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Tag: SEC

Columnist: FBI Has Made ‘Public Sport of Stalking’ Pro Golfer Phil Mickelson

By Norm Pattis
New Haven Register

I have no idea whether Phil Mickelson, one of the world’s premier golfers and three-time winner of the Masters golf tournament, is guilty of insider trading. But the mere fact that we are talking about it tarnishes his reputation. And why are we talking about it? The FBI has made public sport of stalking him.

It all has to do with the price of Clorox stock. In 2011, Mickelson and several others, including a big-time sports bettor from Las Vegas named William Walters, made millions virtually overnight on well-timed stock trades, according to reports published in The New York Times and elsewhere.

How’d they do that? They bought and sold shares just before billionaire Carl C. Icahn announced a takeover bid for Clorox, driving up the price of the shares.

The Securities and Exchange Commission spotted the transactions, and, apparently, federal investigators decided to look more closely at Mickelson, Walters and Icahn, suspecting more than mere serendipity accounted for the windfall.

Insider trading is what criminal defense lawyers call “white-collar crime.” In terms of a bygone era, these offenses are the sort committed by folks who don’t get their hands dirty while working for a living.

Insider trading is basically a form of rigging a market. Information is shared among favored parties before some event affecting a stock’s value is announced on the open market. Those privy to the secrets get a jump on the market.

To read more click here.

Ex-U.S. Attorney Mary Jo White Confirmed as Head of SEC

Mary Jo White

By Allan Lengel
ticklethewire.com

With little fanfare, the Senate on Monday confirmed former federal prosecutor Mary Jo White as head of the U.S. Securities and Exchange Commission.

CNN Money reported that White, 65, was confirmed without a roll call vote.

She is currently head of litigation at the law firm of Debevoise & Plimpton in New York. She  was the U.S. Attorney in Manhattan.

 

FBI Probing Suspicious Trading of Heinz Options Just Before Purchase Announcement

Steve Neavling
ticklethewire.com

The FBI is investigating a series of suspiciously well-timed trades just before the $23 billion acquisition of H.J. Heinz Co., the New York Times reports.

The probe comes as the Security and Exchange Commission froze a Swiss account tied to possible insider trading.

The New York Times wrote that the well-timed options trades were purchased a day before Berkshire Hathaway and the investment firm 3G Capital agreed to buy Heinz.

Shares and the values of options soared after the announcement.

‘‘The FBI is consulting with the SEC to see if a crime was committed,’’ an FBI spokesman said in a statement.

Justice Department: No Evidence for Charges Against Goldman Sachs

Steve Neavling
ticklethewire.com 

Federal authorities closed two investigations into mortgage deals at Goldman Sachs, the Justice Department announced in a rare statement late Thursday, Reuters reports.

Although federal prosecutors are typically loathe to publicize the closing of a case, they issued a statement announcing that no illegal activity was found.

“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the Justice Department said in a statement late on Thursday.

The investigation was spurred by a Congressional committee that asked prosecutors to look into several mortgage deals after Goldman sold troubled mortgage securities to investors who eventually lost a fortune, Reuters reported.

Also on Thursday, the Securities and Exchange Commission announced it ended its investigation into a $1.3 billion subprime mortgage deal.

STORIES OF OTHER INTEREST

Penny-Stock Co.’s, Officers, Promoters, Face SEC Charges for Kickback Schemes

Shoshanna Utchenik
ticklethewire.com

Collaboration between the SEC, FBI, and Florida U.S. Attorney’s office has resulted in charges against several penny-stock companies, their officers, and three promotors for bribes and kickbacks.

The Wall Street Journal reports that shady players charged by the SEC Monday include one caught paying kickbacks to an FBI agent posing as a trustee. Those charged are variously accused of paying to hype microcap stocks in the interest of generating sales illegally.

Eric I. Bustillo, director of the SEC’s Miami office, stated, “The company officers and promoters in many of these schemes disguised their kickbacks as payments to phony consulting companies that performed no actual work. These illegal activities were fully intended to artificially inflate the stock volume and prices of these penny stock companies to the detriment of investors.”

To read more click here.

JPMorgan Chase Faces FBI Investigation on Top of SEC Inquiry

Shoshanna Utchenik
ticklethewire.com

The FBI is starting a preliminary investigation into JPMorgan Chase’s $2 billion- that’s “billion” with a “B”- trading loss, reports the New York Times.

The losses loomed large at Tuesday’s annual shareholder meeting in Tampa. The FBI inquiry comes right on the tail of another one from the Securities and Exchange Commission. Both agencies will look into JPMorgan’s  disclosures and accounting practices. The S.E.C. may also examine whether bank’s risk controls broke down. The feds will face a higher bar than the S.E.C. for bringing a case against the bank.

No individuals have been has been accused of wrongdoing. Reps for the federal investigation stressed that it is “routine for the Justice Department to open a case after a big bank disclosed a huge blunder”.

That’s “blunder” with a big “B”.

To read more click here.

More on the Bernie Madoff Fallout: 8 SEC Workers Disciplined

Bernie Madoff/facebook photo

By Allan Lengel
ticklethewire.com

The Madoff scandal is the gift that keeps giving.

The latest: David Hilzenrath of the Washington Post reports that the Securities and Exchange Commission has disciplined 8 of its employees as part of the agency’s failure to stop the fraud.

But Hilzenrath writes that no one was fired even though SEC’s head of human resources and a law firm hired that one person –described as a manager in the office that inspects investment firms — be fired.

Hilzenrath writes:

“The disclosure that no one was terminated comes at a time when street protesters and other critics who blame Wall Street for the country’s economic plight are questioning whether the government is serious about holding powerful wrongdoers accountable. This week, a federal judge excoriated the SEC for letting firms such as Citigroup settle fraud charges without admitting or denying wrongdoing.”

To read more click here.

indictment

temp-restrainging

SEC Lawyer Revealed Identity of FBI Informant, IG Says

By Allan Lengel
ticklethewire.com

WASHINGTON — The Inspector General for the Securities and Exchange Commission discovered a big no no: A lawyer for the SEC allegedly disclosed the name of a confidential source in an FBI probe to a witness in the case, the Washington Post reported.

The Post’s David Hilzenrath reports that a SEC lawyer also disclosed that the informant was recording conversations for the government.

That information was included in a report to Congress submitted by the Inspector General.

To read the full story click here.