Mishcon Fraud Watch - June 2011
Welcome to the June 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
Financial Services
Christopher Moore, former executive chairman of Torex Retail, has been charged with conspiracy to defraud by the Serious Fraud Office. The company’s former chairman, Robin Loosemore, finance director Mark Woodbridge and legal director Nigel Horn have also been accused of conspiracy to defraud.
Caroline Binham
The Financial Times, 10 May 2011
Retail
UK trader Samuel Kahn, who posed as the director of a charity to push up the value of shares in the company Global Brands Licensing, has been fined nearly £1.1m and ordered, in an injunction which is the first of its kind, to stop committing market abuse.
Brooke Masters
The Financial Times, 24 May 2011
North America
Securities and Exchange Commission (SEC)
The SEC has charged Donald L. Johnson, a former managing director of NASDAQ, with insider trading on confidential information that he allegedly stole while working in a market intelligence unit.
SEC press release 2011-117, 26 May 2011
The SEC has charged investment adviser Lloyd V. Barriger over allegations of fraudulently offering and selling securities in two New York real estate funds.
SEC press release 2011-111, 13 May 2011
UBS Financial Services Inc has settled SEC charges of fraudulently rigging at least 100 municipal bond reinvestment transactions in 36 states and generating millions of dollars, by agreeing to pay $47.2 million.
SEC press release 2011-105, 4 May 2011
Private Equity
US private equity group Carlyle is facing questions over its investments in two companies, China Forestry and China Agritech, which have been accused of fraud and accounting irregularities and suspended from trading on stock exchanges in Hong Kong and New York.
Robert Cookson and Henny Sender
Financial Times, 6 May 2011
Hedge Funds
Raj Rajaratnam, former head of Galleon Group, has been found guilty on all fourteen counts at his trial for securities fraud and conspiracy - making $63m by trading after learning secrets about earnings announcements and corporate takeovers before they were announced.
Kara Scannell
The Financial Times, 11 May 2011
Europe
Retail
Italian police have raided the offices of banks Lazard, Intesa Sanpaolo, Crédit Agricole and Société Générale and the PR companies Brunswick and Image Building as part of an investigation into allegations of market-rigging and insider trading connected to Lactalis's bid for Parmalat.
The Times, 12 May 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.