Ex-Enron exec gets 16-month prison sentence

The former chief executive of Enron‘s broadband business was sentenced to 16 months in prison for lying to shareholders and wire fraud.

Authorities said Joseph Hirko, then in charge of Enron’s telecommunications development. He pleaded guilty last year to a single count of wire fraud.

The Houston-based Enron collapsed for all to see in 2001 after an accounting scam exposed the company’s massive fraud.

About four years after the collapse, Hirko and other executives stood trial on charges on securities fraud, wire fraud, insider trading and money laundering. That ended in a mistrial with Hirko finally pleading guilty on the one charge of wire fraud.

Hirko allegedly lied repeatedly to investors and shareholders about the validity of Enron’s wealth, particularly in its broadband division.

Picard Sets to Sue Madoff Relatives

Court-appointed trustee Irving Picard plans to sue Bernard Madoff’s two sons, his niece and his brother this week, seeking the return of $198 million.

The lawsuits will accuse the four family members of breach of fiduciary duty and negligence, among other charges.

The trustee and his lawyers have already filed 13 suits seeking to recover about $15 billion, including one against Mr. Madoff’s wife, Ruth.

Madoff confessed to one of the largest frauds in Wall Street history in December and is currently serving a 150-year prison sentence.

SEC going to trial over Bank of America bonus lies

The Securities and Exchange Commission is taking Bank of America to trial on charges it lied to shareholders about $6 billion in bonus payments made to employees of Merrill Lynch.

Each of the companies have fallen on catastrophic economic times, falling on public money to “bail out” the failed businesses.

A judge rejected a previous SEC proposal on a $33 million civil settlement last week.

As this news was breaking, Bank of America was attempting to deflect the negative press it was getting. Trying to re-route the attention, Bank of America said it was cutting ties with ACORN, the embarrassed public advocacy group embroiled in an undercover tax evasion scheme.

Dish Network, Authorized Dealers Charged with Telemarketing Violation

Two authorized dealers of Dish Network have agreed to settle charges that they violated the FTC’s Telemarketing Sales Rule by calling consumers whose numbers are on the Do Not Call Registry.

The final court orders are against Vision Quest, LLC, and its principal Brian K. Cavett, and against New Edge Satellite, Inc., and its principal Derek LaVictor.

The court orders impose a $690,000 civil penalty against Vision Quest and Cavett, and a $570,000 civil penalty against New Edge Satellite and LaVictor.

The penalties have been suspended because of the defendants’ inability to pay.

The U.S. Department of Justice has also charged Dish Network itself with violating the Telemarketing Sales Rule, both on its own and through its authorized dealers. The lawsuit against Dish Network is still in litigation.

Nadel may get released on reduced bond

Jailed hedge fund manager Arthur Nadel appears closer to getting out of prison before his trial.

Nadel is being held in New York on charges he bilked investors out of at least $330 million in a Ponzi scheme.

In January, Nadel fled his Sarasota, Fla., home, just a day before he was supposed to pay out dividends on investments to numerous people. He remained on the lam for two weeks before surrendering to authorities. He’s been in jail ever since.

In those eight months, Nadel has had most of his assets frozen and he was unable to post bond to secure his release from custody. He and his wife have fought for the lavish settings they purchased with seemingly ill-gotten money.

Now, allegedly in poor health, Nadel is close to securing a discounted $1 million bond arrangement, which would give him freedom – albeit short-lived – until he faces his criminal charges.

Court authorities had set a high bail on Nadel as he was deemed a flight risk. Authorities believe Nadel has money burrowed away, and his previous behavior before his surrender suggests he would leave.

FINRA Debates on Release of Madoff Report

The Financial Industry Regulatory Authority board may decide to keep their report on Bernard Madoff under lock and key, not letting it be seen by the outside world.

The FINRA board led the review after Madoff confessed to operating a $65 billion Ponzi scheme and Stanford was accused of running a $7 billion fraud through a Caribbean bank.

The board formed the committee to review the examination program “in light of the Madoff and Stanford cases.” A draft was shared with the board, which will decide whether to release it.

The SEC brought tremendous embarrassment on itself when it released a damning report on its own handling of the Madoff case.

Barney Frank wants to downsize scope of new consumer agency

Massachusetts Rep. Barney Frank believes the scope and power of President Barack Obama’s new consumer protection regulatory agency before it even begins working.

The usually outspoken Frank said his initiative is designed to head-off some of the criticisms of the proposed new regulatory agency which has the main goal of spotting fraud trends and warning consumers ahead of time – essentially the goal of any regulatory agency. The goal of this proposed regulatory arm is to mainly watch financial institutions.

Frank is asking that oversight of many non-financial institutions not be included.

To his credit, regulators like the CPSC and FDA have been criticized for being under-staffed and under-funded.

However, Frank is interested in removing physicians, lawyers, auto dealers and other businesses that deal third-party with financial institutions, including banks and insurance companies.

FTC Looks into Food Marketing Directed at Kids

The Federal Trade Commission is seeking public comment on its proposal to conduct a new study on food marketing to kids and adolescents.

It seeks to get information from 45 food, beverage and fast food restaurant companies in regards to their to nutritional content and marketing practices.

The study will include companies’ child-targeted marketing activities and expenditures, including websites, digital ads, and viral advertising as well as more traditional means.

The study is prompted by growing concern over childhood obesity, which is fast becoming the nation’s top health risk.

FTC may re-write rules on “free trial” programs

The Federal Trade Commission is currently reviewing the validity of numerous “free trial” offers available to consumers.

So-called free trial offers inundate consumers every day, if not every hour, on the Web. The FTC hasn’t changed rules regarding negative-options marketing since the mid-1980s.

Negative-options marketing includes offers where a consumer receives a “free” item up-front, but then must cancel any future subscriptions or deals to opt out of the plan. These became popular during the 1980s with the advent of music and book clubs. Back then however, consumers were sent those future materials and then had the option of returning the item and canceling the club membership.

Today, though, consumers can sign up for free samples of products or free credit reports, but then are systematically charged on a credit card for another service, which they may not have known was being offered in exchange for the free item.

FTC Warns Against Natural Disaster Charity Scams

The FTC is warning consumers to use caution when donating to charities that claim to help victims of the devastating California wildfires.

While many legitimate groups help victims, scam artists may take advantage of the disaster by creating bogus fundraising operations.

The FTC advises consumers to research the companies asking for donations, see if the company is registered as a charitable organization, and ask questions.

In addition, the FTC warns against giving cash donations, and to keep records of donations given or pledged.