [...]

Victims of Allen Stanford’s Ponzi scheme still suffering

Next month marks five years since the Securities and Exchange Commission sued one of the biggest Texas crooks of all time. Allen Stanford is serving a 110-year federal sentence for criminal activity related to his Ponzi scheme. But that’s little consolation for his victims. More on WFAA [...]

Madoff Victims Win Right to Direct Appeal Over Interest

Some of Bernard Madoff’s victims won permission to appeal directly to a federal appeals court a bankruptcy ruling barring them from using the length of time they invested with the con man to add interest to their claims. The victims “satisfied the criteria” for a direct appeal that skips over the district court, where bankruptcy appeals usually go first, the U.S. Court of Appeals in New York ruled yesterday. A hearing date wasn’t set. More on Bloomberg [...]

Madoff Ex-Aide Knew of Scheme to Pay His Son, Jury Told

Bernard Madoff added the son of a “key” executive to his payroll even though he didn’t work there, a jury was told in the trial of five ex-employees accused of aiding the con man’s $17 billion Ponzi scheme. Craig Kugel, who pleaded guilty in June 2012 to a tax scheme that gave salaries and benefits to people who weren’t Madoff employees, testified yesterday in federal court in Manhattan that the son of Daniel Bonventre, the firm’s operations chief, was listed as an employee so he could keep receiving company health insurance after graduating from college. More on Bloomberg BusinessWeek [...]

Corzine Loses Bid for Dismissal of CFTC’s MF Global Suit

Jon Corzine lost his bid for dismissal of the U.S. Commodity Futures Trade Commission’s lawsuit over the 2011 collapse of MF Global Holdings Ltd. The requests of Corzine and former MF Global Assistant Treasurer Edith O’Brien to throw out the case are “without merit,” U.S. District Judge Victor Marrero said in a ruling filed Jan. 17 in Manhattan federal court. More on Bloomberg [...]

Here’s why Madoff employees went along with his scam

It’s one of the more baffling elements of the Bernard L. Madoff saga. Why did so many employees of the disgraced money manager go along with the record-setting Ponzi scheme rather than blow the whistle on such a brazen financial felon? More in the Los Angeles Times [...]

Budget Deal Squeezes Securities Regulators

U.S. securities regulators may struggle to police wrongdoing as a result of budget cuts imposed by the $1 trillion spending plan that House and Senate lawmakers unveiled late Monday, including cuts to a fund used for technology programs, according to people familiar with the matter. The Securities and Exchange Commission would receive a modest overall increase in funding to $1.35 billion for the remainder of fiscal 2014, which ends Sept. 30, up from $1.32 billion in last year’s comparable period. Yet the agency would see its funding cut in key areas, including a 50% cut to a $50 million “reserve” fund established by the 2010 Dodd-Frank financial law and used to bolster the agency’s technology. More in the Wall Street Journal [...]