Daily Archives: June 24, 2014


Ex-Madoff accountant pleads guilty to aiding fraud

Ex-Madoff accountant pleads guilty to aiding fraud

Paul Konigsberg, 78, a former senior tax partner at Konigsberg Wolf & Co, pleaded guilty to one count of conspiracy and two counts of falsifying the records of a broker-dealer before U.S. District Judge Laura Taylor Swain in New York. He also agreed to forfeit $4.4 million.

He became the 15th person to plead guilty or be convicted at trial in connection with the fraud.

“I’m here today to take responsibility for what I did wrong,” Konigsberg told Swain. 

He said he had worked with others at Madoff’s firm to manipulate customer account statements, including by backdating transactions, and then filed false tax returns based on those amended statements.

But he said he had not been aware that Madoff’s entire investment advisory business was a massive fraud.


Credit Suisse : Ex-Credit Suisse trader spared prison for faking mortgage prices

Credit Suisse : Ex-Credit Suisse trader spared prison for faking mortgage prices

A former London-based Credit Suisse Group AG trader was spared prison on Tuesday over his role in artificially inflating subprime mortgage bond prices, in one of the few U.S. criminal prosecutions stemming from the financial crisis.

The former trader, David Higgs, who pleaded guilty in 2012 to a conspiracy charge, was ordered to forfeit $900,000 to the government and pay a $50,000 fine by U.S. District Judge Alison Nathan in New York.

According to the office of Manhattan U.S. Attorney Preet Bharara, Higgs provided “extremely substantial assistance” after agreeing to cooperate with prosecutors.

Another Credit Suisse trader, Salmaan Siddiqui, also pleaded guilty in 2012 and is scheduled to be sentenced this month.


N.Y State Regulator Taps TARP Ex-Watchdog Barofsky to Monitor Credit Suisse

N.Y State Regulator Taps TARP Ex-Watchdog Barofsky to Monitor Credit Suisse


Neil Barofsky was a government gadfly who made a career of needling, and at times pillorying, Wall Street and Washington over the 2008 bank bailouts.

Now a partner at a private law firm, without access to power he once wielded as a federal prosecutor, he has managed to secure a familiar role: watchdog for one of the world’s biggest banks.

New York state’s financial regulator is close to picking Mr. Barofsky as the corporate monitor for Credit Suisse, according to people briefed on the matter, after the bank’s guilty plea to helping American clients evade taxes. Credit Suisse, the first bank of its size and significance to strike a plea deal with federal prosecutors in more than two decades, agreed to hire a monitor as part of a related settlement with the New York regulator, the Department of Financial Services.


HUD fines Philadelphia real estate company for racial discrimination

HUD fines Philadelphia real estate company for racial discrimination

The U.S. Department of Housing and Urban Development has fined Brotman Enterprises, a Philadelphia-area real estate company, for racial discrimination.

Employees of Brotman Enterprises allegedly steered white testers posing as rental applicants to safer neighborhoods, while steering black testers to one of the company’s properties in a “high-crime, less desirable” neighborhood.

The case was brought to HUD’s attention by the National Fair Housing Alliance, which filed a complaint alleging that Brotman Enterprises was “unlawfully denying housing opportunities to African-American home seekers.”

Politicians For Sale? There’s An App For That

Visit The Greenhouse app page here

And here is the 16-year-old programmer’s credo:

It is my hope that providing increased transparency around the amount and source of funding of our elected representatives may play a small role in educating citizens and promoting change. If you use the extension when reading about a Congressional vote on energy policy, for example, maybe you’ll discover that a sponsor of a bill has received hundreds of thousands of dollars from the oil and gas industry. Or maybe you’ll learn that the top donors to a member of Congress who opposes tort reform are lawyers and law firms. I use data from the last full election cycle (generally 2011-12 for Representatives and 2007-12 for Senators) and plan to update it as more relevant data becomes available. Special thanks to OpenSecrets.org for providing access to that data.

The motto of Greenhouse is: “Some are red. Some are blue. All are green.” What it signifies is that the influence of money on our government isn’t a partisan issue. Whether Democrat or Republican, we should all want a political system that is independent of the influence of big money and not dependent on endless cycles of fundraising from special interests. The United States of America was founded to serve individuals, not big interests or big industries. Yet every year we seem to move farther and farther away from our Founders’ vision.


