Madoff Scorecard, in Billions: $17.5 Lost, $10 Recovered, $1 to Do It

This one goes down in the category of “its good to be a Receiver or Trustee if there is a lot of money left to go after once the fraud is found out and stopped.” The fees, paid by the industry-backed Securities Investor Protection Corp., or SIPC, which is managing the case, have financed a team of lawyers who this week surpassed $10 billion in recoveries for victims, or almost 60 percent of the principal that vanished after Madoff’s arrest in December 2008.

“No one would have anticipated this recovery six years ago, and not a nickel of the fees has come out of the customer fund,” Stephen Harbeck, SIPC’s president, said today in a phone interview. “It’s a remarkable achievement.”

It’s a great rationale for a $1 billion in fees!!

Six years after Bernard Madoff’s fraud collapsed, the cost of liquidating his defunct investment advisory firm to repay thousands of victims has topped $1 billion, though the con man’s former customers aren’t footing the bill.

Read more at Bloomberg.com

Are Some Professions Less Honest Than Others? Bank on It, Researchers Find

This was simple research test to see if bankers were likely to be honest. Unfortunately they failed. The findings, which were published in the journal Nature, suggest that bankers behave dishonestly only when they feel that is what is expected of them, said Alain Cohn, who is now with the University of Chicago. Perhaps, he said, banks should take a page from medicine and require their own version of the Hippocratic oath.

As banking scandals have mounted over the past decade, some critics have suggested that the industry simply harbors a dishonest culture. Now, three economists from the University of Zurich have tested the idea.

Read more at NYTIMES.com

What Lenders Need To Know About Enforcement of Foreign Country Court Judgments Within The U.S.

Setting up business in foreign jurisdictions has always been complicated but it is even worse now with strict US bank regulations to protect against money laundering and illegal funds transfers. This has scared away many from the US markets due to the complexity and enforcement actions in the US. In retribution some countries have made it tougher to do business in their countries and to collect.

In international loan transactions, lenders obtaining foreign country money judgments against non-U.S. borrowers and guarantors often can utilize U.S. courts to enforce those judgments. This article discusses the judicial procedures and loan documentation provisions that can help maximize the effectiveness of U.S. Court enforcement of foreign money judgments.

Read more at TheSecuredLender.com

S.E.C. Accuses 2 of Insider Trading in Herbalife

In an apparent first for the S.E.C., the agency built the case on the premise that a hedge fund’s private investment playbook amounted to inside information.

The hedge fund world often finds itself at the center of insider trading investigations after profiting from corporate secrets. But for the first time, regulators are saying that a hedge fund’s investment plan itself can be the secret.

Stretching the boundaries of insider trading law, the Securities and Exchange Commission on Tuesday accused two men of possessing confidential information about plans by Pershing Square Capital Management to attack Herbalife. One of the men, Filip Szymik, settled the case; his friend and co-defendant, Jordan Peixoto, did not.

Read more at NyTimes.com

Morgan Stanley Loses Lawsuit To Overturn $8 million Arbitration Ruling

Looks like whistleblowers are starting to win, but they have to fight hard to get what is owed to them.

A federal judge upheld an $8 million arbitration ruling against Morgan Stanley in favor of a former energy trader who said he was improperly terminated after refusing to meet with New York law enforcement authorities.

Judge Thomas Griesa of the U.S. District Court for the Southern District of New York confirmed the 2013 arbitration award by a Financial Industry Regulatory Authority (FINRA) panel that requires two Morgan Stanley units to pay the trader, Amit Gupta, $8 million. Griesa’s order, dated Tuesday, was posted to FINRA’s website on Thursday.

Read more at CompliancEX.com

Today Started Out Sadly Since We May Have Finished One Entire Week Without a Billion Dollar Regulatory Fine

Today started out sadly since we may have finished one entire week without a billion dollar regulatory fine.

Our mood lifted upon the joyous announcements of two potential billion dollar penalties. UBS may face $8 billion in fines to settle a currency probe and Citigroup was politely asked by the US Department of Justice to hand over $10 billion to close an investigation into the bank’s sales of mortgages securities.

Read more at CompiancEX.com

85 Insider Trading Convictions (In A Row)

Federal Prosecutor Bharara has gained national attention and accolades for his formidable track record of putting away insider traders ranging from low-level schmucks to mulit-billionaire Steve Cohen’s giant SAC Capital hedge fund.

In this recent trial, he failed

Rengan Rajaratnam, the kid brother of Galleon Group hedge fund billionaire head Raj Rajaratnam, was just acquitted of a conspiracy charge in an insider trading case.

Rengan’s worked for a time with his big brother Raj Rajaratnam who was previously convicted and sentenced to 11 years in federal prison for an insider trading scheme []

Read the full story at Compliancex.com