securities fraud

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Alleged Ponzi Schemer Judged Unfit to Stand Trial

R. Allen Stanford 'mentally impaired,' judge decides

(Newser) - Jailed Texas billionaire R. Allen Stanford is mentally impaired and incompetent to stand trial, a federal judge ruled yesterday. Psychiatrists testified that Stanford, who is accused of masterminding a $7 billion Ponzi scheme, is suffering from a major depressive disorder, an addiction to anti-anxiety medication, and a brain injury he...

Investors Sue Countrywide Over 'Massive Fraud'

Their triple-A-rated securities are now junk, they claim

(Newser) - Investors are suing Bank of America’s Countrywide mortgage unit, claiming they were fraudulently led into purchasing supposedly triple-A-rated mortgage-backed securities that turned out to be junk. Between 2005 and 2007, the investors bought hundreds of millions of dollars of securities that were supposed to be “conservative” and “...

HSBC Sued for Aiding Madoff
HSBC Sued for Aiding
Bernie Madoff
Dec 6, 2010 5:48 AM CST

HSBC Sued for Aiding Bernie Madoff

Trustee says bank enabled fraud by ignoring warning signs

(Newser) - Bernie Madoff's Ponzi scheme survived for so long because HSBC ignored "red flags" and kept funneling investors' money to the fraudster, says the trustee trying to reclaim money for Madoff's victims. Irving Picard is suing the bank and a group of feeder funds for at least $9 billion, the...

White-Collar Sentences: Too Harsh, or Too Soft?

Loss calculations wildly swing the scale, as in the case of Bruce Karatz

(Newser) - Should Bruce Karatz spend half a decade in prison—or no time at all? Karatz, the ex-CEO of KB Homes, has been convicted of trying to swindle the company out of $11 million. The probation office says he should get eight months' home confinement. But prosecutors want to lock him...

Money Manager Crook Who Faked Death Gets 10 Years

Marcus Schrenker jailed for securities fraud

(Newser) - An Indiana money manager who scammed his friends and then tried to fake his own death in a plane crash has been sentenced to 10 years in a state prison for fraud. Marcus Schrenker will serve that sentence consecutively with a 4-year federal sentence he received last year for parachuting...

SEC Sues Sex Cruise Investment Firm

Funds used to pay for strippers, go-go dancers

(Newser) - The bosses of an upstate New York investment firm used investors' cash to finance their own lavish lifestyles and to underwrite business ventures like a swingers' cruise line, according to an SEC lawsuit. The assets of McGinn, Smith & Co. have been frozen by court order while SEC investigators probe...

Madoff's Brother Target of Crime Probe

Peter Madoff subject of 'wide-ranging' Ponzi scheme inquiry

(Newser) - Finance's most-tarnished family name took another hit yesterday when it emerged that Peter Madoff is the target of a criminal probe relating to big brother Bernie's Ponzi scheme. A court filing states that the Manhattan US attorney's office is conducting an "active and wide ranging" probe of Peter, who...

Whistleblowers: SEC Ignored Us

Flawed process allowed Ponzi schemes to go undetected

(Newser) - The SEC's haphazard method of dealing with whistleblowers means violations go unpunished and frauds left uncovered for years, insiders say. Many informants—including one whose information could have exposed Bernie Madoff's Ponzi scheme—say they were ignored, misunderstood, or sidelined after approaching the regulator with tip-offs, the Washington Post reports....

Crooked Giants Dodge SEC Penalties

Agency routinely grants waivers for harshest punishments

(Newser) - Financial giants accused of swindling investors have been successfully dodging the SEC's harshest penalties by arguing that the law shouldn't apply to them. Firms including Citigroup, Bank of America, and AIG have recently sought and received waivers from regulations requiring lawbreakers to close their mutual fund businesses. Waivers have been...

Madoff HQ Was 'Coke-Fueled Animal House'

Ponzi kingpin now sharing cell with drug offender

(Newser) - Bernie Madoff ran the druggiest, most decadent securities fraud in town, according to court papers filed yesterday. Madoff's offices were so awash in cocaine—paid for with investors' money—that it was nicknamed "the North Pole," and the firm hosted drug-fueled parties featuring topless waitresses, according to a...

