A Bernard Madoff friend and early investor finds himself in the midst of a hard-fought legal battle to salvage what is left of his multimillion-dollar fortune.
Carl Shapiro, 96, who founded the Kay Windsor women’s apparel firm, is being accused by trustee Irving Picard that he benefited from fictitious profits.
Shapiro faces a potential “clawback” of some of those earnings, which may result in a lawsuit.
He is also reportedly the subject of the continuing federal criminal investigation stemming from Madoff’s estimated $21-billion Ponzi fraud.
A jury in Boston has ruled that a former Fidelity employee illegally profited from trading stocks that the mutual fund giant was buying for itself.
The jury found that David Donovan engaged in insider trading in Covad Communications Group Inc by giving his mother tips about nonpublic information about the company.
Donovan obtained confidential information from Fidelity’s internal order database which showed that Covad was buying a big chunk of the technology company.
The case marks a major win for the SEC at a time the agency has been criticized for having failed to detect several Ponzi schemes.
The SEC is also investigating derivatives trading and credit default swaps as they continue to uncover cases of insider trading.
Previously, regulators only looked at stock swaps as they looked for instances of insider trading.
Members of the Securities and Exchange Commission, as well as state and federal criminal authorities are actively pursuing insider trading cases involving hedge funds, too, according to a Reuters report.
Earlier this month, the Obama Administration funded a task force to investigate such cases as public pressure mounts to bring an end to Wall Street fraud and disregard for the law.
A lack of oversight at the SEC is partially blamed for the rampant cases of investor fraud.
The beginning of the holiday season is also a prime time for cyber-criminals looking to commit identity theft and fraud.
According to the 2009 State of the Net Survey from Consumer Reports, online scams that included identity theft and fraud cost consumers $8 billion over the past two years.
Online shoppers can protect their computers and personal information by avoiding suspicious e-mail links, updating security software, shopping on secure networks, changing passwords and using common sense.
Security technology company McAfee, Inc has also posted a “Twelve Scams of Christmas” to warn consumers.
Federal and state authorities have filed at least 140 lawsuits against people running bogus “foreclosure rescue” and “loan modification” businesses.
According to Courthouse News Service, the Federal Trade Commission made this announcement recently in an attempt to show it’s cracking-down on such business behavior.
In the wake of millions of home foreclosures, and the prospect of millions more, businesses have seemingly grown overnight that offer alleged rescues from a mortgage a homeowner can’t afford. Offering to take-over payments for a home in exchange for a one-time fee and then monthly payments, it then becomes incumbent upon the mortgage-rescue company to pay back the home loan.
Fraudulent companies in this industry bilk homeowners for these fees and months of discounted and affordable mortgage payments, but fail to actually pay on the loan. The homes eventually go into foreclosure and the companies go into hiding.
A federal judge has sentenced a suburban Detroit man for his role in a 2005 stock fraud scheme that netted him $2.7 million.
Alan Ralsky was described as one of the world’s most prolific senders of spam e-mail to more than four years in prison
Ralsky plead guilty in June to fraud and acknowledged that he sent millions of unsolicited e-mails trying to influence Chinese stock prices.
He said his company specialized in mass Internet mailings, and he entered the business with good intentions.
The SEC is urged to revise the process for rating investment advisers after designating Bernard Madoff’s firm a “medium risk” and missing his Ponzi scheme.
Agency examiners set the rating for Bernard L. Madoff Investment Securities LLC when the firm registered in 2006 after repeated investigations.
Madoff’s firm, which should have been designated “high risk,” collapsed two years later without being examined.
The Office of Compliance Inspections and Examinations should have subjected Madoff’s firm to the three-year examination cycle, according to the report.
An online marketer of purportedly “free” Internet auction kits has agreed to settle with the FTC charges that its actions violated federal law.
Commerce Planet automatically charged unwitting consumers $59.95 a month for enrollment in an “online supplier” program for Internet auctions.
The separate proposed court settlements with the company and two of its former executives bar them from similar deceptive conduct in the future.
In addition, the settlement requires them to make specific disclosures to ensure consumers are aware of any recurring-fee plans.
The proposed court settlements also require the settling defendants to pay a total of what could be more than $1 million.
According to an AP report, the independent law firm network Pre-Paid Legal Services Inc. is being sued by the Federal Trade Commission over its identity theft program.
The company said regulators believe its claims about its identity-theft program are misleading.
Pre-Paid Legal Services promises to monitor a customer’s credit score and report, and that it will alert them to any unusual activity. The company then offers to restore a customer’s credit score.
The FTC started a formal investigation into Pre-Paid Legal Services in 2007 and recently sent a letter and its proposed charges against.
The company told AP that it voluntarily edited the marketing claims made by its Identity Theft Shield and Affirmative Defense Response System.
President Barack Obama has picked two prospective commissioners to fill vacancies at the Federal Trade Commission.
According to a Reuters report, Obama selected North Carolina deputy attorney general and its chief consumer watchdog Julie Brill, and attorney Edith Ramirez for the positions.
Ramirez has represented companies like Mattel Inc. and Northrop Grumman Corp., working at a Los Angeles firm.
Brill worked as a consumer watchdog for North Carolina, focusing on antitrust issues in the state.
The FTC is currently investigating antitrust issues in the pharmaceutical industry and the mergers of Wyeth and Pfizer, as well as Schering-Plough and Merck.
Last week, CVS Caremark revealed that it was under FTC antitrust investigation.