Mishcon Fraud Watch - October 2011
Welcome to the October 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
Financial Services
Kweku Adoboli, a trader at UBS, has been charged over allegations of fraud by abuse of position and two counts of false accounting.
Jill Treanor
Guardian, 16 September 2011
The Financial Services Authority has taken out an interim injunction at the High Court to freeze the assets of Da Vinci Invest Ltd, Da Vinci Invest PTE Ltd, Mineworld Ltd, Szabolcs Banya, Tamas Pornye and Gyorgi Brad that the regulator alleges have manipulated share prices on UK trading platforms.
Philip Stafford and Simon Mundy
Financial Times, 2 September 2011
NORTH AMERICA
Securities and Exchange Commission (SEC)
The SEC has charged Barr M. Rosenberg, co-founder AXA Rosenberg, with securities fraud for concealing a significant error in the computer code of the quantitative investment model that he developed and provided to the firm's entities for use in managing client assets.
SEC press release 2011-189, 22 September 2011
The SEC has charged former Goldman, Sachs & Co. employee Spencer D. Mindlin and Alfred C. Mindlin with insider trading on confidential information about Goldman’s trading strategies and intentions that he learned while working on the firm’s exchange-traded funds desk.
SEC press release 2011-188, 21 September 2011
The SEC has charged former global consulting firm executive Scott Allen and John Michael Bennett with insider trading on confidential information about impending takeovers of biotechnology companies Millennium Pharmaceuticals Inc. and Sepracor Inc.
SEC press release 2011-183, 15 September 2011
EUROPE
Government
Using reports from national authorities, European Union officials have calculated that fraudsters stole at least £415 million from Brussels projects in 2010.
Bruno Waterfield
Daily Telegraph, 30 September 2011
ASIA
Financial Services
Iranian President Mahmoud Ahmadi-Nejad is being drawn into a scandal allegedly perpetrated by his political allies after the arrest of nineteen suspects in a $2.6 billion bank fraud. The government has denied any links to the fraud.
Najmeh Bozorgmehr
Financial Times, 19 September 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.