Daily Archives: September 10, 2015

Citigroup Said Courting Puerto Rico Creditors for Debt Talks

Citigroup Inc., which is helping to oversee the financial restructuring of Puerto Rico’s development bank, is reaching out to a group of large bondholders to lay the ground work for confidential debt talks, according to two people with knowledge of the matter.

The New York-based bank is seeking to establish goals for negotiations that would rope in as many as seven hedge funds that own the debt issued by the Government Development Bank for Puerto Rico, said the people, who asked not to be named because the information is private. The Puerto Rico government unveiled its restructuring outline on Wednesday.

Citigroup is the lead broker-dealer for the reorganization of debt issued by the GDB and other parts of the U.S. territory, meaning it’s responsible for structuring the obligations and facilitating the transactions. It has been talking with members of a group of bondholders represented by the law firm Davis Polk & Wardwell LLP and the financial advisory firm Ducera Partners, the people said.

Read on.

D.C., Bank of America will go to prison to depose city’s biggest thief

The District government’s attempt to collect more than $100 million fromBank of America for allegedly failing to stop the biggest embezzlement scheme in the city’s history is shifting to prison.

The Federal Bureau of Prison’s medium-security penitentiary in Marianna, Florida, to be exact.

That’s where ringleader Harriette Walters, a former mid-level manager in D.C.’s Office of Tax and Revenue, is currently serving a 17-year sentence for organizing the theft of nearly $50 million from the District’s treasury. D.C. Superior Court Judge Frederick Weisberg has ordered Walters to sit for a 12-hour videotaped deposition. No date for the deposition has been scheduled.

For roughly 20 years, Walters used her position in OTR to create and process false and fraudulent real estate tax refund checks, converting those to cash or checks that were then deposited in bank accounts that she and her cohorts controlled.

The scam unraveled in 2007, after Bank of America — where D.C. maintained its property tax refund account — discovered one of its employees, assistant branch manager Walter Jones, was engaged in unauthorized and irregular deposits and withdrawals. Jones was fired, forcing Walters and her conspirators to shift to other financial institutions. When Walters’ niece, Jayrece Turnbull, attempted to deposit a $410,000 refund check at SunTrust, bank officials there immediately became suspicious and launched an investigation that was ultimately turned over to the FBI. (Jones was latersentenced to 78 months in prison; Turnbull was sentenced to nine years in prison).

On Oct. 31, 2008, the District filed a multicount lawsuit against Bank of America (NYSE: BAC), alleging the bank was complicit in the scheme by not enforcing safeguards, violating its agreements with the District and not exercising “ordinary care to prevent this fraud from occurring and continuing.” The city sought roughly $117 million.

Attorneys for Bank of America, represented by McGuireWoods, were not available for comment for this story.

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BREAKING: ‘Stalker’ Wall Street CEO Arrested Over Securities Fraud

Law360, New York (September 10, 2015, 11:31 AM ET) — Private equity CEO Benjamin Wey, who recently was found liable for harassing and defaming an intern at his New York Global Group concern, was arrested for allegedly manipulating shares tied to China-based “reverse merger” transactions, federal prosecutors said Thursday.

Benjamin Wey, right, has been charged with offenses including conspiracy, securities fraud and wire fraud. (Credit: AP) Wey, 43, was charged with offenses including conspiracy, securities fraud and wire fraud, along with a Geneva, Switzerland-based banker named Seref Dogan Erbek, 53, who remains at large, Manhattan U.S….

Source: Law360

DOJ memo taking“six key steps” to strengthen its pursuit of individual corporate wrongdoing

Too little to late.. I am not holding my breath on this.. The Obama Administration has only less than 2 years left…

Housingwire:

In a memo authored by Deputy Attorney General Sally Yates and addressed to all other assistant attorney generals as well as all U.S. attorneys, Yates said that the DOJ is taking “six key steps” to strengthen its pursuit of individual corporate wrongdoing, including requiring companies to provide the DOJ with all information related to misconduct, including the individuals involved, in order to qualify for any cooperation credit.

In the memo, which obtained by the New York Times andcan be seen here, Yates lays out series of new policies that will prioritize the criminal and civil prosecution of individuals over the prosecution of companies.

All This Misbehavior, and No One Is Guilty!

In last week’s post, I shared the op-ed that I co-authored with Allen West, President and CEO of the National Center for Policy Analysis (NCPA), We Must Learn From the 2008 Crash or Repeat It …Soon.
In the op-ed we pointed out that several recent indicators were somewhat alarming: the recent stock market roller coaster, the Fed’s policy of near-zero interest rates which are leading to more inflation of assets, the rise of household debt, and other factors, each of which seem to be leading us to another crash.
We talked about how lobbyists are politicking Capitol Hill, gutting regulations meant to control the large banks; how the big banks are getting bigger, and the smaller community banks are fast disappearing. Perhaps the most ominous factor we discussed is the lack of prosecutions of the very financial institutions which got us into this mess in 2008.
Evidence of this is rampant. Yet, I was struck by the irony of how many are writing about this, how many are talking about the lack of prosecutions. However, little is being done to correct this situation.
Have the capacity to steal and you get away with it. No wait…you are rewarded!
Regards,
Richard

Firms at risk of losing pension business because of LIBOR convictions

The Department of Labor is tentatively denying affiliates of Deutsche Bank AG, UBS AG and Royal Bank of Scotland Group the right to serve U.S. retirement plan clients because of criminal convictions related to LIBOR manipulations and other charges.

Money managers whose firms, parents or affiliates are convicted on criminal charges must seek individual exemptions to serve as qualified professional asset managers for pension fund clients from the DOL, which has faced increased criticism about its process and the granting of QPAM exemptions.

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DOJ to focus more on executives, not just companies, in criminal cases

And how many times have I heard the DOJ under the Obama Administration said they will focus on executives and not companies in criminal cases??? You are 7 years too late and a dollar short!!!

The U.S. Justice Department has issued new guidelines that emphasize prosecuting individual executives in white-collar crime cases, and not just their corporations.

Deputy Attorney General Sally Yates, author of a memo outlining the rules for federal prosecutors, was to announce the guidelines in a speech on Thursday at the New York University Law School.

The memo, first obtained by the New York Times, came in response to criticism that the Obama administration had not vigorously pursued individuals in the financial meltdown and housing crisis of 2008-2009 and in various corporate scandals, the newspaper said.

“Crime is crime,” Yates planned to say in her address, according to excerpts released by the Justice Department.

“And it is our obligation at the Justice Department to ensure that we are holding lawbreakers accountable regardless of whether they commit their crimes on the street corner or in the board room,” she added. “In the white-collar context, that means pursuing not just corporate entities but also the individuals through which these corporations act.”

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