Mishcon Fraud Watch - July 2011
Welcome to the July edition of Mishcon Fraud Watch. 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
Government
Home Secretary Theresa May has rowed back on plans to split the Serious Fraud Office and roll it into a new FBI-style organisation after dropping a plan for investigators at the agency to join the National Crime Agency.
Caroline Binham
The Financial Times, 8 June 2011
Financial services
Daniel Hirst, Linda Christine Hirst and Zoe Waite have been charged following an SFO investigation into an alleged "Ponzi" scheme worth £10m.
Nikhil Kumar
The Independent, 29 June 2011
INTERNATIONAL
Reports
A review of 348 investigations carried out by auditor KPMG in 69 countries has found that senior executives are committing an increasing proportion of fraud within companies, with cases involving the chief executive or managing directors' offices more than doubling.
The Daily Telegraph, 20 June 2011
North America
Securities and Exchange Commission (SEC)
The SEC has announced that Morgan Keegan & Company and Morgan Asset Management have agreed to pay $200 million to settle fraud charges related to subprime mortgage-backed securities.
SEC press release 2011-132, 22 June 2011
The SEC has announced that J.P. Morgan Securities LLC has agreed to pay $153.6 million to settle charges that it misled investors in a complex mortgage securities transaction.
SEC press release 2011-131, 21 June 2011
The SEC has charged Eric Lipkin, a longtime employee at Bernard L. Madoff Investment Securities LLC, with helping Bernard L. Madoff and his firm deceive and defraud investors and regulators about the massive Ponzi scheme.
SEC press release 2011-119, 6 June 2011
Hedge Funds
SAC Capital, one of the world's biggest hedge funds, is facing allegations in America that trades in health care stocks were made using inside information.
Daily Telegraph, 2 June 2011
Research
Don Chu, a former employee at expert network firm Primary Global Research, has pleaded guilty to conspiracy to commit insider trading.
Kara Scannell
The Financial Times, 8 June 2011
Europe
Financial Services
Ana Patricia Botin,her father Emilio,and a dozen members of Spain's Botin family, which runs the Santander bank, have been placed under investigation for alleged tax fraud. The family have denied any wrongdoing.
Giles Tremlett
The Guardian, 17 June 2011
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.