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HomeARS Fight Continues: Another Round with Oppenheimer
Posted by Larry Doyle on June 18th, 2010 11:06 AM |
The fight for justice for auction-rate securities investors has many rounds yet to go. I remain determined to fight, cover this story, and highlight the ongoing fraud and injustice perpetrated on ARS investors everywhere until the last punch has been thrown. On that note, let’s get ready to rumble!
I received a recent message from an individual in Florida. The fact that the financial fraud in this specific case and the ARS market in totality remain largely unknown to the American public is an indictment of Wall Street, the financial industry at large, our financial regulators, the broad financial media, Congress, and ultimately our nation. Let’s strap it back on, and go after those individuals and institutions in our country who have failed to protect our brothers and sisters who were defrauded in the distribution of ARS. (more…)
Protecting Yourself Against Mortgage Fraud
Posted by Larry Doyle on June 18th, 2010 9:20 AM |
Financial distress leaves people increasingly vulnerable to financial predators and resulting financial scams and fraud. With homeowners increasingly underwater on their mortgages, the scum in our society are diligently pursuing and perpetrating their vile works. Homeowners looking to modify their mortgages or otherwise investigating avenues of financial assistance need to be exceptionally careful at this point in time.
What should homeowners do? I would highlight two recommended paths. In my local paper this morning were rules of the road to Avoid Becoming a Victim of Fraud:
According to an FBI advisory, these are steps to take to avoid becoming the victim of mortgage fraud: (more…)
October 19, 1987 — October 19, 2009: Deja Vu All Over Again?
Posted by Larry Doyle on October 19th, 2009 1:43 PM |
TIME magazine cover December 1, 1986. What has really changed on Wall Street?
Twenty-two years ago today the equity markets crashed. The Dow Jones Industrial average cratered by a whopping 22%!!
Have our markets, economy, and financial regulatory oversight progressed, regressed, or is it merely “deja vu all over again?” Well, with the markets up 1% on the day and 50% off the lows in March of this year, clearly today is vastly different than 22 years ago, right? Honestly, I would maintain that from a grand perspective very little has changed. Why? How?
As much as we may have made technological progress on a number of fronts both on and off Wall Street, the fraud implicit in the illegal use of information is still very much central to the corruption that occurs on Wall Street.
Back in the mid to late ’80s, insider trading activity was rampant in a number of hedge funds and leveraged buyout activities. The so-called king of Wall Street at that time was Ivan Boesky. As it turns out, Boesky was nothing more than a common criminal involved in a massive insider trading scandal. When Boesky was confronted with the evidence of his criminal activities, he turned on his cronies and sang like a canary. In relatively short order, some of Wall Street’s titans fell like dominoes. Who were some of these titans? Dennis Levine, Robert Freeman, Martin Siegel, and Michael Milken. These masters of the universe were nothing more than white collar criminals.
Fast forward to 2009. The markets are rebounding and Wall Street is back to ‘business as usual.’ In a manner of speaking, the ‘business as usual’ is no different than the business that occurred back in the ’80s. What business is that? Insider trading.
The story that broke on Friday in which a number of individuals at a few hedge funds supported by corporate insiders at IBM and Intel is certainly only the tip of the iceberg of insider trading circa 2009. Bloomberg addresses this certainty in writing, U.S. Said to Target Waves of Insider-Trading Activities:
Federal investigators are gearing up to file charges against a wider array of insider-trading networks, some linked to the criminal case against billionaire hedge-fund manager Raj Rajaratnam that shook Wall Street last week, people familiar with the matter said.
The pending crackdown, based on at least two years of investigation, targets securities professionals including hedge- fund managers, lawyers and other Wall Street players, the people said, declining to be identified because the cases aren’t public. Some probes, like the one focused on Rajaratnam, rely on wiretaps. Others stem from a secret Securities and Exchange Commission data-mining project set up to pinpoint clusters of people who make similar well-timed stock investments.
I am sure there are individuals going home today wondering if their illicit activities will be, or already have been, detected.
Fraud driven by greed is a timeless activity made only more prevalent by an industry which has corrupted itself by diluting its regulatory oversight.
October 19, 2009 . . . deja vu all over again.
LD
The Downfall of Kidder Peabody or Taking ‘the House’ to ‘the Cleaners’
Posted by Larry Doyle on July 28th, 2009 12:24 PM |
Some of the greatest financial heists in Wall Street history have been ‘inside jobs.’ What do I mean? Virtually every financial con on Wall Street has been predicated on the ability to control the flow of funds and information from the ‘back office.’
For this very reason, Federal Reserve rules now dictate mandatory two weeks of consecutive vacation for bank employees involved in the markets. Why? During that time period, compliance and control officials can check the books and records and make sure there are no illegal or illicit activities.
I am reminded of this rule in reading a Bloomberg report Kerviel Lawyer Says SocGen Knew of Trading Positions:
Jerome Kerviel, the trader blamed by Societe Generale SA for a 4.9 billion-euro ($7 billion) loss last year, told a French court that his superiors were aware of his activities.
Kerviel never tried to hide his trades and about 300 of the Paris-based bank’s employees would have been able to see his trading positions on his computer, Kerviel’s lawyer Olivier Metzner, said in an interview today. Metzner filed arguments to a Paris court countering prosecutors’ recommendation that Kerviel be tried for abuse of trust, falsifying documents and computer hacking. The filing repeats Kerviel’s long-held stance.
“In 2007, he was making money and they let him go on,” Metzner said. “In 2008, it all went bad, the machine was exposed, they unwound the positions in a panic and they created losses.”
The defense argument is the final step before a decision by investigating Judges Renaud Van Ruymbeke and Francoise Desset in September on whether Kerviel should be tried. The judicial inquiry began less than a week after Societe Generale disclosed the loss on Jan. 24, 2008, after selling Kerviel’s positions.
Societe Generale said Kerviel made trades without proper authorization and hid them with faked hedges.
“The bank wasn’t aware of the extent of Kerviel’s positions,” said Jean Veil, Societe Generale’s lawyer. “That’s been proven by reports by the financial police department, by stock market regulators and by the Banking Commission.”
Whether SocGen management knew of Kerviel’s trading activity or not is for the courts to determine. Either way, though, there was an enormous breakdown in risk management and internal controls.
During my career, the downfall of Kidder Peabody – a 130 year old firm – in 1994 was the greatest example of ‘taking the house’ to ‘the cleaners.’ How did this occur? A government bond trader by the name of Joe Jett figured out a scam to ‘arb his back office,’ meaning he gamed Kidder’s internal systems to create the illusion of hundreds of millions in profits. In the process of doing so, Jett’s trading book in his sector of the market ballooned to astronomical levels. (more…)
