Mishcon Fraud Watch - June 2009
Welcome to the June edition of Mishcon Fraud Watch, prepared by the Fraud & Insolvency Group at Mishcon de Reya. 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
Banking and Finance
Business Consulting International (BCI), John Anderson Consulting and Kenneth Peacock Consulting are being investigated by the City of London Police in connection with allegations of mishandling more than £50m of investor funds. The matter was referred to the Police by the Financial Services Authority.
City of London Police press notice, 21 May 2009
MF Global, has admitted vicarious liability to fraudulent misrepresentation by Matthew Bromford, a futures broker. A judge found that Mr Bromford lied to Rajesh Gill, a day trader, by telling him his accounts were worth more than £10m when the balance was less than £2m.
Michael Herman and Steve Bird
The Times, 7 May 2009
Survey's and Research
Research, based on figures from the Insolvency Service, shows a 72% increase in the number of director disqualifications at insolvent companies where directors have been implicated in fraud in the year to the end of March 2009.
Helen Power
The Times, 4 May 2009
Serious Fraud Office (SFO)
Christopher John Law and Geraint Roberts, former directors of Alfred McAlpine Slate Ltd, a subsidiary of Alfred McAlpine plc, have pleaded guilty to fraudulent trading.
SFO press release, 8 May 2009
Western Europe
Banking and Finance
Julius Meinl, the head of Austria’s largest private bank, Meinl Bank, has been released on bail after being arrested in connection with an ongoing investigation into an alleged fraud involving the collapse of Meinl European Land, an investment fund managed by Meinl Bank. Mr Meinl denies any wrongdoing.
Andrew Pierce
The Independent, 5 May 2009
North America
Banking and Finance
James Gansman, a former partner at Ernst & Young in New York has been found guilty of insider trading after passing confidential information about multibillion dollar company buyouts to a friend.
Christine Seib
The Times, 18 May 2009
Securities and Exchange Commission (SEC)
Monster Worldwide Inc. has agreed to pay the SEC $2.5m to settle charges relating to the alleged backdating of stock options granted to thousands of Monster officers, directors and employees.
SEC press release 2009-113, 18 May 2009
The SEC has charged Paul G. Bultmeyer and Arthur J. Piacentini with orchestrating a fraudulent scheme to sell unregistered securities through Sherbourne Capital Management Ltd and Sherbourne Financial Ltd.
SEC press release 2009-110, 14 May 2009
The SEC has charged Renato Negrin, a former portfolio manager at hedge fund investment adviser Millennium Partners L.P., and Jon-Paul Rorech, a salesman at Deutsche Bank Securities Inc., with insider trading in credit default swaps of VNU N.V., an international holding company that owns Nielsen Media and other media businesses.
SEC press release 2009-102, 5 May 2009
Mishcon de Reya
Mishcon's Fraud Watch is published by the Fraud & Insolvency Group of Mishcon de Reya Solicitors. Widely recognised as the leader in the field of fraud investigations, the Group has pioneered the use of financial fraud techniques in numerous fields, including the rapidly growing areas of theft of confidential information and counterfeiting. The Group founded and run both the Fraud Network, made up of international legal fraud specialists and the Financial Risk Group, for risk and compliance officers.