Here is what we are reading today:
Madoff's Fmr Employee Confronted With Backdated Records (Bloomberg) - The woman who ran Bernard Madoff’s investment advisory business admitted she didn’t tell federal investigators in 2009 that her duties included backdating trades and turning stocks into bonds with a few pen-strokes. Annette Bongiorno, accused with four former colleagues of aiding Madoff’s $17 billion Ponzi scheme, acknowledged in cross-examination today that she omitted details of some of her biggest backdating projects when she was interviewed by the government after the con man’s arrest. She did so, even though she has claimed not to have known that backdating was illegal.
Study Finds SEC Staffers Sold Stock Of Companies Prior To Cases Being Disclosed (Bloomberg) - People working for the U.S. Securities and Exchange Commission who owned stock in companies under investigation were more likely to sell shares than other investors in the months before the agency announced it was taking enforcement actions, according to a new academic paper.
New York's AG Inventing New Insider Trading "Crime" (Bloomberg View) - Today Eric Schneiderman said his office has reached agreements with 18 financial-services firms, most of which are Wall Street banks, to "stop their practice of cooperating with analyst surveys administered by certain elite, technologically sophisticated clients at the expense of others." He said this practice "can put the market at large at an unfair disadvantage." And maybe he's right about that. But who said life is fair?
Mayor Trenton Removed After Conviction (WSJ) - A judge has removed the mayor of New Jersey's capital city from office 19 days after a jury convicted him of corruption. Trenton Mayor Tony Mack had fought to remain in office until he is sentenced to prison. That is scheduled for May, although Mr. Mack is also asking for the conviction to be thrown out. Judge Mary Jacobson on Wednesday rejected his arguments and signed an order removing him from office.
UNC Cheating Scandal and The Whistleblower Retaliation (BusinessWeek) - Mary Willingham had been feeding information since 2011 about academic fraud to a reporter with the News & Observer in Raleigh. The coverage had put UNC on the defensive. But rather than seriously investigate the connection between sports and classroom corruption, top university administrators used vague committee reports to obfuscate the issue. Willingham’s conversations with the elderly Friday hadn’t addressed the tradecraft of whistle-blowing. Still, he’d encouraged her to act on her concerns. “At his memorial,” she says, “I realized I had to speak up.” In November 2012, she went public with what she knew.
Fraud Trial Opens For Fmr Sentinel Management Group CEO (Chicago Tribune) - Eric Bloom was still in his 20s when he took over his father’s Sentinel Management Group Inc., a well-connected Northbrook money management firm known for always paying dividends on safe, reliable investments. But prosecutors say Bloom secretly began exposing his well-heeled customers to an increasingly risky mix of leveraged deals, leading to the company’s spectacular collapse in 2007 and the loss of more than half a billion dollars to about 70 investor groups.
Details Of $14M Whistleblower Award Revealed (WSJ) - A record $14 million whistleblower award paid by the Securities and Exchange Commission last year was for a tip about an alleged Chicago-based scheme to defraud foreign investors seeking U.S. residency, according to people familiar with the payment. The award is by far the biggest arising from a 2010 law designed in part to encourage tipsters to come forward with information about financial fraud. The SEC announced the payment in October without naming the whistleblower or the case, as the law gives tipsters the option to remain anonymous.
Chilean Shipping Company Pleads To Price Fixing (Maritime Exec) - CompaÃ±Ãa Sud Americana de Vapores S.A. (CSAV), a Chilean corporation, has agreed to plead guilty and to pay an $8.9 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced.
Five Indicted For Fraud Following Joplin, MO Tornado (KSPR) - A federal grand jury indicted five Joplin-area residents, in separate cases, for fraudulently receiving (or applying for) federal disaster benefits following the tornado that struck the city of Joplin on May 22, 2011. The tornado killed 158 people and caused more than $2.9 billion in damage
Woman Steals $1.2M From Non-Profit Over 9 Years (Penn Live) - A former employee of the Bon-Ton Stores Foundation will serve 5 years in federal prison in connection with a $1.3 million theft from the charitable group.
Federal Inmates In Morgantown Training Dogs For PTSD Veterans (BOP.gov) - In November 2013, FCI Morgantown began a Veterans-to-Veterans Service Dog Training Program. The service dog program will provide training and certification to 21 inmates who will become service dog trainers. The inmates have been carefully screened and selected for this particular training. All of them are military veterans and will be training dogs for veterans in the community who have mobility impairments and/or Post Traumatic Stress Disorder (PTSD).