Securities: October 2006 Archives

Woman In Florida Charged With Securities Fraud

A women from North Naples, Florida is being charged with numerous felonies because of an investment fraud scheme which resulted in over $180,000 USD in losses to nearly ten investors. Lorraine Adele Afshari was arrested when investigators discovered that her company, Tuscany Mortgages and Investments was merely a front company for an illegal Ponzi scheme. These types of schemes usually begin with the promise of high short-term returns to lure new investors. These high returns are only an enigma, as there is not a legitimate business to support them. Afshai, if conviced, faces a maximum of five years in prison for each of her 34 charges. She is being held in jail pending bond payment.

Continue reading, "Woman Accused of Bilking Investors Out of $180,000 in Ponzi Scheme

Posted by Ryan Jardine at 10:24 PM | Permalink | Comments (0) | TrackBacks (0)

PowerSource Excecutive Sentenced in Securities Fraud

A man in Newport Beach, California was sentenced early this week for his lead role in an investment scam. Illya Bond stole more than $2.4 million USD from over 100 people. Bond, as an executive with PowerSource Corp., tricked investors through means such as e-mail, web sites and telemarketing calls to invest in limited liability partnerships to help finance PowerSource. Bond was sentenced to jail time and was required to pay over $2.4 million in restitution.

Continue reading, "Newport Beach Man Gets 8 Years in Investment Scam"

Posted by Ryan Jardine at 10:20 PM | Permalink | Comments (0) | TrackBacks (0)

Avoiding Securities Fraud Through Investor Education

The B. C. and Ontario securities commission have developed a couple of online tools in order to help investors learn to avoid securities fraud. Two online sites have different tools to help inexperienced and expert investors to develop critical thinking skills when analyzing investments. The two sites are www.investright.org and www.checkbeforeyouinvest.ca. These each include helpful resources to use when evaluating securities fraud.

Posted by Ryan Jardine at 06:54 AM | Permalink | Comments (0) | TrackBacks (0)

JP Morgan Gets SEC Inquiry Letter

JP Morgan Chase & Co. says that one of its mutual funds has received a letter from the U.S. Securities and Exchange Commission as a part of its probe into whether kickbacks were paid to fund administrators. JP Morgan, the third largest U.S. bank, is the largest yet to be contacted by the SEC as a part of a probe into whether mutual fund management groups took improper payments from outside contractors hired to handle fund marketing and other administrative details for them.

JP Morgan Chase Mutual Fund Gets SEC Inquiry Letter

The inquiry into JP Morgan will look at whether services provided to Bank One Corp. by Bisys Fund Services were illegal. A unit of Bisys agreed recently to pay $21.4 million to settle SEC fraud charges that it had conducted improper payment deals.

Posted by Patricia Bowling at 12:25 PM | Permalink | Comments (0) | TrackBacks (0)

Monster Founder Resigns from Board

Andrew McKelvey, founder of Monster Worldwide Inc., the parent company of the leading job search website, has resigned from the board of directors after refusing to be interviewed for the company's internal stock option investigation. McKelvey is the company's largest individual shareholder. Mary Ann Jorgenson, an attorney specializing in boardroom matters, says that McKelvey's exit was his only option. "In this case, when you have a board member who is going to refuse to talk, his only responsible choice really is to resign. I understand that he has legal issues, but the world, the market, would certainly consider it a negative situation for him to remain as a director," she said.

Monster founder quits in options dispute

More than 140 companies currently have internal investigations under way or are under federal investigation over the possible manipulation of stock option dates. McKelvey's attorney said that McKelvey misunderstood questions he was asked about possible backdating over the summer. William Pastore has been named CEO of Monster after McKelvey's resignation.

Posted by Patricia Bowling at 12:10 PM | Permalink | Comments (0) | TrackBacks (0)

Ex-Delphi Execs Face SEC Claims

The Securities and Exchange Commision has approved the filing of civil fraud claims against the former chairman and chief executive of Delphi Corp and against its former chief financial officer for accounting improprieties. The commission voted to approve a settlement with Delphi in which Delphi would settle allegations of accounting improprieties that led to several years' restated earnings. Delphi Corp. is an auto-parts manufacturer. Deplhi currently is under bankruptcy protection.

