Posts Tagged ‘recession’
Thursday, February 25th, 2010
On July 1st, the SEC voted on several new measures that were aimed primarily to increase investor confidence by providing investors with tools to increase corporate accountability. First, the commission approved a measure that requires a shareholder vote on executive pay in proxy solicitations involving companies that receive money from the Troubled Asset Relief Program (TARP). The Commission also voted to propose a measure requiring public companies better disclosure of executive pay in their proxy statements. A New York Stock Exchange rule was changed as well, as the SEC now prohibits brokers from voting proxies in corporate elections without customer input.
These types of programs are all well and good but a fundamental issue remains and that is the SEC actually taking action against the fraudsters in the industry. Until the SEC starts using the tools it has to catch the fraudsters, even the very obvious ones (for example: Madoff), investor confidence will remain lower than it could and should be.
For more information on this story ,click here.
Tags: madoff, ponzi scheme, protect investments, recession, securities fraud, stock fraud
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Thursday, February 25th, 2010
Today, the SEC charged Peter C. Son and Jin K. Chung guilty of conducting an 80 million dollar Ponzi Scheme that involved nearly 500 investors. The scheme targeted Korean-American investors with the false promises of giant returns from forex (foreign currency) trading.
The investment scheme was a classic example of the Ponzi scheme. The funds that were supposed to be invested in foreign currency exchange were used to pay “returns” to select investors. Investor money was also used for the Son’s personal expenditures, including mortgage payments on a multi-million dollar house. The money also provided Son’s wife a salary she did not work for.
SNC Asset Management, Inc. (SNCA) and SNC Investments, Inc. (SNCI), were the two companies that Son and Chung coordinated to get the attention of investors. Manipulated profits and fabricated annual returns attracted many investors. The forex trading profits were fabricated and investors had monthly account statements with fake returns.
As the Ponzi scheme collapsed, Son and Chung drained the money out of these two companies and transfered investor funds into accounts overseas. The SEC is taking court orders to prevent these men and their companies from violating laws in the future and is also taking steps to provide emergency relief for investors. The Commodity Futures Trading Commission has announced civil fraud charges against Son, Chung, SNCA, and SNCI.
For more on the story, click here.
Tags: protect investments, recession, securities fraud, stock fraud, stock loss
Posted in Business Disputes, Consumer Protection, Scams and Schemes, Securities Related Issues | No Comments »
Thursday, February 25th, 2010
It is always a good idea to keep an eye on your money, especially these days and there are many simple ways to guard your money, including these tips from the Wall Street Journal.
1. “Do your homework when picking a financial adviser.”
2. “Ask tough questions to identify potential conflicts of interest.”
3. “Ask tough questions about risk factors.”
4. “Check whether the fund manager’s interests are aligned with yours.”
5. “Check whether the fund firm ’s interests are aligned with yours.”
These steps seems fairly intuitive, but they do definitely merit Post-it or checklist worthy status for any investor.
For more on the details and rationale behind each step, click here.
Tags: ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss
Posted in Consumer Protection | No Comments »
Thursday, February 25th, 2010
Bank Medici AG lost it’s banking license this past Thursday. The financial banking authority of Austria, the Financial Market Authority, took action because the bank’s starting capital mark dropped below the 5 million Euro requirement. Bank Medici claimed that it suffered huge losses due to Madoff’s massive Ponzi scheme. The bank noted on its website that it will still fight in the interest of its clients and make its decisions accordingly.
Read the full story here.
Tags: madoff, ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss, sue broker
Posted in Business Disputes, Consumer Protection, International, Scams and Schemes, Securities Related Issues | No Comments »
Thursday, February 25th, 2010
Another shocker: Nigel Hamilton-Smith, the Antiguan liquidator of the Stanford Group’s offshore bank testified that Stanford used client funds to fuel his conspicuous consumption.
The Texas financier has been accused by U.S. regulators of a $8.5 billion fraud.
For more on the ongoing case, click here and/or see my earlier post.
Tags: madoff, ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss
Posted in Business Disputes, Consumer Protection, Scams and Schemes, Securities Related Issues | No Comments »
Thursday, February 25th, 2010
The twist is not soo much that he got caught with his hand in the proverbial cookie jar.
Mark Bloom, the former manager of the North Hills Management hedge fund based out of New York, was able to start and operate North Hills separately while he was working for another money manager (which, by the way, is also involved in a $500+ million fraud complaint). Bloom claims that he will be using a public defender to defend the stock fraud charges against him. After one of the biggest investors in North Hills Management demanded redemptions and Bloom evaded those request, the investor, a charity, sued because the charity believed that Bloom was using hedge fund money for personal conspicuous consumption.
For more on the story, click here.
Tags: madoff, ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss, sue broker
Posted in Business Disputes, Consumer Protection, International, Scams and Schemes, Securities Related Issues | No Comments »
Thursday, February 25th, 2010
New York Attorney General Andrew Cuomo closed down two debt collection companies in Western New York. The two Buffalo-based firms engaged in a variety of illegal activities to achieve their ends, through various forms of harassment. The Attorney General’s office have delivered subpoenas to over 15 collection agencies due to complaints received in the wake of this investigation.
Debt Collection agencies that engage in illegal means of collection often use coercion and harassment to collect money that sometimes a customer might not even owe. These two Buffalo firms, for example, allegedly forced individuals to pay debts that they didn’t even owe.
This issue has achieved nationwide importance, as the Federal Trade Commission has received three times the amount of complaints regarding debt collection agencies in 2008 in comparison to 2002. There is no doubt that this investigation will lead to the downfall of more debt collection agencies that engage in illegal means to collect.
Tough business this debt collection – significant rules about their activities, serious penalties if they get it wrong. I am sure that most are on the up and up and are aware of the costs of dropping the ball. As in any industry, a few bad apples can ruin the whole thing. The bad ones should be shut down but the good ones do provide a valuable service.
For more on this investigation…click here.
Tags: madoff, recession, securities fraud, stock fraud, stock loss
Posted in Consumer Protection, Scams and Schemes | No Comments »
Thursday, February 25th, 2010
Well, another supposedly strong and trustworthy company is being revealed as a ponzi scheme. This one ‘only’ involved about $8 billion and she was ‘only’ indicted for conspiracy and obstruction of justice. Is it just me or does it seem like the ones you should be able to trust in the financial markets you can’t trust.
Tags: ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss, sue broker
Posted in Business Disputes, Consumer Protection, Scams and Schemes, Securities Related Issues | No Comments »
Thursday, February 25th, 2010
The SEC charged Pang with structuring charges for his scheme to make many transactions just below federal reporting requirements to gain access to huge sums of money without telling the government. Apparently kept the cash at his house until he bought gold bars with it (really!). The SEC is also alleging that he ran a huge ponzi scheme.
Tags: madoff, ponzi scheme, protect investments, recession, securities fraud, stock fraud, stock loss, sue broker
Posted in Business Disputes, Consumer Protection, Scams and Schemes, Securities Related Issues | No Comments »
Thursday, February 25th, 2010
BofA and City have not officially responded but reports are that they may each need more than the $45 billion they already took from the government. While these reports are preliminary apparently the government has told the banks they may have to raise more money. If the final results reveal the banks need more money they can either raise more money from investors, the government could convert their loans into common stock, or the government could release more bailout money.
The stress tests are designed to see if the banks can handle the expected loan losses as the recession continues.
Tags: bank ’stress test’, recession
Posted in Consumer Protection | No Comments »
