Securities

Brocade Will Pay $7M to Settle Stock Option Fraud

Fri, 08 Jun 2007 13:10:59 -0700

According to the Securities and Exchange Commission, Brocade Communications will pay a $7 million penalty to settle charges that they performed fraudulent stock option backdating. Brocade agreed to pay to settle the charges without admitting guilt. The SEC alleges that Brocade's former chief executive and other former executives backdated stock options, misstated compensation expenses, and hid the misconduct by creating false documents.

Brocade to pay $7 mln to settle stock option fraud

Hedge Fund Manager Pleads Guilty to Fraud

Thu, 07 Jun 2007 12:56:54 -0700

John Whittier, the founder of now-defunct hedge fund Wood River Capital Management, pleaded guilty to defrauding investors of $88 million. Whittier pleaded guilty to securities fraud and to having not filed stock holding disclosures with the U.S. Securities and Exchange Commission. Whittier could have spent more than 20 years in jail, but likely will only spend between 15 and 19 years in prison. Whittier also will lose $5.5 million.

Hedge Fund Manager Pleads Guilty to Fraud

GE Sued for Gender Discrimination

Wed, 06 Jun 2007 12:26:00 -0700

Lorene Schaefer, a female attorney at General Electric Co., is filing a lawsuit against GE for underpaying and underpromoting its female employees. 13 GE officers and directors also are named in the lawsuit, including Chairman and Chief Executive Jeff Immelt. Schaefer's suit is hoping for class-action status and seeks $500 million on behalf of 1,500 to 1,700 female GE employees.

GE Gets Sued by Employee for Gender Discrimination

WellPoint CFO Leaves

Tue, 05 Jun 2007 12:00:26 -0700

David Colby, WellPoint Inc.'s chief financial officer, has been released from the company for having violated the health insurer's code of conduct. However, Colby's policy violations were not related to the company's business and were not illegal. Because of the "non-business nature" of the actions, WellPoint did not provide any additional information. Joe Francis, a Bank of America analyst, said of Colby's departure: "The market will be upset initially about Mr. Colby's departure, because he is such a fixture in the industry, but we expect it will soon forget all this."

WellPoint CFO Out Amid Conduct Violations

Tax Fraud Charges for Four Ernst & Young Partners

Mon, 04 Jun 2007 11:36:03 -0700

U.S. prosecutors charged four current and past Ernst & Young accountants with promoting fraudulent tax shelters. Prosecutors did not bring criminal charges against the accounting firm; however, the firm has been under criminal investigation since at least mid-2004.

Tax-Fraud Charges for 4 From Ernst & Young

China Will Restrict Securities Accounts in Suspected Fraud Cases

Fri, 01 Jun 2007 12:47:37 -0700

China's Securities Regulatory Commission plans to classify securities trading accounts as "restricted" in suspected market manipulation and insider trading cases. Accounts of this classification will be suspended for 15 days, which then can be renewed for another 15 days, depending on the regulator's approval. China's stock market has been the focus of a major insider trading investigation earlier in the month.

China to Restrict Securities Accounts in Suspected Stock Trading Fraud Cases

Ex-Coke Secretary Gets 8 Years

Thu, 31 May 2007 12:17:10 -0700

Joya Williams, a former secretary for Coca-Cola, was convicted of conspiracy to steal trade secrets from Coca-Cola and has been sentenced to eight years in federal prison. Williams and Ibrahim Dimson plotted to sell Coca-Cola's recipe secrets to Pepsi for at least $1.5 million. U.S. District Judge J. Own Forrester said that "this is the kind of offense that cannot be tolerated in out society."

Seven Years for Former US Foodservice Exec in Securities Fraud

Securities Fraud Class Action Meets Legal Test

Tue, 29 May 2007 18:52:48 -0700

Nature's Sunshine Products' motion to dismiss a class action lawsuit has been denied. U.S. District Judge Ted Stewart decided on Monday that there was adequate evidence that the company might be guilty of allegations of securities fraud, cover-up, and insider trading. Stewart ruled against Nature's Sunshine on all counts, except he did decide to limit the scope of claims to those occurring on or after March 15, 2005.

Securities Fraud Class-Action Suit Meets Legal Test

Investors Need to Be Aware of Scams

Mon, 28 May 2007 15:42:12 -0700

The North American Securities Administrators Association, NASAA, has compiled a list of the top ten way that investors get involved in investment scams. It is important for all investors to be aware of the variety of scams that are out there. Bob Webster, a spokesman for NASAA, says "no one is immune to these schemes. We put out this list every year to try to keep one step ahead of the con artists. We want people to remain vigilant."

Before Choosing an Investment, Check Securities Fraud Watch List

Former Wall Street Banker Admits Fraud

Mon, 28 May 2007 00:12:14 -0700

Bert Fingerhut, a former Wall Street investment banker and part-time resident of Aspen, Colorado, has pleaded guilty to conspiracy. Fingerhut and several acquaintances improperly bought stock when mutual banks went public. Federal authorities say that the men cheated investors of 65 mutual banks more than $12 million over the last ten years.

Former Wall Street banker admits role in $12 million fraud

SEC Will Work to Return Funds to Victims of Stock Fraud

Fri, 25 May 2007 23:45:48 -0700

Christopher Cox, the chairman of the Securities and Exchange Commission, said that he has ordered the creation of a new office that will return money lost by investors affected by stock fraud. Congress decided to allow the SEC in 2002 to distribute the fines ordered of those who defraud investors to victims. Cox says that the SEC will "very soon" distribute about $3.4 billion owed to investors.

SEC to Focus on Returning Funds to Victims of Stock Fraud

Ex-US Foodservice Executive Jailed for Securities Fraud

Thu, 24 May 2007 20:40:45 -0700

Mark Kaiser, the former chief marketing officer of U.S. Foodservice, was sentenced to ten years in jail for securities fraud. U.S. Food overstated its earnings by more than $1 billion because of the fraud that was going on. U.S. Foodservice is one of the largest distributors of food products in the United States.

Doctors Charged in $30.5 M Surgery Scam

Wed, 23 May 2007 19:25:46 -0700

Three doctors were charged on Wednesday because they allegedly participated in a "rent-a-patient" scam that cost investors millions of dollars. Prosecutors say that Unity Outpatient Surgery Center found patients from across the country. These patients then underwent unnecessary surgery for money or low-cost cosmetic procedures. Dr. Michael Chan, an obstetrician from Cerritos, Dr. William Hampton, a surgeon from Seal Beach, and Dr. Mario Z. Rosenberg, a gastroenterologist, were arrested on Wednesday. Bail for the men ranged from $1 million to $2.3 million.

SoCal Doctors Charged in $30.5 Million Surgery Scam

Tyco Pays to Settle Fraud Suits

Tue, 22 May 2007 13:28:32 -0700

The industrial company Tyco International Ltd. has agreed to pay three billion dollars in order to settle shareholder lawsuits alleging securities and accounting fraud by its former management. The agreement has been reached after a five year legal battle and is related to Dennis Kozlowski's actions. Kozlowski currently is serving a 25-year jail term for having stolen hundreds of millions of dollars from the company. Tyco says that it is setting up a $2.975 billion cash fund to compensate investors. Lawyers for the plaintiffs say that by the time the accord is approved in court, the fund could increase to over three billion dollars.

Tyco to pay 3 billion dollars to settle fraud suits