Ex-Delphi execs seen facing SEC claims

Delphi's former chairman and chief executive J.T. Battenberg III is expected to fight the charges. Former CFO Alan Dawes is expected to face the claims and agree to a settlement. The SEC is expected to file civil claims against several more former executives in addition to the charges already filed.

Posted by Patricia Bowling at 10:30 PM | Permalink | Comments (0) | TrackBacks (0)

Investor Protection Trust - Investment Booklet

An article in the Los Angeles Times encourages not only high school students, but also adults to take advantage of a publication on smart investing published by a non-profit organization known as Investor Protection Trust. “The Basics of Saving and Investing: Investor Education 2020” is primarily designed for high school students but is useful to all ages as it provides information on financial issues such as budgeting, balancing a checkbook, how to use credit cards, and wise investing. According to the CEO of Investor Protection Trust the booklet addresses “one thing and one thing only: investor education.”

Posted by Ryan Jardine at 04:16 PM | Permalink | Comments (0) | TrackBacks (0)

Closing Statements to Begin in Securities Fraud Trail

CBS MarketWatch reports that closing statements have started in the trial of David Finnerty, a NYSE stock trader, who is charged with illegal trading and securities fraud. Finnerty’s illegal activity resulted in over $4.5 million dollars in unlawful profits for his firm, and hundreds of thousands of dollars in illegitimate bonuses. He could be sentenced to a maximum of 20 years in prison. According to the Assistant U.S. Attorney, “It is indeed troubling that a man entrusted with the New York Stock Exchange’s flagship stock would abuse that trust for his own personal profit.

Posted by Ryan Jardine at 06:02 AM | Permalink | Comments (0) | TrackBacks (0)

SEC Charges Two Men With Investment Fraud

According to the Orange County Register, the Securities and Exchange Commission (SEC) has charged two men with defrauding investors out of millions of dollars. Kansan Kim and Hyun Soo Jang used front companies to lure investors and then stole their money to fund personal and business expenses. Kim and Jang ended up victimizing over 40 investors. The SEC has charged Jang and Kim with false advertising and dishonest business practices.

Posted by Ryan Jardine at 05:57 AM | Permalink | Comments (0) | TrackBacks (0)

Ex-Executive Admits Cheating Millions

Peter Lombardi, the former president of Mutual Benefits, admitted to defrauding investors out of almost $1 billion. Mutual Benefits was based out of Fort Lauderdale and was shut down in 2004. The company purchased life insurance policies from terminally ill and elderly people for less than face value and then sold the anticipated payouts to investors.

Ex-executive admits cheating millions in securities fraud

Deals like this, known as viaticals and life settlement contracts, are profitable if the insured person dies within a particular period of time. Prosecutors say that Lombardi cheated investors by using false projections of how long it would take for the insured people to die. Investors were promised returns of up to 72%, but because the life expectancy estimates ended up being too low, thousands of people ended up losing their life savings. "Most investors never realized any profit and have not been able to get their investments back," said Andrew Levy, lead prosecutor.

Posted by Patricia Bowling at 12:15 AM | Permalink | Comments (0) | TrackBacks (0)

Ex-Refco CFO Indicted for Fraud

Robert Trosten, the former Refco CEO, is accused of hiding millions of dollars in debt from investigators and auditors. Refco is a now bankrupt brokerage. Trosten faces charges of conspiracy, securities fraud, and wire fraud, says the U.S. Attorney's Office in Manhattan.

Ex-Refco CFO indicted for fraud

Trosten and a former chief executive of Refo, Phillip Bennett, are accused of defrauding purchasers of $600 million in notes issued by Refco in 2004.

Posted by Patricia Bowling at 11:51 PM | Permalink | Comments (0) | TrackBacks (0)

Identy Theft Addressed by Securities Experts

According to the Toronto Star, the Investment Dealers Association of Canada plans on meeting with securities expert in November to address the growing prevelance of identity theft. They are especially interested in addressing the losses that result from scams that target online trading accounts. This comes as ETrade Financial Corp. announced it spent $18 million USD on fraud in the most recent quarter.