BadHawk DOWN . . . OCWEN stock price plunges on news of their subsidiary being…”shut out of a distressed loan auction”

BadHawk DOWN . . . OCWEN stock price plunges on news of their subsidiary being…”shut out of a distressed loan auction”

It hasn’t been a good day for Altisource Asset Management Corp (AAMC). In fact, the day is looking downright catastrophic. The company’s stock is currently trading at $840 per share, which is down more than $259 for the day. The company’s stock has lost more than 30% of its value in less than four hours of trading.

The precipitous fall comes on the heels of reports that the company’s affiliate, Altisource Residential (RESI), was shut out of a distressed loan auction from the U.S. Department of Housing and Urban Development. According to a statement from HUD, Lone Star Funds was the sole winner of the auction, with a weighted average bid of 77.6% of the collateral value.

HUD said that this was the first time in the history of its Distressed Asset Stabilization Program that a single bidder submitted the highest bid on “each and every pool.”

HUD said that the sale involved a total of 23,000 defaulted single-family loans with $3.9 billion in unpaid principle. The auction consisted of 16 pools of loans, varying in size from $93 million to $1 billion.

HUD also noted that there were 68 “qualified bidders” and that 27 investors submitted 163 bids on the pools, for an average of 10 bids per pool.

“The sale was the most competitive sale to date, drawing a larger number of bidders and bids per pool than previous sales,” HUD said in the statement.

Click here to see the full statement from HUD.

HUD also noted that the sales price has risen from previous DASP auctions, from approximately 50% to the 77.6% winning bid from Lone Star Funds.

Although not confirmed, it is believed that Altisource Residential was one of the bidders in the auction and was shut out, as were all of the other bidders.

The day hasn’t been kind to Altisource Residential either as its stock is down currently 3.02 points (11.78%) for the day.

So what’s wrong at Altisource?

In recent months, Altisource and its affiliates have come under fire from the superintendent of New York State’s Department of Financial Services, Benjamin Lawsky, over the company’s handling of its own distressed property auctions.

In April, Lawsky sent a letter to Altisource’s affiliated companyOcwen Financial Corporation (OCN) questioning its relationship with Altisource Portfolio (ASPS) and its subsidiary, Hubzu, which Ocwen uses as its principal online auction site for the sale of its borrowers’ homes facing foreclosure, as well as investor-owned properties following foreclosure.  

“The relationship between Ocwen, Altisource Portfolio, and Hubzu raises significant concerns regarding self-dealing. In particular, it creates questions about whether those companies are charging inflated fees through conflicted business relationships, and thereby negatively impacting homeowners and mortgage investors,” Lawsky wrote at the time.


Government vs. Government: SEC Sues House Committee for Documents

Government vs. Government: SEC Sues House Committee for Documents

WASHINGTON (CN) – The SEC sued the House Committee on Ways and Means in Federal Court, demanding documents for the SEC’s investigation of alleged inside trading in Humana stock.
     The SEC also sued Brian Sutter, staff director of the Ways and Means Committee’s Health Subcommittee.
     The SEC is investigating whether changes in Medicare and Medicaid reimbursement rates were illegally leaked to the public, or traders, who jumped on the news to reap illegal gains by trading in stock of companies that would be affected.
     “The Commission is investigating whether material nonpublic information concerning the April 1, 2013 announcement by the U.S. Centers for Medicare and Medicaid Services (‘CMS’) of 2014 reimbursement rates for the Medicare Advantage program was leaked improperly to certain members of the public in advance of CMA’s announcement, and whether such action resulted in insider trading in violation of the federal securities laws,” the complaint states. “As part of its formal investigation, the Commission properly served respondents with the subpoenas, which seek documents and testimony critical to the Commission’s investigation.”
     The Committee and Sutter refused to comply with the subpoenas, claiming that they are “repugnant to public policy,” vague and overbroad, unconstitutional, “and that one agency of the federal government is somehow barred by sovereign immunity from fulfilling its statutory duty to investigate violations of the federal securities laws.”
     The SEC says that all of these objections “lack merit.”