• Lawyer: Ernst auditing helped sink Hinsdale’s Superior Bank – Plaintiff Alan Schein is still claiming conspiracy on E&Y’s part. [Daily Herald]
• Securities Lawsuits Plummet in 2009 – Because they’ve all been filed already [CFO.com]
• Stanford case spreads its tendrils – For a Ponz that simply offered CD’s with out of this world interest rates, the international law and jurisdictional aspects will turn your head in knots. [FT.com]
• TD Ameritrade Settles Securities Case – “TD Ameritrade Inc. agreed to buy back $456 million of auction-rate securities from its clients as part of a settlement with New York Attorney General Andrew Cuomo, the Securities and Exchange Commission and Pennsylvania securities regulators.” [WSJ]
Tag: Ponzi Schemes
The SEC Has Now Mastered the Art of Stating the Obvious
Another press release from the SEC today stating how they’ve thwarted yet another Ponzi scheme.
Ponzis being the norm lately we’re not terribly impressed by this but what we did find surprising was the title of the Commission’s press release: “SEC Freezes Assets of Florida Resident Stealing Investor Funds for Luxury Purchases” (that’s our emphasis).
Is the Commission making the assumption that those individuals that are actually reading the press releases need informed about what the money stolen is actually used for? Seriously, Bernie and Big Al don’t strike us Robin Hood types, even before indictments were handed out. No where in Bern’s statement at sentencing did he state:
Your honor, I’ve become increasingly despondent about the wealth gap in this country. I stole from the wealthiest individuals, investment companies, and charities possible in order to help the people that couldn’t help themselves. It was not my intention to take all my clients’ money. I merely wanted to level the playing field. I thought this method would be most effective as opposed to raising tax rates on the rich, which I’m personally opposed to.
Didn’t hear that did you? Let’s break this down: Bernie liked handjobs(and God knows what else, shudder) and Aston Martins. Stan liked doing bumps off hookers’ asses (we’re guessing here) and buying cricket teams (this is documented).
We will give the credit to the Commission for busting another scofflaw but we would now advise that knowing your reading audience is equally important.
SEC Freezes Assets of Florida Resident Stealing Investor Funds for Luxury Purchases [SEC.gov]
Because the Other Option was to Start Hocking the Stanford Financial Shwag Received for Opening a New Account
Your latest bit of hilarity regarding the Stanford Ponzi Party is that a group of plaintiffs is suing the government of Antigua and Barbuda for $24 billion because the island was allegedly a “full financial partner in the fraud”.
Alphaville isn’t buying it, and they not so accidently, put “Fraud Victims” in quotations which we find hilarious because it almost appears that Alphaville isn’t even buying the “victims” angle as so much as they’re buying the “morons” angle.
The post goes on to inform us that “$24bn is also 24 times Antigua’s 2008 GDP“. Which moves this particular case from the “frivolous” category to the “downright idiotic” category.
Nevertheless, one might conclude that any or all of the following is what got this thing off the ground:
1. Big Al is pulling the strings from jail in order to pay for his defense because, as we learned, he’s got no legit cash.
2. Ambulance Ponzi victim chasing attorney
3. Banana farmers in Antigua that really don’t have any alternative after getting shaken down by the EU.
So duped people are pissed and they want their money back. They have finally come to the conclusion that the original $8bil has been long ago spent on Scarface-size piles of blow and endless hours spent in houses of ill repute so they’re clutching at straws.
Our advice: Just sue the SEC already.
“Fraud victims” want $24bn from the government of Antigua and Barbuda [FT Alphaville]
Stanford CFO Enters Not Guilty Plea, To Plead Guilty Soon Enough
As expected, James Davis, Stanford Financial’s Chief Number-Maker-Upper has entered his not guilty plea but his counsel has stated that his client will plead guilty to all the charges against him as early as next week. The initial plea has been made in order to finalize the plea agreement with Davis prior to his pleading guilty
This is all occurring while Stan the Man’s attorneys are in New Orleans appealing a Houston judge’s ruling that he has to pump iron in prison throughout his trial. Stan’s attorneys continue to maintain that their client is NOT a flight risk, which is kinda like saying that Bernie Madoff is NOT in jail.
Ex-Stanford CFO to plead guilty within 2 weeks: lawyer [Reuters]
Your Daily (Seems Like It Anyway) New Ponzi Scheme Update
The SEC alleges that from at least June 2006 through January 2009, Provident [Royalties, LLC] made a series of fraudulent securities offerings involving oil and gas assets through 21 affiliated entities to more than 7,700 investors throughout the United States. Provident’s entities made some direct retail sales of securities, but primarily solicited retail broker-dealers to enter into placement agreements for each offering, and those retail broker-dealers sold the stock to retail investors nationwide.
Dudes were promising 18% returns and that 85% of funds would be invested in “interests in oil and gas real estate, leases, mineral rights, and interests, exploration and development.” SEC alleges that less than 50% of the funds received were used for such investments.
SEC Obtains Asset Freeze in $485 Million Nationwide Offering Fraud [SEC.gov]
Someone is Getting Testy
Allen Stanford is pissed. How on Earth can a man with those guns not be allowed to invoke his rights to counsel if you don’t let him get his mitts on some cash?
We’re not talking about a public defender here, judge. We’re talking downtown, probably wears a Stetson to the courthouse, Houston representation we’re talking about. Serious scratch.