Posted by Ryan Jardine at 11:18 PM | Permalink | Comments (0) | TrackBacks (0)

Hackers Prey on Online Stock Trades

Hackers across the country are finding ways to break into large online brokerages and making unauthorized trades worth millions of dollars. Federal authorities are investigating the practice and say that hackers use customers' funds to buy certain stocks, trying to drive up share prices in order to sell the stock at a profit.

Hackers said to prey on online stock trades

Over 10 million people in the U.S. buy and sell investments online, according to securities analyst Aviviah Litan on Gartner Inc. Because broker accounts are not protected by federal banking rules that ensure customers get their money back, the customers who fall victim to hackers must rely on the company to cover any losses.

Posted by Patricia Bowling at 02:38 PM | Permalink | Comments (0) | TrackBacks (0)

Ex-Comverse CEO Pleads Guilty

David Kreinberg, the former chief financial officer of Comverse Technology Inc., plead guilty to one count of conspiracy and one count of securities fraud. Kreinberg is the first executive to plead guilty in the investigation of stock options practices in corporate America. "I knew at the time that my actions and agreements with others at the company to act as I have were wrong," Kreinberg told a judge.

Ex-Comverse CFO cops to stock options scheme

Prosecutors said that Kreinberg and several others engaged in an options scheme that allowed them to gain millions of dollars in profits by changing the grant dates of stock option awards. Kreinberg has signed a cooperation agreement with federal prosecutors that will carry punishments of 15 years in prison and restitution of $51 million.

Posted by Patricia Bowling at 02:18 PM | Permalink | Comments (0) | TrackBacks (0)

Drakulich Convicted of Investment Fraud

According to the IndyStar.com, Richard Drakulich was convicted of investment fraud and conspiracy to sell unregistered securities. A government prosecutor said that this man “preyed upon … seniors’ retirement and sold them so called securities literally not worth the paper upon which they were written.” Unfortunately Drakulich and his partners victimized almost 20 seniors before they were convicted.

Posted by Ryan Jardine at 09:58 AM | Permalink | Comments (0) | TrackBacks (0)

Death Benefits Company Shareholder Guilty of Securities Fraud

According to the Associated Press, Peter Lombardi, the only shareholder in a death benefits company, has plead guilty to securities fraud. He admitted to stealing $956 million USD from investors through a sales scheme centered around viatical settlements. These are settlements where investors buy life insurance policies from sick and dying individuals and collect the insurance after their death. According to a Special Agent with the FBI, “Peter Lombardi and other MBC executives preyed on investors’ compassion for others while they sought only personal gain.”

Posted by Ryan Jardine at 10:12 PM | Permalink | Comments (0) | TrackBacks (0)

Two Plead Guilty for Stealing Coke's Secrets

Two men who planned to steal Coca-Cola's trade secrets and sell them to rival Pepsi for $1.5 million dollars were charged with unlawfully replicating and transmitting trade secrets and receiving and possessing trade secrets. The two men were not Coca-Cola employees, but they planned to get the information from an acquaintance who was an employee of Coca-Cola; she remains free on bond and has a pending trial.

Two plead guilty to stealing Coca-Cola secrets

Ibrahim Dimson and Edmund Duhaney were the two men sentenced today. Coke employee Joya Williams awaits trial. The plan was for Williams to "copy and/or remove the company's trade secret documents and remove samples of products that were in development" and give them to Duhaney and Dimson who would turn the documents over to Pepsi. The three then planned to split the profits.

Posted by Patricia Bowling at 09:28 PM | Permalink | Comments (0) | TrackBacks (0)

Comverse Exec. Faces Additional Charges

According to a report by Shay Niv, additional charges have been levied against the former CEO of Comverse Technology Inc, Kobi Alexander. About two weeks ago, U.S. prosecutors charged Alexander with bribery and disrupting a federal investigation. Now, in addition to the previous charges, he is being accused of attempted bribery, disrupting a federal investigation and securities fraud. He allegedly attempted to bribe another senior Comverse executive to confess to Alexander’s previous charges. Comverse is an international communications and technology firm.

