Mishcon Fraud Watch - November 2011
Welcome to the November 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 judgment 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
Defence
The Serious Fraud Office is understood to be close to deciding whether to launch a formal criminal investigation into claims that GPT Special Project Management, a subsidiary of EADS, made corrupt payments linked to a £2 billion contract.
Alex Spence
TheTimes, 10 October 2011
Reports & Surveys
Figures from the UK Cards Association show that, due to investment in new fraud detection technology, card fraud has experienced the largest decline in online transactions since the introduction of online banking and e-retailing to Britain.
Elaine Moore
Financial Times, 5 October 2011
INTERNATIONAL
Reports & Surveys
According to the Kroll annual global fraud survey, global companies reported a sharp reduction in the frequency of fraud last year, driven by drops in theft of information and physical assets, even as concerns about their vulnerability to other kinds of losses rose sharply.
Brooke Masters
Financial Times, 18 October 2011
NORTH AMERICA
Securities and Exchange Commission (SEC)
The SEC has charged former McKinsey & Co. global head Rajat K. Gupta with insider trading for illegally tipping convicted hedge fund manager Raj Rajaratnam while serving on the boards of Goldman Sachs and Procter & Gamble.
SEC press release 2011-223, 26 October 2011
The SEC has charged Citigroup’s principal U.S. broker-dealer subsidiary, Citigroup Global Markets, with misleading investors about a $1 billion collateralized debt obligation tied to the U.S. housing market. Citigroup agreed to settle the charges by paying a total of $285 million.
SEC press release 2011-214, 19 October 2011
The SEC has charged former bank executives Thomas Wu, Ebrahim Shabudin, and Thomas Yu with misleading investors about mounting loan losses at San Francisco-based United Commercial Bank.
SEC press release 2011-202, 11 October 2011
EUROPE
Hedge Funds
George Soros, the billionaire hedge fund manager, has lost a case at the European Court of Human Rights to have his criminal conviction for insider dealing quashed.
Sam Jones and Stanley Pignal
Financial Times, 7 October 2011
ASIA
Financial Services
Japan's regulator, the Securities and Exchange Surveillance Commission, is investigating SMBC Nikko Securities and one of its executive officers in connection with alleged insider trading.
Michiyo Nakamoto
Financial Times, 7 October 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.