insider trading

{| style="width:100%; border:1px solid black; background:#ffe0e0; padding:0; text-align:center;" |- | This photo is of Wikipedia Takes Manhattan location code 174, Foley Square. |} Daniel Patrick Moynihan U.S. Courthouse at 500 Pearl Street. (Photo credit: Wikipedia)

Here's what we are reading:

Heads Up  - On May 2 the sentencing of convicted insider trader Todd Newman will take place in Manhattan ... .he's looking at over 6 years.  Also in Manhattan, Sky Capital's Ross Mandell is having his appeal heard by the 2nd Circuit.  Mandell is out of prison awaiting the outcome of this decision .... he was sentenced to 12 years in prison.  I'll be attending both events and will blog on them for Forbes.com tomorrow!

Diamondback Says It Was Victim of Fraud (Bloomberg) - The now defunct Diamondback Capital has asked a U.S. Court for restitution of $39 million from one of its former portfoliio managers, Todd Newman.  Newman, who was convicted of insider trading in December is set to be sentenced to prison on Thursday.

Level Global to Pay $21.5 Million Fine Related to Insider Trading (DealBook) -  Level Global Investors, one of the largest hedge funds ensnared by the government’s insider-trading crackdown, has agreed to pay more than $21.5 million in fines and penalties to resolve its role in the investigation.  The Securities and Exchange Commission announced on Monday that Level Global, which closed in 2011 shortly after a raid by the F.B.I., had settled a lawsuit accusing the firm’s co-founder and an analyst of illegally trading in the shares of the technology companies Dell and Nvidia while in possession of secret information about them.

PNC Investment Broker Sentenced to Prison (Times Tribune) - For more than a decade, Nicholas Polito Jr. was a trusted investment broker for PNC Bank, then financial problems brought on by his addictions to alcohol and gambling led him to do things he once deemed unthinkable, his attorney said Monday. Over a six-year period, he used his knowledge of banking to pilfer more than $500,000 from clients by secretly transferring money from their accounts to his own.

Aluquerque Real Estate Developer Sentenced to Prison -  Albuquerque real estate developer Vincent J Garcia, 61, was sentenced this afternoon to 27 months in federal prison followed by five years of supervised release for his bank fraud conviction. Garcia also was ordered to pay $722,543.76 in restitution.

Is Wall Street Full of Crooks?  YES says Top Economist (Independent) - In a cutting attack on America's financial hub, one of the world's most respected economists has said Wall St is full of "crooks" and hasn't reformed its "pathological" culture since the financial crash.  Professor Jeffrey Sachs told a high-powered audience at the Philadelphia Federal Reserve earlier this month that the lack of reform was down to “a docile president, a docile White House and a docile regulatory system that absolutely can’t find its voice.”

The logo of KPMG. (Photo credit: Wikipedia)

Here's what we are reading today:

KPMG Audit Partner Resigns Amidst Insider Allegations (Bloomberg) -  KPMG LLP fired the head of its Los Angeles audit practice after learning that he provided inside information to someone who used it to trade stocks.   The partner, Scott London, was the lead auditor for Skechers U.S.A. Inc. (SKX), according to David Weinberg, the shoemaker’s chief financial officer. Herbalife Ltd. (HLF) and Skechers said in statements that KPMG is withdrawing as their auditor. The U.S. Justice Department and the Securities and Exchange Commission are investigating the partner’s actions.

Trial of Fmr Federal Prison Guard Accused of Murdering Another Guard (KCOY) - The first witnesses to testify were Lompoc Police officers who investigated the shooting death of Victorville Federal Prison guard Gary Bent at the Embassy Suites Hotel in Lompoc on March 8, 2012.  The two men were attending a training seminar when the murder occurred.

Private Prison Put On Hold Due to Budget Concerns (Standard Examiner) - Mississippe Gov. Phil Bryant has signed bill to allow the state to contract with the federal government to house federal inmates in Leflore County in a now closed private prison.  However, corrections officials say budget cuts at the Bureau of Prisons have put the process on hold.

Ever Wonder How They Punish Big Bankers in the U.K.? (DealBooK) - Well don't start getting thoughts of stretch tables or chubby men chained to a wall, think taking away their "Knighthood".  Oh, the horror.

Here's what we are reading:

Play by Play of London Whale Hearing (Rolling Stone) - In case you missed it, take a scan of the replay of the live-blog by Matt Taibbi during the Senate hearing on the JPMorgan Chase "London Whale" trade that lost the bank about $6.3 billion.  It is amazing what smart people forget.

