Recently in Securities Law Category
The Securities and Exchange Commission has charged six former Fannie Mae and Freddie Mac executives with securities fraud alleging that the executives knew and approved of untrue or misleading statements regarding the companies' exposure to risky investments such as subprime loans. As part of the indictments, Fannie Mae and Freddie Mac have signed Non-Prosecution Agreements with the SEC whereby the companies agreed to accept responsibility for their actions.
Disbarred Fort Lauderdale, Fla. lawyer Scott Rothstein pleaded guilty to felony Ponzi scheme charges today, admitting that for approximately five years, he engaged in approximately $1.2 billion dollars of fraudulent and bogus investment schemes.
According to the plea agreement (you can read it below), Rothstein admitted that he engaged in a criminal racketeering scheme to use his position as a lawyer and law firm Rothstein Roenfeldt and Adler, P.A.'s ('RRA') purported success "and his standing in the community to lure potential investors in order to convince them to" invest in non-existent sexual harassment and whistleblower cases. He falsely told investors that "confidential settlement agreements" could be bought pre-litigation, i.e, before any lawsuit was ever filed.
In reality, no such clients or pre-litigation cases ever existed.
Just up Broadway Ave., at the District Court for the Southern District of New York, however, Judge Jed Rakoff rejected a proposed settlement agreement between the Securities and Exchange Commission and Bank of America, and upbraided the SEC for its "cynical" handling of the case.
Most of the time, 10-Ks, 10-Qs, and annual reports can be pretty dull stuff. At least that's what a new SEC Inspector General's report on why the agency failed to 'discover' Madoff's Ponzi scheme suggests.
But every once in a while, the seemingly dry and monotonous business of regulating financial trading and securities enforcement comes alive.
Like when S.E.C. officials failed discover Madoff's securities fraud and criminal wrongdoing despite a host of formal complaints made between 1992 and 2008.