Posted by Ryan Jardine at 05:21 AM | Permalink | Comments (0) | TrackBacks (0)

Buffett Speaks about Wall Street Scandals

Warren Buffett has a message for the managers of companies caught up in the corporate scandals plaguing Wall Street. Buffett has a reputation for not being shy about speaking about corporate governance issues. He says many of the people involved in the options backdating scandal likely began the practice when they saw others on Wall Street backdating. Buffett said of backdating: "Let's start with what is legal, but always go on to what we would feel comfortable about being printed on the front page of our local paper, and never proceed forward simply on the basis of the fact that other people are doing it."

Buffett sounds off on Wall Street scandals

Buffett also said that the company will jump on anything that has the "slightest odor of impropriety."

Posted by Patricia Bowling at 11:21 PM | Permalink | Comments (0) | TrackBacks (0)

Beware Mortgages

While mortgage rates have been on a downward trend, those who signed up for lower adjustable rate mortgages in the past few years likely will not benefit. An ARM charges an initial discounted rate for a certain period of time, before they then adjust to market levels. Though some ARMs attract consumers with initial rates of 2% or less, the rates typically rise to 6-9%. The large jump means a doubling in monthly payments.

Tick. Tick. Beware the mortgage time-bomb

Jumps in payments may be larger for some people and there also may be a "trigger ceiling," which can result in even higher payments. "I'd call this an obscene loan," said Mari Adam, a certified financial planner. Choosing the correct ARM is important to avoid ridiculous payments in the long term.

Posted by Patricia Bowling at 10:40 PM | Permalink | Comments (0) | TrackBacks (0)

Legg Mason Accused of Securities Fraud

According to a Dow Jones Newswire, Robert Garber, an investor, is seeking to file a class action lawsuit against Legg Mason Inc, the fifth largest money manager in the U.S. The claim purports that Legg Mason deceived investors about growth and performance figures. Garber believes that if Legg Mason had been forthright and told investors that “the market prices had been artificially and falsely inflated by defendants’ misleading statements,” they would not have invested.

Posted by Ryan Jardine at 10:11 PM | Permalink | Comments (0) | TrackBacks (0)

Dunn Says Charges "Misinformation"

Patricia Dunn says that former Hewlett-Packard Co. board member Thomas Perkins forced the move to remove Patricia Dunn in response to a probe she led to stop board level leaks. In a "60 Minutes" television interview which aired Sunday, Dunn said that "It was a disinformation, a classic disinformation campaign," Dunn said in an interview with CBS Corp.'s (Charts) "60 Minutes" program. "He [Perkins] set the mind-set for basically everything that's believed about this right now," she said.

Ex-HP chairman calls charges 'misinformation'

Dunn said that most of HP's board told her to look into the leak, but she denied that she had any involvement in passing personal information such as home phone numbers for board members to internal company investigators. Dunn said that Perkins began to target her after the investigation identified Jay Keyworth as the source of leaks earlier in the year. When Dunn was asked if Perkins was "out to get her," Dunn responded that "he wanted me off the board. This was to get me off the board. I don't know if he ever thought through the consequences that would go beyond my getting off the board."

Posted by Patricia Bowling at 05:43 PM | Permalink | Comments (0) | TrackBacks (0)

Morgan Stanley May Buy Stake in Hedge Fund

A hedge fund specializing in distressed debt, Avenue Capital Group, is in advanced talks to sell about 20% of itself to the asset-management arm of investment bank Morgan Stanley. The deal gives Avenue a value of $1.5 billion to $2 billion. If the deal goes through, Avenue would be the latest hedge fund to sell part of itself to an investment back; the trend shows how small investment firms are becoming institutions with Wall Street backing.

