Securities fraud

Washington, D.C., Nov. 10, 2009 — The Securities and Exchange Commission today charged the former chief financial officer of a New York-based hedge fund with securities fraud for arranging secret sales of securities from his personal trading account to the hedge fund accounts at inflated prices to generate his own illicit profits.    » read more »

Washington, D.C., Sept. 1, 2009 — The Securities and Exchange Commission today announced the distribution of more than $35 million in Fair Funds to more than 98,000 investors in Cardinal Health, Inc. who were harmed by a fraudulent revenue and earnings management scheme.

The SEC's enforcement action against Cardinal Health in July 2007 alleged that the company presented a false picture of its operating results to the financial community and the investing public — one that matched its publicly disseminated earnings guidance and analysts' expectations rather than its true economic performance. Cardinal Health settled the SEC's charges and paid $35 million in penalties and disgorgement that were placed into the Fair Fund being distributed.    » read more »

August 27, 2009 -- WASHINGTON—James M. Davis, 60, the former chief financial officer of Houston-based Stanford Financial Group (SFG), pleaded guilty today to fraud and obstruction charges related to a $7 billion scheme to defraud investors, Lanny A. Breuer, Assistant Attorney General of the Criminal Division, and Tim Johnson, the U.S. Attorney for the Southern District of Texas, announced.

Davis was charged in a criminal information, filed on June 18, 2009, with conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a U.S. Securities and Exchange Commission (SEC) investigation. The criminal information also seeks forfeiture of up to $1 billion in fraud proceeds.    » read more »

Boston-Based Firm and Affiliate to Pay $40 Million to Settle SEC Charges

Washington, D.C., June 8, 2008 — The Securities and Exchange Commission today charged Boston-based Evergreen Investment Management Company LLC and an affiliate with securities law violations for overstating the value of a mutual fund that invested primarily in mortgage-backed securities, and then only selectively telling shareholders about the fund’s valuation problems.

Evergreen agreed to pay more than $40 million to settle the SEC’s charges without admitting or denying the findings in the SEC’s order. This enforcement action is the result of the joint efforts of the SEC and the Massachusetts Securities Division, which also brought related charges against the Evergreen entities today.    » read more »

Former CEO Angelo Mozilo Additionally Charged With Insider Trading

Washington, D.C., June 4, 2009 — The Securities and Exchange Commission today charged former Countrywide Financial CEO Angelo Mozilo and two other former executives with securities fraud for deliberately misleading investors about the significant credit risks being taken in efforts to build and maintain the company's market share.

Mozilo was additionally charged with insider trading for selling his Countrywide stock based on non-public information for nearly $140 million in profits.    » read more »

Washington, D.C., June 3, 2009 — The Securities and Exchange Commission today announced finalized settlements with Bank of America, RBC Capital Markets, and Deutsche Bank to resolve SEC charges that the firms misled investors regarding the liquidity risks associated with auction rate securities (ARS) that they underwrote, marketed, or sold.

The SEC's Division of Enforcement previously announced preliminary settlements with Bank of America and RBC on Oct. 8, 2008. Today's finalized settlements with those two firms as well as Deutsche Bank provide nearly $6.7 billion to approximately 9,600 customers who invested in ARS before the market for those securities froze in February 2008.    » read more »

May 20, 2009 -- WASHINGTON – Today, President Obama will sign the Helping Families Save Their Homes Act and the Fraud Enforcement and Recovery Act into law.

"These landmark pieces of legislation will protect hardworking Americans, crack down on those who seek to take advantage of them, and ensure that the problems that led us into this crisis never happen again," said President Obama.    » read more »

May 20, 2009 -- Flanked by several Congressional colleagues and a crowd of onlookers, U.S. Senator Ted Kaufman (D-DE) stood beside President Barack Obama May 20 as he signed the Fraud Enforcement and Recovery Act (FERA), legislation to strengthen tools and increase resources available to federal prosecutors to combat financial fraud. Sen. Kaufman introduced FERA - bipartisan legislation that passed Congress this week - in February with Senators Patrick Leahy (D-VT) and Chuck Grassley (R-IA).    » read more »

Washington, D.C., May 19, 2009 — The Securities and Exchange Commission today announced that a federal court has approved the distribution of more than $843 million to harmed investors in the American International Group, Inc. from a Fair Fund that the SEC established after the company’s settlement of an SEC enforcement action for accounting fraud.

The AIG Fair Fund’s court-appointed distribution agent estimates that checks will be mailed to more than 257,000 affected AIG investors within the next few months.    » read more »

Scheme Also Put Municipal Employee Paychecks at Risk

Washington, D.C., May 14, 2009 — The Securities and Exchange Commission today charged two New Jersey men with orchestrating a fraudulent scheme that sold unregistered securities and commingled investor funds with their payroll service used by New Jersey municipalities and small businesses.

The SEC alleges that Paul G. Bultmeyer and Arthur J. Piacentini carried out the fraud through their firms Sherbourne Capital Management, Ltd. and Sherbourne Financial, Ltd. by offering and selling so-called "Prime Certificates of Participation" they advertised in print publications as well as on Craigslist and other Internet sites.    » read more »

Washington, D.C., May 8, 2009 — The Securities and Exchange Commission announced today that Michael Lauer, the head of two Connecticut-based hedge fund advisors, has been ordered to pay more than $62 million within 15 days as a result of being found liable on SEC fraud charges last fall.

U.S. District Judge Kenneth Marra for the Southern District of Florida found that Lauer, head of Lancer Management Group and Lancer Management Group II, must pay more than $43.6 million to deprive him of his ill-gotten gains, and more than $18.9 million in prejudgment interest.    » read more »

Washington, D.C., April 27, 2009 — The Securities and Exchange Commission today obtained an emergency court order to freeze the assets of a Connecticut-based money manager and the hedge funds that he controls, alleging that he forged documents, promised false returns, and misrepresented assets managed by the funds to illicitly raise more than $30 million from investors.    » read more »

Washington, D.C., April 13, 2009 — The Securities and Exchange Commission today charged an El Segundo, Calif.-based promoter and her firm for operating a $23 million Ponzi scheme that purported to use investor funds to invest in risk-free, high-yield investment programs involving bank trading, oil and gold exploration, or real estate.    » read more »

Washington, D.C., March 26, 2009 — The Securities and Exchange Commission has obtained an emergency court order halting a $68 million Ponzi scheme involving the sale of fictitious high-yield certificates of deposit (CDs) by Caribbean-based Millennium Bank.    » read more »

Washington, D.C., March 25, 2009 — The Securities and Exchange Commission has obtained an emergency court order freezing the assets of a Chicago-area investment adviser and two of its principals who are alleged to have misappropriated more than $4 million in client assets by transferring them to third parties, and incorrectly reported the net asset and other investment values to investors.    » read more »