Mishcon Fraud Watch - September 2011
Welcome to the September 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
Michiel Weiger Visser, chief executive of Mercurius Capital Management, has been fined a record £2m and struck off by the Financial Services Authority after being found guilty of share ramping and lying to investors by manipulating the fund's main indicator of financial health.
Caroline Binham and Kate Burgess
Financial Times, 16 August 2011
Reports and Surveys
Only ten companies have taken advantage of a US-style scheme to "self-report" potential offences to the Serious Fraud Office amid widespread uncertainty about how judges respond to such deals, according to the director of the organisation.
Jane Croft and Caroline Binham
Financial Times, 8 August 2011
INTERNATIONAL
Financial Services
The international investigation into alleged manipulation of Libor rates during the financial crisis of 2007/8 has uncovered evidence that insider trading rings might have been operating at some of the world's largest investment banks.
Jonathan Russell
The Daily Telegraph, 29 August 2011
NORTH AMERICA
Securities and Exchange Commission (SEC)
The SEC has charged James Davis Risher and Daniel Joseph Sebastian over allegations of operating a Ponzi scheme disguised as a purported private equity fund that fraudulently raised approximately $22 million from more than 100 investors.
SEC press release 2011-171, 29 August 2011
The SEC has charged Toby G. Scammell over allegations of insider trading for a 3000 percent profit based on confidential information that he learned prior to Walt Disney Company’s acquisition of Marvel Entertainment.
SEC press release 2011-166, 11 August 2011
The SEC has charged H. Clayton Peterson, a former board member at Mariner Energy Inc., and his son, Drew Peterson, over allegations of insider trading on confidential information about the impending takeover of the oil and gas company.
SEC press release 2011-162, 5 August 2011
Investment Companies
Former Primary Global sales manager James Fleishman is to go to trial following allegations that he was part of an insider-trading scheme that matched hedge fund clients with company insiders. Mr Fleishman has denied wrongdoing.
Kara Scannell,
Financial Times, 31 August 2011
ASIA
Forestry
The Ontario Services Commission has halted trading in China-based Sino-Forest, and its chairman and CEO have resigned, following allegations of fraud.
Kara Scannell
Financial Times, 29 August 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.