“‘The government’s unfettered, and thus far successful, attempts to prevent Mr. Stanford from being able to mount a defence in his criminal proceedings amount to a deprivation of both his Sixth Amendment right to counsel and his Fifth Amendment privilege against self-incrimination,’ attorney Dick DeGuerin argued in in the filing.”
The judge is like, IDGAF: “Judge [David] Godbey replied to – and denied – that request last week, saying Sir Allen had ‘not shown that he has $10m dollars, or any lesser amount, in personal assets untainted by potential fraud.'”
Fine, but Stan would just like you to know that selling tickets to the gun show inside the joint doesn’t work the cons like it does the fine Texas ladies.
Stanford lashes out at federal prosecutors [FT.com]
Stanford CFO to Plead Guilty After Pleading Not Guilty
This after speculation earlier about whether Davis would flip. Looks like he’s going to sing:
James Davis, the former chief financial officer of Stanford Financial Group and who is facing charges related to an alleged $7bn fraud at the group, intends to plead guilty to the three charges against him, his attorney told the Financial Times.
Attorney David Finn, who is representing only Mr Davis, told the FT there would likely be a “procedural not guilty plea” entered at his arraignment, but that his client would ultimately plead guilty to the charges against him “once all the details are worked out.” Mr Davis is due to appear in court in Houston on July 13.
You got that ticket to hell stamped, Stan?
Stanford CFO James Davis “intends to plead guilty”, laywer [sic] says [FT Alphaville]
Stanford CFO Flipping?
Chief Financial Officer Bean Counter Number-Maker-Upper Officer at Stanford Financial, James Davis, is appearing in court Wednesday to answer fraud and conspiracy charges.
Davis has spent the last few months cooperating with prosecutors and may flip on Stan the Man regarding the small matter of some money gone missing.
No agreement has been reached yet for Davis but considering the number of years being handed out and Stan’s potential fate of multiple centuries in prison, he may at the very least, consider cooperating.
Stanford CFO to appear in court [Accountancy Age]
New Bail Hearing for Stanford Set for Monday Because He Just Might Split
Stan the Man will spend the weekend pumping iron in a Houston jail because all signs are kinda, sorta pointing to the possibility of him going on the lam after a judge granted the silver medalist in the Ponzi competition a measly $500,000 bail.
Stanford’s attorney called bullshit because “he had already shown the financier was no flight threat.”
Judge David Hittner didn’t buy it and remanded Stan to jail until Monday based on the evidence presented by prosecutors:
testimony from a pilot who flew Mr. Stanford to Libya and Switzerland before government officials raided his Houston offices; testimony from a friend of Mr. Stanford’s daughter who gave him $36,000 in cash, and claims that $100 million was withdrawn from a Swiss bank account Mr. Stanford controlled
C’mon, your honor, that’s just walking around money! My client can’t be expected to strut around without serious money on hand!
New Bail Hearing Set for Stanford [WSJ]
Madoff Feeders Getting Some Unwanted Attention
The SEC, feeling confident these days, has filed a complaint against Cohmad Securities Corporation and its Chairman, Chief Operating Officer, and one of the brokers, saying they “actively marketed Madoff investments while ‘knowingly or recklessly disregarding facts indicating that Madoff was operating a fraud.'”
Call us Captain Obv but that sounds like they were either dumb or in on the scam. Either way, they can’t be too psyched about it.
An additional complaint has been filed by the SEC against Stanley Chais, an investment adviser who put all of the assets he oversaw into casa de Madoff.
Irving Picard, who might have the most thankless job in America, also sued both Cohmad and Chais, because, you know, a few people want their money back. The trustee’s complaint against Cohmad spells it out:
The trustee’s lawsuit asserted that fees paid to Cohmad by Mr. Madoff were based on records showing the actual cash status of customer accounts — the amounts invested and withdrawn — without including the fictional profits shown in the statements provided to customers. When a customer’s withdrawals exceeded the cash invested, Cohmad’s employees no longer earned fees from that account — even though the customer’s statements still showed a substantial balance, according to the lawsuit.
This arrangement indicated that Cohmad and its representatives knew about the Ponzi scheme and knew that the profits investors were allegedly earning were bogus, according to the trustee’s complaint.
Good luck explaining that.
Brokerage Firm and 4 Others Sued in Madoff Case [New York Times]
SHOCKER: Doesn’t Appear that Stanford Auditors were Doing Any Auditing
Last week’s indictment of Allen Stanford has brought up the always popular question when fraud, occurs: “Who are the auditors that were asleep at the wheel of this disaster?”
Well, in this case, the auditors were a local UK two-person shop, CAS Hewlett, which must be Queen’s English for Friehling & Horowitz.
It doesn’t appear that CAS Hewlett has a website, but they’ve been doing the Stanford “audits” for at least 10 years, so obv they’re legit. PwC and KPMG both have offices on Antigua but Stanford preferred to stay with its “trusted firm”. Totally understandable.
And the best part? The founder of the firm, Charlesworth “Shelly” Hewlett died in January, approximately a month before the story broke on the Ponz de Stanford.
This all adds up to who-the-fuck-knows if audits were even occurring and for us to speculate if Shelly needed to get got because Stan knew that the poo and fan were coming together. Just sayin’.