SEC Charges Life Settlements Firm and Three Executives with Disclosure and Accounting Fraud

A Texas-based financial services firm, Life Partners Holdings Inc., and three of its senior executives have been charged by the SEC for their involvement in a fraudulent disclosure and accounting scheme involving life settlements. The firm failed to disclose risks, therefore misleading investors. Unknown to investors, the company was systematically and materially underestimating the life expectancy estimates, used to price transactions. These estimates have a large impact on the company’s revenues and profit margins as well as the company’s ability to generate profits for its shareholders. It is also alleged that they also utilized improper accounting to increase the companies value.

SEC Charges Life Settlements Firm and Three Executives with Disclosure and Accounting Fraud

SEC Charges Magyar Telekom and Former Executives with Bribing Officials in Macedonia and Montenegro

The SEC charged the largest telecommunications provider in Hungary and three of its former top executives with bribing government and political party officials in Macedonia and Montenegro to win business and shut out competition in the telecommunications industry. The SEC alleges that three senior executives at Magyar Telekom Plc. orchestrated, approved, and executed a plan to bribe Macedonian officials in 2005 and 2006 to prevent the introduction of a new competitor and gain other regulatory benefits. Magyar Telekom's subsidiaries in Macedonia made illegal payments of approximately $6 million under the guise of bogus consulting and marketing contracts. The same executives orchestrated a second scheme in 2005 in Montenegro related to Magyar Telekom's acquisition of the state-owned telecommunications company there. Magyar Telekom paid approximately $9 million through four sham contracts to funnel money to government officials in Montenegro.

SEC Charges Magyar Telekom and Former Executives with Bribing Officials in Macedonia and Montenegro

FINRA Fines Credit Suisse Securities $1.75 Million for Regulation SHO Violations and Supervisory Failures

FINRA has fined Credit Suisse Securities (USA) LLC $1.75 million for violating Regulation SHO and failing to properly supervise short sales of securities and marking of sale orders. As a result of these violations, Credit Suisse entered millions of short sale orders without reasonable grounds to believe that the securities could be borrowed and delivered and mismarked thousands of sales orders. Reg SHO requires a broker or dealer to have reasonable grounds to believe that the security could be borrowed and available for delivery before accepting or effecting a short sale order. Requiring firms to obtain and document this "locate" information before the short sale is entered reduces the number of potential failures to deliver in equity securities. In addition, Reg SHO requires a broker or dealer to mark sales of equity securities as long or short.

Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, said, "Credit Suisse's Reg SHO supervisory and compliance monitoring system was seriously flawed. Millions of short sale orders were being entered in its systems without locates for over four years because the firm did not have adequate Reg SHO technology and procedures in place."

FINRA Fines Credit Suisse Securities $1.75 Million for Regulation SHO Violations and Supervisory Failures

Agencies Extend Comment Period on Volcker Rule Proposal

Four federal agencies today extended the comment period on a proposal to implement the so-called Volcker Rule of the Dodd-Frank Wall Street Reform and Consumer Protection Act until February 13, 2012.

The Dodd-Frank Act requires regulators to implement certain prohibitions and restrictions on the ability of a banking entity and nonbank financial company to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund. The comment period was extended as part of a coordinated interagency effort to allow interested persons more time to analyze the issues and prepare their comments.

Agencies Extend Comment Period on Volcker Rule Proposal

SEC Charges Securities Trader with Cross-Border Fraudulent Interpositioning Scheme

The SEC alleges that a former securities trader acted in concert with a Mexican investment adviser, InvesTrust, and unnecessarily inserted a separate broker-dealer as a middleman into securities transactions in order to generate millions of dollars in additional fees. The former trader, who resided in Coronado, Calif., at the time and currently lives in Mexico, agreed to pay $1 million to settle the SEC’s charges. The SEC also charged his former firm Investment Placement Group (IPG) and its CEO with failing to properly supervise. IPG agreed to pay more than $4 million to settle the charges.

In an interpositioning scheme, an extra broker-dealer is illegally added as a principal on trades even though no real services are being provided. The SEC alleges that the former trader colluded with InvesTrust and needlessly inserted a broker-dealer based in Mexico into securities transactions between IPG and InvesTrust’s pension fund clients, causing the pension funds to pay approximately $65 million more than they would have without the middleman.

SEC Charges Securities Trader with Cross-Border Fraudulent Interpositioning Scheme

Can You Subpoena a Hashtag?

They seem to think so in Boston. The Suffolk County District Attorney has subpoenaed Twitter for "All available subscriber information, for the account or accounts associated with the following information, including IP address logs for account creation and for the period December 8, 2011 to December 13, 2011.” The "information" includes two hashtags, #BostonPD and #d0xcak3.

Technically they are not serving the hastag, but what does this mean? They want the IP address of everyone who posted a tweet with those hashtags? I get it, they are investigating threats to the police, that's fine, but seeking the IP address of everyone who used those hashtags during a 6 day period? 

Keeping up with the 2012 U.S. election with Google.com/Elections

From the nineteenth century’s pamphlets to the twentieth century’s TV ad revolution, our elections have always been shaped by how we communicate and consume information. There’s no question that the Internet is set to deliver more political information, opinion and news than any other medium throughout the 2012 U.S. elections. The web offers candidate and issue info to voters; networking and fundraising platforms for campaigns; and research and productivity tools for journalists.

Today, just in time for the Iowa Caucuses, we’re launching google.com/elections, an election hub where citizens can study, watch, discuss, learn about, participate in and perhaps even make an impact on the digital campaign trail as it blazes forward to Tuesday, November 6, 2012.

The site enables voters, journalists and campaigns to quickly sort through election info by popularity, race or issues. People can also check out the Trends Dashboard to take the web’s real-time political pulse by comparing candidates’ YouTube video views, search traffic and Google News mentions. Campaign staffers, advocates and everyday citizens can utilize our tools and features to reach, engage and inspire voters.

There are a lot of miles to cover and coffee to be consumed before Election Day. We hope you’ll make Google.com/elections one of your regular online stops along the way.

Posted by Eric Hysen, Google Politics & Elections Team

(Cross-posted from the Politics & Elections Blog)