SEC Settles with Citigroup – Public Loses?

In today’s New York Times there is an article by Gretchen Morgenson discussing the failure of the Securities and Exchange Commission to bring charges against persons responsible for financial institution misconduct.  The issue is viewed in the context of a recent settlement. Earlier this month, the Securities and Exchange Commission announced an administrative settlement with […]

Justice Department, Department of Justice, civil settlement, toxic mortgages, Bank of America, BofA, Merrill Lynch, Countrywide Financial

News outlets are reporting that the U.S. Department of Justice and Bank of America are near agreement on a record civil settlement for actions arising out of the toxic mortgages, which significantly contributed to the financial crisis in the last decade.  Reports indicate that BofA will pay between $16 and $17 billion to settle investigations […]

SEC Chairman Annouces Aggressive Settlement Policy

SEC Chairman Mary Jo White has announced a new policy involving the Commission’s enforcement actions.  In some cases the the Enforcement staff will require defendants to admit wrongdoing as a condition of settling civil enforcement actions.  This is a significant change from the agency’s traditional approach of settling cases with neither the admission or denial […]

Circuit Court Blasts SEC While Ruling in Its Favor over Madoff Case

On April 10, 2013, the United States Court of Appeals for the Second Circuit upheld the lower court’s dismissal of a law suit brought by victims of convicted Ponzi schemer Bernard Madoff’s fraud.  Plaintiffs in the case of Molchatsky, et al., v. United States, alleged that the Securities and Exchange Commission was negligent in its […]

SEC Charges Illinois with Fraud

The Securities and Exchange Commission has charged the state of Illinois with securities fraud, obtaining a cease and desist settlement with the state for its failure to accurately portray the status of its pension fund to investors. This is the second state that the SEC has charged with fraud after having named New Jersey in […]

Executive Pleads Guilty in Mortgage Fraud Case

Raymond Bowman, former president of Taylor, Bean & Whitaker Mortgage Corp., pleaded guilty to charges in federal court in the Eastern District of Virginia stemming from a mortgage fraud that prosecutors characterized as a $1.9 billion scam. Bowman pleaded guilty to a count of conspiracy to commit wire fraud, bank fraud, and securities fraud. He […]

New Investigation of Hedge Fund

Today, The New York Times is reporting that Samir Barai and his hedge fund Barai Capital Management is under investigation for insider trading (http://dealbook.nytimes.com/2011/01/31/another-hedge-fund-linked-to-insider-trading-inquiry/?ref=business). The report says that the Federal Bureau of Investigation executed a search warrant at Barai Capital last November. The investigation is associated with a criminal complaint against Winifred Jiau. In December […]

Class Action Claims Up

A study prepared by Stanford Law School in conjunction with Cornerstone Research reports that class action filings in federal court rose 4.8% between 2009 and 2010. Interestingly, the report says that the greatest growth in filings are cases alleging disclosure violations in merger and acquisition transactions. These violations replaced traditional fraud cases, which experienced a […]

New York Federal Court Okays Wiretap Evidence in Insider Trading Prosecutions

In a series of insider trading prosecutions in federal court in New York judges have ruled that wiretap evidence is admissible. The cases have arisen from a three year investigation of the Galleon hedge fund. The best known of the prosecutions is the case against Raj Rajaratnam, founder of Galleon. he is scheduled to go […]

New York AG Sues Ernst and Young over Lehman Failure

The New York Attorney General last week filed suit against the international auditing firm Ernst and Young, alleging complicity in fraudulent accounting by Lehman Bros. prior to the collaps of that firm. The complaint alleges that the fraud allowed Lehman to hide its overly leverage balance sheet. The case revolves around the accounting treatment of […]