Morgan Stanley may buy stake in hedge fund

Hedge funds can buy and sell a wide range of securities and have grown in popularity over the last few years. Morgan Stanley is not the first to try such a venture; J.P. Morgan bought a majority stake in Highbridge Capital Management two years ago.

Posted by Patricia Bowling at 03:50 PM | Permalink | Comments (0) | TrackBacks (0)

78 Charged with Bankruptcy Fraud

Bankruptcy charges have been filed against 78 people in an attempt to protect the integrity of the nation's bankruptcy system. The Justice Department and the FBI announced the charges against nine lawyers, two bankruptcy petition preparers, and a former police officer October 18. The cases allege concealment of more than $3 million in assets, use of false identities and forged documents, and fraudulent receipt of government loans and benefits. "Bankruptcy fraud is often the tip of the criminal iceberg, and that makes these prosecutions so important," said Deputy Attorney General Paul McNulty.

McNulty added that bankruptcy filings are often the last step in criminal acts that include mortgage fraud, bank fraud, mail fraud, money laundering, and defrauding of government programs. The ending of "Operation Truth or Consequences" coincides with the anniversary of new bankruptcy laws aimed at discouraging fraud.

Posted by Patricia Bowling at 03:27 PM | Permalink | Comments (0) | TrackBacks (0)

Enron Executive to be Sentenced Next Week

Jeffrey Skilling, a former Enron chief executive convicted of fraud, insider trading and conspiracy, will face sentencing early next week. Experts anticipate the judge is unlikely show him any leniency as he fought so intensely against the charges and vehemently declared his innocence. Skilling’s will most likely receive a sentence of 25 years in prison. Skillings participation in Enron’s fraud and conspiracy resulted in over 4,000 employees losing their jobs and others their life savings. Additionally, investors ended up losing billions of dollars.

Posted by Ryan Jardine at 06:03 AM | Permalink | Comments (0) | TrackBacks (0)

New Jersey Man Charged With Securities Fraud

According to a report by the Asbury Park Press, a man was charged with securities fraud for conduct such as generating false press releases, manipulating prices and stealing from investors. Brian Lake’s alleged crimes also includes releasing stock to himself, creating false corporations, and using profits for personal real estate. Franklin L. Widmann, chief of the New Jersey Bureau of Securities, believes that, “this conduct is yet another demonstration of how thinly traded over-the-counter market can be corrupted for the gain of a few and significant expense of the investing public.”

Posted by Ryan Jardine at 05:16 AM | Permalink | Comments (0) | TrackBacks (0)

8,000 New File-Sharing Lawsuits in Courts

The music industry has filed 8,000 lawsuits against alleged file-swappers around the world. The move is another step in working to stop online piracy and encourage the use of legal downloading services. The International Federation of the Phonographic Industry (IFPI,) which represents music companies around the world, said that the cases have been filed in countries around the world, including the first ones ever in Brazil, Mexico and Poland. The IFPI says that about 20 billion songs were illegally downloaded last year worldwide.

8,000 new file-sharing lawsuits in courts

The IFPI says that many of those targeted for legal action were parents of children who had been illegally sharing files. More than 2,300 people already have settled their cases for illegal file-sharing with an average payout of about $3,034. Although filing such lawsuits is costly for the entertainment industry, Kazaa's $100 million settlement in July helped put money back into the music industry. John Kennedy, chairman and chief executive of IFPI said of Kazaa's settlement: "It put some money back into the war chest to try to clean up the online world. Legal offerings will only thrive and open in different countries if there is a chance of them succeeding."

Posted by Patricia Bowling at 08:19 PM | Permalink | Comments (0) | TrackBacks (0)

MySpace Lawsuit Dismissed

A Los Angeles judge has determined that legal challenges to the media company's 2005 takeover of MySpace.com parent Intermix Media Inc. was lawful. Brad Greenspan, a former chairman and chief executive of Euniverse, which later was renamed Intermix, had lead the lawsuit, which was dismissed completely.

News Corp.: Judge rules MySpace deal lawful

Greenspan left Intermix in 2003 amid an informal Securities and Exchange Commission inquiry. Greenspan still retains about an 11% share of MySpace; Greenspan's claim contends MySpace could be worth about $20 billion.

