fraud

  • 16 Apr 2010 at 10:40 AM

SEC Charges Goldman Sachs With Fraud On Subprime Mortgages

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Supposedly “key facts related to subprime securities” were omitted and investors in the CDO lost $1 billion (whereas Paulson & Co, which apparently had a “hand in structuring the CDO in question,” made a billion). Dick Bové has no problem with this, and doesn’t think Goldman will either, which Mark Haines cannot believe.

More from the Times:

The suit also named Fabrice Tourre, a 31 year-old vice president at Goldman who helped create and sell the investment. The instrument in the S.E.C. case, called Abacus 2007-AC1, was one of 25 deals that Goldman created so the bank and select clients could bet against the housing market. Those deals, which were the subject of an article in The New York Times in December, initially protected Goldman from losses when the mortgage market disintegrated and later yielded profits for the bank.

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  • 08 Apr 2010 at 5:30 PM

Warren Buffett Hit With Lawsuit by RV Dealer

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Warren Buffett take note: Don’t get involved in the RV business. It’s full of wealthy rednecks and sometimes they like stealing cash directly from the office vending machines.

That’s at least what one executive of a Berkshire Hathaway-owned RV company has alleged in a recent lawsuit filed after he was denied the CEO position and fired from the company. The former exec, Brad Mart, said he helped orchestrate the $800 million sale of the RV company, Forest River, in 2005 by simply submitting a two-page summary of the business to the Oracle of Omaha, who “surprisingly” called Mart a few hours later and bought the company shortly after.

“Mart was surprised that Buffett made the decision to purchase the company with virtually no due diligence, including no onsite visit to Forest River,” he said in the complaint. Read more »

  • 29 Oct 2009 at 12:15 PM

Today In Handcuffs: Helmut Kiener Come On Down!

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German police have arrested the founder of K1 Group, Helmut Kiener, in connection with an investigation into allegations of fraud at his hedge fund, a local prosecutor said.
European and U.S. authorities are investigating allegations that K1 embezzled millions of dollars from several global banks, including J.P. Morgan Chase & Co., Barclays PLC, BNP Paribas SA and Societe Generale SA.

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  • 17 Jun 2009 at 10:08 AM

Chicago Finally Arrives At The Fraud Party

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chicago_fireworks.jpgHe is no Bernie or Danny Pang but Philip Baker is trying to do the midwest proud and raise the region’s profile in the national fraud standings. Baker, former managing director of Chicago-based Lake Shore Asset Management Ltd., who is conveniently nowhere to be found, is accused of using false information to solicit over $300 million from investors to invest in commodity futures. Some of the promises Baker made with his fingers crossed behind his back were:
- that the commodity pools generated positive returns since 1993 — including returns of more than 50 percent in one year — when it actually experienced millions of dollars in trading losses;
– that no management fee would be charged and participants would pay only a “profit incentive fee” if the pools generated profits, when in fact Baker charged more than $30 million in fees and converted millions in investor funds to his own use though the pools were not profitable; and
– that he co-founded Lake Shore in 1993, and it was regulated by U.S. authorities, when in fact he was not officially associated until January 2007. There are no allegations of wrongdoing involving Lake Shore Inc.
Chicago hedge fund director sought for $300 million fraud [Chicago Sun Times]

  • 16 Jun 2009 at 2:17 PM

Fraudster Is $5,000 Poorer But No Prisoner

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Witness.jpgIn a convincing victory for justice, the former CEO of a Gen Re subsidiary was sentenced to the equivalent of a mild warning from a substitute teacher for his part in defrauding AIG investors of $597 million. John Houldsworth pleaded guilty in 2005 to conspiracy to commit securities fraud and then testified on the government’s behalf to help convict 5 other executives involved in the fraud. In light of his “truly extraordinary” cooperation and heartfelt apology, Houldsworth’s sentence was a crushing 2 years probation, $5,000 fine and 400 hours of community service.
Gen Re’s Houldsworth Avoids Prison in AIG Fraud Case [Bloomberg]

  • 15 Jun 2009 at 1:03 PM

SEC Gets A Shot At Redemption

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suitcase_of_money.jpgIf Mary Schapiro and the revamped SEC can’t put this one away, there is really no hope for them. Italian authorities recently found a little surprise in the suitcases of two Japanese travelers trying to cross the border into Switzerland- US government bonds with a face value of over $134 billion. The Italian police now want the SEC to opine on whether these two individuals were just overpacking for a holiday in the Alps or up to something a little more illicit.
Among the issues that may befuddle SEC are:
(1) The likelihood the 2 people stopped at the border are legitimately the US’s fourth largest creditor
(2) The denominations listed on the bonds did not exist on the date they were theoretically issued; and
(3) The “Kennedy” classification of the bonds does not appear to exist.
Italian Police Ask SEC to Authenticate Seized U.S. Treasuries [Bloomberg]

  • 08 Jun 2009 at 11:26 AM

Madoff Victims Try To Out Ponzi The Ponz Himself

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berniebuck.jpgIt appears as though one great fraud deserves another. A group of Madoff victims is taking a page out of Bernie’s book and asking a federal bankruptcy judge to reconsider the way their losses are being calculated. Their magic formula is one part backward logic, one part betting that a judicial system that awarded damages to somebody who lost their psychic powers can get taken to the cleaners one more time.

The customers say that, by law, they should be given credit for the full value of the securities shown on the last account statements they received before Mr. Madoff’s arrest in mid-December, even though they were bogus and none of the trades were ever made. According to court filings, those account balances add up to more than $64 billion.

Papa Ponzi would be proud.
Victims of Madoff Seek Claims Overhaul [NYT]

  • 08 Jun 2009 at 10:04 AM

Lying Billionaire Says UBS Lied About His Ability To Lie To The IRS

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UBS.jpgBillionaire Igor Olenicoff is suing UBS for allegedly not telling him the truth about his US tax liabilities for his Swiss bank account. However, the real case here is which of the two parties has less credibility. Olenicoff says UBS pulled a fast one when it came to his tax liabilities and,”tarred his reputation and cheated him out of millions of dollars.” While lamenting his newly shattered reputation, Olenicoff seemingly forgot that he already pleaded guilty to filing a false tax return in 2002 and failing to declare offshore accounts in four different countries from 1998 to 2004. So really this is just a case of some bitter guy trying to bring down an innocent big bank because he got busted, right?

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