First Major Financial Crisis Trial Begins

Bear Stearns execs accused of lying as funds imploded

(Newser) - The first major criminal trial against top Wall Street execs involved in the financial crisis kicked off in New York yesterday. Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin are accused of misleading investors in a desperate attempt to stop them from abandoning the funds, even as they...

Only Half of Madoff's Clients Lost Money

The rest withdrew more than they invested, prosecutors say

(Newser) - Federal prosecutors said yesterday that a review of most accounts held by Bernard Madoff's customers when he was arrested shows that about half of the customers had not lost money because they withdrew more than they originally invested. That doesn't, however, take into account the loss of any money they...

Madoff Lieutenant Expected to Blow Lid Off Scam

(Newser) - Investigators see yesterday's guilty plea of Bernard Madoff's right-hand man as a major breakthrough in their efforts to untangle the elaborate Ponzi scheme, BusinessWeek reports. Frank DiPascali, chief financial officer at Madoff's firm, has promised to cooperate with prosecutors and is expected to name other people involved in the scam...

Ruth Madoff to Bare All Expenditures Over $100

(Newser) - Ruth Madoff won't be able to spend $100 without scrutiny under a deal approved by a bankruptcy judge overseeing the liquidation of her husband's financial firm, the Wall Street Journal reports. Madoff agreed to give a full accounting of her income and any spending over $100 to a court-appointed trustee...

$400M Ponzi Lawyer Gets 20 Years

(Newser) - A high-flying New York lawyer who orchestrated a Ponzi scheme to fund his lavish lifestyle has been sentenced to 20 years in jail, the New York Times reports. Marc Dreier pleaded guilty to charges including conspiracy and securities fraud relating to the scam, which bilked hedge funds and other investors...

NY Lawyer Pleads Guilty to $400M Fraud

Dreier bilked clients, spent cash on yacht and beach houses

(Newser) - New York lawyer Marc Dreier pleaded guilty yesterday to selling hundreds of millions in bogus promissory notes to hedge funds and other clients, reports the Times. Dreier, 59, used the $400 million to fund a Manhattan apartment, beachfront houses, and an $18 million yacht. “He has disgraced the honorable...

Stung by Madoff, SEC Steps Up Pace, Triples Fraud Cases

Embarrassed committee gets aggressive with enforcement

(Newser) - Haunted by the failure to catch Bernie Madoff, the Securities and Exchange Commission is dramatically stepping up its investigation workload, reports the LA Times. Since February, the SEC has frozen the assets of 27 fraud suspects, compared to seven in the same period last year. “The clear message from...

Ruth Madoff Pays Bernie First Visit in Jail

Ponzi schemer's wife stays silent after Manhattan meeting

(Newser) - Ruth Madoff visited her husband in his new prison home for the first time yesterday, the New York Post reports. The swindler's wife, accompanied by private security, appeared calm and relaxed after her 20-minute meeting with Bernard Madoff in the Manhattan Correctional Center, although she refused to answer reporters' questions...

Feds Grab Madoff Mansion
 Feds Grab Madoff Mansion 
Apr 2, 2009 1:35 AM CDT

Feds Grab Madoff Mansion

$11M Palm Beach pad will be sold to pay pack Ponzi scheme victims

(Newser) - Federal authorities seized Bernard Madoff's Florida mansion yesterday shortly after confiscating his two yachts, the New York Daily News reports. US marshals and Palm Beach police took over the five-bedroom $11 million mansion—which is in Ruth Madoff's name—as part of an effort to seize as many Madoff assets...

Judge Kills Allowance for Madoff Bro

Rulings in response to lawsuits also extend freeze to feeder funds

(Newser) - A appeals judge yesterday nixed a deal that gave Bernard Madoff brother Peter a $10,000 monthly allowance out of his frozen assets, reports the New York Daily News. The ruling, which came in response to a suit from a law student who lost his $500,000 inheritance, prevents him...

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