Posted by Patricia Bowling at 05:30 PM | Permalink | Comments (0) | TrackBacks (0)

SEC Rule Aims For Equal Treatment

According to an article in the Denver Post, the U.S. Securities and Exchange Commission (SEC) has enacted Rule22c-2, that is designed to ensure equal treatment of shareholders. The article notes that often “securities regulation is a form of closing the barn door after the horses are gone.” However, this new rule could be more valuable as it is designed to cause fund managers to implement policies for redemption fees and market-timing.

Christine Gill, a director at PFPC believes that purpose of Rule 22c-2 “is to make sure that no one gets preferential treatment. For the most part, this will be transparent to the consumer … but the consumer never saw the problems last time until they all came to light. This should stop it from happening again, and the only ones who will notice something different are the market timers.”

Posted by Ryan Jardine at 08:21 AM | Permalink | Comments (0) | TrackBacks (0)

Stock Option Backdating A Growing Problem

According to a fascinating report from CNNMoney.com, the FBI is vigorously investigating the stock options procedures for over 55 companies, anticipating that indictments are likely to follow. Stock option backdating and other questionable stock option procedures are particularly hard to investigate because, depending upon the company’s practices, they are not always illegal.

Additionally, hedge fund fraud is a growing concern for the FBI. The rapid growth of the hedge fund industry and the absence of regulations make these investments prone to fraudulent investment schemes. In the last few years, over 90 hedge fund investigations have been completed.

Posted by Ryan Jardine at 05:29 AM | Permalink | Comments (0) | TrackBacks (0)

UnitedHealth CEO Leaves Because of Probe

The chief executive of UnitedHealth Group Inc., William McGuire, will leave UnitedHealth by December 1, said the company. McGuire is the biggest casualty thus far in the stock options scandals. McGuire's departure was unexpected; he is a pulmonologist who built UnitedHealth into one of the largest insurers in the country. Healthcare analyst Les Funtleyder said of McGuire's departure: "It's very surprising. This is a big company. It really does mean that some of this was happening here and there, and it's probably spread across numerous industries."

Stock options probe leads UnitedHealth CEO to resign

Stephen Hemsley, currently UnitedHealth's chief operating officer and president, will replace McGuire as CEO. Shares of UnitedHealth have fallen recently because of the stock-options probe scandal. UnitedHealth says that McGuire had agreed to reprice options given to him in 1994-2992 to the annual high share price for each year to eliminate possible dating issues found in the report. Additionally, option grants made to new and promoted employees were backdated as a matter of policy.

Posted by Patricia Bowling at 09:27 PM | Permalink | Comments (0) | TrackBacks (0)

Walmart Owes $78 Million to Workers

A Pennsylvania jury has ruled that Walmart must pay $78.47 million in damages to workers that were forced to work "off the clock" or during rest breaks. Michelle Braun and Dolores Hummel, former Walmart employees, filed the lawsuit, saying that the company violated Pennsylvania labor laws by failing to pay employees for their work. Hummel said that she was happy with the jury's ruling and that "it took a lot of courage for me to go against Wal-Mart."

Wal-Mart ordered to pay $78 million

The jury awarded $2.5 million for off-the-clock working and about $76 million for lost rest breaks between March 1998 and May 2006. The lawsuit is another blemish on Walmart's already tarnished image; labor unions, politicians and others say that the company pays below poverty level and mistreats its workers. Mike Donovan, attorney for the plaintiffs, said that Walmart wanted its employees to work longer in order to maximize its profits.

Posted by Patricia Bowling at 08:49 PM | Permalink | Comments (0) | TrackBacks (0)

Backdating Scandals Spur Lawsuits

Companies involved in options-backdating scandals have more to worry about than the government. Civil lawsuits also promise to cost companies millions of dollars and many hours in court to settle. Currently, about 120 companies are being watched by the government or are undergoing internal investigations. The scandals are the result of questions about whether companies adjusted dates on options grants to ensure profits for executives. Only Brocade Communications and Comverse have yet actually had their top executives indicted criminally.

