January 14, 2010 |
The Securities and Exchange Commission named six people Wednesday to lead new investigative units as the agency reorganizes its enforcement efforts. The SEC was scorched by its failure to detect the stunning, long-running fraud by money manager Bernard Madoff despite numerous red flags and credible warnings. The new units and their leaders are: asset management, headed by Bruce Karpati and Robert Kaplan; market abuse, led by Daniel Hawke; structured and new products, Kenneth Lench; foreign corrupt practices, Cheryl Scarboro; and municipal securities and public pensions, Elaine Greenberg.
January 12, 2010 |
The host of a popular Persian-language radio talk show was accused by the U.S. Securities and Exchange Commission of defrauding investors out of more than $20 million in a long-running investment scheme that targeted the Iranian American community. In a lawsuit filed Monday in federal court in Los Angeles, the SEC accused John Farahi; his wife, Gissou Rastegar Farahi; and their company, NewPoint Financial Services, of losing millions of dollars in volatile investments they had promoted as safe.
December 9, 2009 |
Federal regulators sued Irvine brokerage Brookstreet Securities Corp. and its founder Tuesday, accusing them of systematically selling high-risk mortgage securities to customers with conservative investment goals. Brookstreet and its chief executive, Stanley C. Brooks, allegedly developed a program that offered the mortgage investments to more than 1,000 retirees and others for whom they were unsuitable, according to the lawsuit filed by the Securities and Exchange Commission. Through his attorney, Brooks denied wrongdoing and said he would contest the allegations.
December 8, 2009 |
Almost three years after New Century Financial Corp. collapsed in the first phase of the mortgage meltdown, three former executives of the Irvine company were accused by regulators Monday of misleading investors as its subprime loan business came unglued. New Century was the nation's second-largest lender to borrowers with spotty credit before its demise in April 2007 signaled an unfolding crisis in the mortgage and housing markets that set off a deep global recession. In a lawsuit filed in U.S. District Court in Los Angeles, the Securities and Exchange Commission accused Brad Morrice, a co-founder and former chief executive of New Century; Patti M. Dodge, its former chief financial officer; and David N. Kenneally, its ex-controller, of securities fraud.
October 13, 2009 |
KB Home, one of the nation's largest home builders, is under investigation by the Securities and Exchange Commission "regarding possible accounting and disclosure issues." The investigation opens a fresh round of scrutiny of the company. Its former chief executive, Bruce Karatz, is awaiting trial on federal charges he fraudulently manipulated stock options. In 2006, Karatz resigned after an internal investigation found he had backdated his own stock option grants to increase his pay. In 2008, Karatz agreed to pay more than $7 million to settle SEC charges but didn't admit wrongdoing.
September 15, 2009 |
In a rare move, a federal judge threw out a deal in which Bank of America Corp. would have paid $33 million to settle charges that it misled shareholders about $3.6 billion in bonuses being paid to Merrill Lynch & Co. executives, contending that the punishment was too light. U.S. District Judge Jed Rakoff in New York also lashed out at federal regulators, saying they didn't dig deeply enough to determine whether Bank of America executives intentionally set out to deceive shareholders about plans to pay bonuses to employees of Merrill Lynch last year, when the bank was acquiring the Wall Street firm.
September 3, 2009 |
As federal regulators probed Bernard L. Madoff's remarkably consistent investment returns, he was able to brush them off, in part, by claiming a magic touch. "Some people feel the market," he told Securities and Exchange Commission investigators in 2006, 2 1/2 years before his gigantic Ponzi scheme was discovered. "Some people just understand how to analyze the numbers they're looking at." Unfortunately for investors in Madoff's fund, some people at the SEC didn't understand how to analyze his numbers, according to an internal agency review.
September 1, 2009 |
The nation's top securities cop is raising concerns about the rich bonuses that some brokerages routinely offer to lure salespeople from rivals. In an open letter on the Securities and Exchange Commission's website Monday, Chairwoman Mary L. Schapiro warned top brokerage executives that "certain forms of potential compensation may carry with them enhanced risks to customers." Specifically, Schapiro's letter focuses on the risk that brokers lured with bonuses might seek to generate commissions big enough "to justify special arrangements that they have been given."
July 9, 2009 |
The Bernard Madoff scandal may have helped claim another head at the Securities and Exchange Commission. Lori Richards, the 49-year-old chief of the SEC division that inspects money managers, said Wednesday that she would resign. Richards, a 24-year veteran of the SEC who worked in enforcement in the agency's Los Angeles office in the early 1990s, has headed the Office of Compliance Inspections and Examinations since it was created in 1995.