A recent SEC action shows you exactly how to NOT allocate trades. The SEC brought charges against Howard Berger for not allocating trades until the end of the trading day. Berger would routinely allocate the profitable trades to his wife’s account and the unprofitable trades to his private investment fund account. Since Berger would usually … Read more »
Category: Fraud
The Obnoxious LIBOR Emails
It seems clear that the LIBOR figures were subject to manipulation. Many banks are under investigation. The Royal Bank of Scotland agreed to pay $610 million in fines to UK and U.S. regulators for its role in the Libor rate-rigging scandal. As part of that settlement, the U.K.’s Financial Services Authority released emails and other … Read more »
Lance Armstrong – A Lying Liar Just Like Madoff
It’s tough to see a hero fall. I didn’t consider Lance Armstrong to be a hero for riding. But what he did for cancer survivors was remarkable. Until recently, cycling was filthy with doping. Take a look at the podium finishers for the Tour de France. Only two of the podium finishers in the Tour … Read more »
Another Real Estate Ponzi Scheme
The Securities and Exchange Commission is claiming that Wayne L. Palmer and his firm, National Note of Utah, were operating a real estate-based Ponzi scheme that bilked $100 million from investors. U.S. District Judge Bruce Jenkins issued a temporary restraining order, froze the assets of National Note, and appointed attorney Wayne Klein as a receiver … Read more »
Mortgage Fraud Rises in 2011
The Financial Crimes Enforcement Network released its full year 2011 update (.pdf) of mortgage loan fraud reported suspicious activity reports. It reveals a 31% increase in submission.It also shows some of the trends that lead to the 2008 financial crisis. Financial institutions submitted 92,028 MLF SARs in 2011, compared to 70,472 submitted in 2010. Financial … Read more »
Battling Back Against Spammers
The SEC posted a warning on Bogus E-Mail Purporting to be from SEC Office of the Whistleblower. The SEC’s Office of the Whistleblower is real; the e-mail is a hoax. Earlier this week I received an angry email complaining about spam sent by me. That left me a bit confused because I don’t send out … Read more »
Paperwork Dotted with Legal-Sounding Gibberish
Whenever you hear about a “prime bank” investment opportunity, walk away. A prime bank opportunity generally is described by the sponsor as an international investing program involving complex financial instruments that are too technical and complicated for non-experts to understand. If it’s too technical for you to invest why would you? – Astronomical returns are … Read more »
But the Computer Did It!
The Securities and Exchange Commission brought charges of securities fraud for concealing a significant error in the computer code of the quantitative investment model. I found this case to be interesting because it was not flawed human decisions, but flawed computer decisions. However, we still live in the age where computers do what we tell … Read more »
Was Full Tilt Poker a Ponzi Scheme?
The United States Government forced online poker sites to the fringes of the financial system. The U.S. government has long argued that online poker gambling is illegal under the Wire Act, a 1961 law that explicitly prohibits sports betting conducted over electronic communication. In 2006, Congress made it illegal for financial institutions to process funds … Read more »
Is Madoff a Sociopath?
The New York magazine interview with Bernie Madoff has finally been published. Steve Fishman spoke with Madoff on the phone (collect calls from Madoff’s prison) for several hours. And so, sitting alone with his therapist, in the prison khakis he irons himself, he seeks reassurance. “Everybody on the outside kept claiming I was a sociopath,” … Read more »