Jon Horvath, an ex-research analyst at a New York hedge fund, has pled guilty to two counts of securities fraud and one count of conspiracy to commit securities fraud related to a $61.8 million insider trading scheme. Several other former hedge fund managers and analysts from different investment firms and…
A Financial Industry Regulatory Authority panel says that Merrill Lynch (MER) has to pay Michele and Robert Billings $1.34 million for allegedly misrepresenting the risks involved in preferred shares of Fannie Mae. The couple, who used to own a pest control business, placed $2.3 million in the shares in 2008…
After months of tensions with Citigroup’s (C) board of directors, Chief Executive Officer Vikram Pandit has turned in his resignation. Taking his place as CEO will be Michael Corbat. According to several sources, Pandit’s decision to leave comes after months of tension with Chairman Michael O’Neill over numerous issues, including…
JPMorgan Chase (JPM) must pay the trust of oil heiress Carolyn S. Burford $18 million for the “grossly negligent and reckless” way that the financial firm handled the account. In Tulsa County District Court in Oklahoma, Judge Linda G. Morrissey said that beneficiary Ann Fletcher was persuaded to invest in…
FINRA is fining Guggenheim Securities, LLC $800,000 for allegedly not supervising two collateralized debt obligation traders accused of hiding a trading loss. The traders are Alexander Rekeda and Timothy Day. Rekeda, who is the financial firm’s ex-CDO Desk head, has to pay $50,000 and is suspended for a year. Day’s…
Two former Linkbrokers Derivatives brokers have been arrested on criminal charges of securities fraud, wire fraud, and conspiracy to commit securities fraud. Benjamin Chouchane and Marek Leszczynski, along with others, are accused of taking part in a securities scam that cost customers $18.7 million. It involved the brokers secretly raising…
According to Commodity Futures Trading Commission Bart Chilton, the financial system needs to undergo a “cultural shift” that should include employing a risk-based compensation structure instead of one that is “purely profit-based.” Speaking at the Hard Assets Investment Conference last month, Chilton said that bonus systems and incentives create a…
According to the U.S. Court of Appeals for the Sixth Circuit, the Securities Litigation Uniform Standards Act bars state law breach of contract and negligence claims related to the way the plaintiffs’ trust accounts were managed. The appeals court’s ruling affirms the district court’s decision that the claims “amounted to…
LBBW Luxemburg SA has filed a securities fraud lawsuit against Wells Fargo & Co. (WFC) and its unit Wachovia Corp. over an alleged $1.5 billion securities fraud scam. The case involves transaction in 2006 involving Wells Fargo selling what they allegedly touted as securities with high ratings to LBBW and…
NY Attorney General Eric Schneiderman is suing J.P. Morgan Chase & Co. (JPM) over MBS fraud that was allegedly committed by its Bear Stearns unit. This is the first securities lawsuit to be brought under the sponsorship of the Residential Mortgage-Backed Securities Working Group, which is made up of prosecutors…