Mishcon Fraud Watch - February 2011
Welcome to the February edition of Mishcon Fraud Watch, prepared by the Dispute Resolution Department at Mishcon de Reya. Its aim is to provide businesses and their advisors with a snapshot of what has been happening in the world of fraud in the last month.
We make no judgement whatsoever as to the morality, legality or appropriateness of the conduct which forms the subject matter of this bulletin. We simply aim to bring these matters to the attention of those involved in the prevention, detection and investigation of fraud.
UNITED KINGDOM
Financial Services
Christian Littlewood, a former investment banker at Dresdner Kleinwort, his wife Angie Littlewood and her friend Helmy Omar Sa'aid, have pleaded guilty to eight counts of insider dealing brought by the Financial Services Authority.
Jane Croft
Financial Times, 31 January 2010
Reports and surveys
The National Fraud Authority has published its second Annual Fraud Indicator which estimates fraud is costing the UK over £38 billion a year.
NFA Press Release, 27 January 2010
NORTH AMERICA
Securities and Exchange Commission (SEC)
The SEC has charged Maxwell Technologies Inc. with violating the Foreign Corrupt Practices Act by repeatedly paying bribes to government officials in China to obtain business from several Chinese state-owned entities.
SEC press release 2011-31 31 January 2010
The SEC has charged Provident Capital Indemnity Ltd, its president Minor Vargas Calvo, and its purported outside auditor, Jorge L. Castillo, with conducting a massive life settlement bonding fraud.
SEC press release 2011-15 19 January 2010
The SEC has charged Charles Schwab Investment Management and Charles Schwab & Co., Inc., with making misleading statements and has fined the companies $118 million.
SEC press release 2011-7 11 January 2010
The SEC has charged SJK Investment Management LLC and its CEO Stanley Kowalewski with defrauding investors in two hedge funds by secretly diverting millions of dollars to themselves through various self-dealing transactions.
SEC press release 2011-3 7 January 2010
Financial Services
Bob Nguyen, former employee of Primary Global Research, has pleaded guilty as part of the federal government's investigation into alleged insider trading on Wall Street.
Kara Scannell
Financial Times, 11 January 2010
Hedge Funds
Robert Feinblatt, co-founder of hedge fund Trivium Capital Management, has been charged with insider trading of shares in companies including Google and Hilton Hotels.
Kara Scannell
Financial Times, 10 January 2010
EUROPE
Media
Warner Music Group chairman, Edgar Bronfman Jr, has been convicted of insider trading and fined £4.2m over his conduct as vice-chairman of the French media company Vivendi nearly 10 years ago. Jean-Marie Messier, Vivendi's former chief executive, was also convicted of misleading investors.
Mark Sweney
The Guardian, 22 January 2010
Financial Services
The prosecutor's office in Milan has filed a suit against banks related to its investigation into the Parmalat fraud in 2003 seeking EUR120m in damages from Deutsche Bank, Citigroup, Morgan Stanley and Bank of America. Citigroup has said the allegations are groundless.
Rachel Sanderson
Financial Times, 17 January 2010
ASIA
Financial Services
Barclays is facing allegations that it helped defraud a Greek pipe manufacturer in a case that could change the legal landscape for overseas banks operating in Dubai.
Simeon Kerr
Financial Times, 25 January 2010
Mishcon de Reya
Mishcon's Fraud Watch is published by the Dispute Resolution Department of Mishcon de Reya. Widely recognised as the leader in the field of fraud investigations, the Department has pioneered the use of financial fraud techniques in numerous fields, including the rapidly growing areas of theft of confidential information and counterfeiting. The Department founded and run both the Fraud Network, made up of international legal fraud specialists and the Financial Risk Group, for risk and compliance officers.