What is Ahead for SAC Capital (DealBook) - My good friend Peter Henning put together an overview of the settlements that SAC entered into regarding charges of insider trading.  A record $602 million paid in fines and disgorgement .... but will anyone go to prison?

Supreme Court Looks At Freezing Defendant Assets (Reuters) - Once a defendant is charged, prosecutors are keen to freeze their assets to preserve funds to those potentially harmed by the crime .... but how does a defendant pay for a lawyer to prove his/her innocence?  The Supreme Court is going to look at the case of Kerri Kaley, who was charged for taking supplies from her company (Johnson & Johnson) and selling them herself.  Prosecutors sought to freeze her (her husband was also arrested) hampering her ability to get a lawyer.

Lance Armstrong finishing 3rd in Sète, taking over the Yellow Jersey at Grand Prix Midi Libre 2002 (Photo credit: Wikipedia)

Here is what we are reading today:

Former Massey Executive Pleads Guilty and Points to CEO (Huffington Post) - The chief executive, Don Blankenship, at the time of the deadly West Virginia mine explosion was implicated by a former longtime subordinate Thursday of ordering a widespread corporate practice of warning coal miners about surprise federal inspections. The allegation made a former president of a Massey Energy subsidiary, David Hughart, came as he pleaded guilty to federal conspiracy charges and as federal investigators have signaled they are working their way up the ladder to what experts say would be a rare prosecution of a major corporate executive.

Lance Armstrong and FRS Accused of Fraud (Bloomberg) - Armstrong in FRS’s television advertisements claimed that FRS’s energy and health supplements were Armstrong’s “secret weapon,” according to a proposed class-action lawsuit filed yesterday in federal court in Los Angeles. Consumers wouldn’t have bought FRS products, or would have paid less for them, if it hadn’t been for the misleading ads, according to the complaint.

Supreme Court Decides on Fraud Statute of Limitation Case (DealBook) - In Gabelli v. Securities and Exchange Commission, Chief Justice John G. Roberts Jr. wrote in the unanimous decision rejecting the S.E.C.’s argument that a federal statute that limits the government’s authority to pursue civil penalties should commence when a fraud is discovered, not when it occurred.

"Inside Information For Sale", Long Island Man Nabbed for Insider Trading (Bloomberg) - Damian Perna, of Oceanside, New York, was accused of obtaining draft earnings reports for companies such as Consolidated Graphics Inc. (CGX), Alamo Group Inc. (ALG), Miller Industries Inc. and Innophops Holdings Inc. (IPHS) before their public release through a contact at an investor-relations firm. After getting an advance copy of one earnings report, Perna sold it for $7,000 to a Federal Bureau of Investigation agent working under cover, prosecutors said.

First, I would like to thank the Arkansas Society of CPA's for allowing me to present at an all-day seminar on Fraud November 27th in Little Rock.  Great audience and wonderful hopitality.

Ex-Massey Executive Charged (LA Times) - The Upper Big Branch mine disaster claimed 29 lives in an explosion that rocked a small West Virginia community.  Up until this week, only small bit players had been arrested for the numerous mine safety violations.  This week, David Hughart, former president of Massey's Green Valley Resource Group was charged with tipping off mine officials in advance of "surprise" inspections.  Beyond his being charged, it looks like he may be cooperating with authorities against people higher than him at company who knew of the practices which cut corners on saftey in exchange for greater mine output.

SAC Capital Could Be Charged by SEC (Reuters) - The arrest of Ex-SAC portfolio manager Mathew Martoma on insider trading charges has moved one step closer to SAC titan Stevie Cohen.  SAC acknowledged that it had received a Wells Notice from the Securities and Exchange Commission, an indication that formal charges could be coming against the legendary firm.  At the same time, Cohen tries to clam investors through reassurances.

BP Execs Plead NOT GUILTY In Deep Water Horizon Spill (Bloomberg) - Three BP executives were charged in federal court in New Orleans .... two were chraged with manslaughter due to their negligence and one with obstruction.  These charges represent the first arrests of anyone at BP associated with the spill.

Doug DeCines, Ex-Baltimore Oriole Baseballer, Charged With Insider Trading (Bloomberg) -  According to the Feds,tThe former Major League Baseball player was tipped off by an unidentified “officer and director” of Santa Ana, California-based Advanced Medical Optics that Abbott Labs was preparing a bid to buy the company for $21 to $23 a share, prosecutors said. The shares were trading for about $8 at the time, prosecutors said.  DeCinces, who last year agreed to pay $2.5 million to settle insider-trading claims by the Securities and Exchange Commission, liquidated his stock portfolio to buy Advanced Medical Optics shares and passed the information on to three of his friends to make up for prior investment advice that had gone bad, according to the criminal complaint.