Back in November, UBS worked out a prettay, prettay, prettay sweet deal for itself re: Libor manipulation. Like many another bank, UBS’s employees had their way with London Interbank Offered Rate. Unlike many other bank, which faced stiff penalties for doing so, the Swiss struck an immunity deal with the EU wherein it paid a relatively small fine and then, in exchange for cooperating with authorities and “turning over information about other banks,” found itself in the clear. Anyway, that worked out so well for UBS last time that it’s decided to take the same approach with a new rate-rigging investigation, and save itself a coupla bucks. Read more »
Has he said “No, I got this” when the time came to compensate the fellow who inked the words “Buy Low Sell High Never Die” in an old-timey font down the left side of your neck and “Mama’s Boy” down the right? Has he paid for the oil changes on your Harley? Has he helped you shop for the most luxurious of cat beds, as well as a set of duchess satin pillowcases to go with, for Mr. Whiskerson, and then winked at you and said “It’s on me” at the register? If you answered no to any of the above, you might want to fire your broker and get in touch with George Carris, who knows how to treat his clients right. Read more »
Today the Justice Department indicted nine people for operating “one of the largest international penny stock frauds and advance fee schemes in history” and as you’d expect from that description it was a very professional multinational operation.1 I mean, y’know, it was a penny-stock pump-and-dump scheme, one involving “distributing false press releases, announcing non-existent business ventures and fake mergers, posting false information on social media sites and bribing stock promoters and brokers,” but it was a penny stock pump-and-dump scheme that made $120 million, so that’s impressive.2
So, fine. Here you are having successfully executed a pump-and-dump scheme. You pumped, then you dumped. You have $120 million, other people have worthless stock. You could stop there and call yourself a pretty successful criminal. But then you get to thinking: the people you defrauded have something else, in addition to their worthless stock. They have something that is actually extremely valuable. They have: an abnormal willingness to piss away money on terrible ideas! They have a complete lack of common sense! And you know who they are!
So why not make some money off of that? A second-rate crook might think “well I’ll sell them some more penny stocks” but of course they’ve just been burned. They’re idiots, yes, but they’re idiots who’ve been put off penny stocks for a while. They’re still mad about the last penny stock. But what if there were some way to take advantage of exactly that fact? Read more »
SEC Changes Its Mind About Deal With Phil Falcone That Included “Go Ahead And Keep Committing Fraud” ProvisionBy Matt Levine
The Securities and Exchange Commission overruled its own enforcement division’s decision to settle a civil case with the high-flying money manager Philip A. Falcone and his flagship hedge fund, a rare reversal that signals a broader crackdown by the agency. … While the deal also included at least a two-year ban from raising new capital, a potential death knell to a hedge fund manager, that punishment came with a number of caveats. And in a a moral victory for Mr. Falcone, the deal also omitted a common provision that prohibits defendants from committing future violations with fraudulent intent.
Apparently SEC Chairman Mary Jo White killed the deal:
White, a former Wall Street defense lawyer, and Democrats Luis A. Aguilar and Elisse B. Walter, in a 3-to-1 vote, were concerned that Falcone wasn’t barred from serving as officer or director of a public company, said the people, asking not to be named because the deliberations aren’t public. The SEC informed Falcone’s Harbinger Capital Partners LLC of the decision yesterday, according to a filing from Harbinger Group Inc.1
Man it’s hard to be the SEC. Presumably they employ a lot of people who do, like, actual work. Read more »
You’re going to have to try a lot harder than strippers, black jack, and a leased Mercedes to impress us. You’re competing with people who’ve spent millions on Caramel Macchiatos and priceless Teddy Bear collections. Think outside the box for once in your life. Read more »
Medical Device Company CEO Thought It Best Not To Be “100% Accurate” With Investors About Possibly-Exploding DeviceBy Matt Levine
Here’s a strange little SEC securities fraud case. Imaging3 is a small, now-bankrupt medical imaging device company that was developing a 3D scanner (pictured right, with CEO Dean Janes) that certain members of the medical establishment did not like, quite possibly because it didn’t work, hard to tell. Imaging3 sought FDA approval for its scanner and, in October 2010, the FDA rejected its application. On November 1 after the close, the company announced that it had received this rejection and held a conference call with investors. Janes, the CEO, was mad:
Janes informed shareholders and others on the call that the FDA’s rejection of the submission was not based on concerns regarding the device’s technology or image quality or the safety of the device. Instead, at numerous points during the call, he described the FDA’s denial as “ridiculous,” “administrative,” “not substantive,” and”nonsensical.”
During the November 1 call, Janes omitted any mention of the FDA’s specific and substantive concerns. For example, he never explained in any way that the FDA had determined that the use of certain sample images was “scientifically invalid and useless,” or that the FDA had expressed concerns about vibration hazards or overheating of the device.
So a difference of opinion then? Read more »