Civil suits thrive in backdating scandal

Legal experts say that the small number of indictments is proof of the difficulties in proving executives knowingly increased their capital at the expense of shareholders. However, this has not stopped litigation attorneys from filing civil suits. Micheal Koenig, a criminal defense attorney, says that "it takes an incredible amount of time, money and human capital to defend those type of cases regardless of the outcome. Furthermore, the burden of proof on a plaintiff attorney is less than that on attorneys in criminal trials; civil complaints have an easier time increasing in numbers. Shareholders are alleging in the civil complaints that they suffered financial damages when stock prices supposedly fell upon news that the corporations were under investigation.

Posted by Patricia Bowling at 04:58 PM | Permalink | Comments (0) | TrackBacks (0)

Arkansas Man Defrauds Investors of Nearly $500,000 USD

Fayetteville, Ark- According to media reports, a man claiming to be a securities broker has been charged with securities fraud, deception, wire fraud and mail fraud. Michael Kent Zedlitz had defrauded investors out of thousands of dollars while pretending to be a securities trader. From April 2003 to May 2004 Zedlitz deceived over 20 investors out of $490,000 USD, while promising over 20 – 30 percent in returns. The Arkansas Securities Department is continuing their investigation of this fraudulent behavior.

Posted by Ryan Jardine at 05:24 AM | Permalink | Comments (0) | TrackBacks (0)

Conrad Black Feels Optimistic About Trial

Conrad Black expressed optimism about his upcoming U.S. trial under charges of racketeering, wire fraud, and tax evasion. According to U.S. officials, Black was involved in stealing millions of dollars from Hollinger International Inc.’s shareholders. Investigators allege he used that money to fund his often extravagant lifestyle. While speaking during a luncheon in Canada last week Black said, “You are well aware of what I think of the charges and we’re just going to try the case.”

Posted by Ryan Jardine at 09:48 PM | Permalink | Comments (0) | TrackBacks (0)

Executive Officers Resign Over Allegations of Fraud

According to a report by the AP, two chief executives for McAfee Inc. and CNet Networks Inc. voluntarily resigned amidst allegations of stock fraud. This comes as Apple’s former CFO resigned because of dishonest mishandling of stock options. An increasing number of upper level executives are losing their positions because of fraudulent behavior.

A federal government task force, based in San Francisco, is aggressively seeking to attack stock option fraud. In addition, the Securities and Exchange Commission is planning to impose heavy civil fines and possibly pursue criminal prosecution of companies that deliberately ignore legal standards.

Posted by Ryan Jardine at 06:09 AM | Permalink | Comments (0) | TrackBacks (0)

Countrywide Suing Man

Countrywide Financial Corp., the largest home lender in the U.S., is suing Robert Penn for a mortgage fraud scheme in which he tricked dozens of Virginia residents into buying homes in Indiana at inflated prices. Countrywide alleges that Penn worked with relatives in Virginia and appraisers and mortgage companies to defraud the victims of the scheme. Roughly 100 properties are involved in the lawsuit. While no exact monetary figures have been released, it is estimated that the scheme could be worth about $80 million in loans from Countrywide and other lenders. Rick Simon, a spokesman for Countrywide, said in a statement that: "Countrywide is a victim in this case."

Home lender Countrywide sues Indy man

The scheme invited victims by inviting them to take part in an "investment opportunity" and did not require them to make down payments or cash contributions. Paperwork that the victims signed to be a part of the "opportunity" made them liable for bogus loans for one or more homes by submitting false mortgage applications. Victims were not allowed time to read the paperwork, or were told that reading it was unnecessary.

Posted by Patricia Bowling at 12:21 AM | Permalink | Comments (0) | TrackBacks (0)

Hedge Funds Continue to Draw

Despite scandals such as Amaranth, hedge funds still remain attractive to many pension funds. Hedge funds are appealing because they round out portfolios and offer good returns. The risk of hedge funds can be lessened through diversification of the hedge fund portfolio and through the total portfo

October 31, 2006