Labels: Comverse

Labels: Eliot Spitzer, New York AG

Labels: insider trading

...Five former Prudential brokers and two branch managers in Boston were sued by the SEC and Massachusetts regulators for securities fraud in November 2003. Brokers used aliases to conduct short-term trades on behalf of seven hedge fund clients, driving up costs for the mutual funds' other shareholders, according to the complaints.

Using 183 accounts under phony names and identification numbers, the brokers made more than $3.2 million in net commissions from the trades between January 2001 and September 2003, according to the SEC. The group's ``success relied significantly on a lack of supervision by Prudential,'' the Massachusetts complaint said.

Martin Druffner, whom the government called the leader of one group, pleaded guilty in federal court last year to four counts each of wire fraud and securities fraud. Ex-broker Skifter Ajro also pleaded guilty last year to two counts each of wire and securities fraud. They haven't been sentenced.

Branch manager Robert Shannon pleaded guilty in May to a criminal charge of aiding and abetting securities fraud and was sentenced to three years of probation and a $5,000 fine...

Labels: Eliot Spitzer, New York AG

Labels: Melvyn Weiss, Milberg Weiss

Labels: Kobi Alexander

Labels: Comverse, Kobi Alexander

Labels: background checks, Kirk Wright, Kroll

Labels: Department of Justice

Cold War Missiles Target of Blackout - Documents Altered To Conceal Data

By Christopher Lee
Washington Post Staff Writer
Monday, August 21, 2006; A01

The Bush administration has begun designating as secret some information that the government long provided even to its enemy the former Soviet Union: the numbers of strategic weapons in the U.S. nuclear arsenal during the Cold War.

The Pentagon and the Department of Energy are treating as national security secrets the historical totals of Minuteman, Titan II and other missiles, blacking out the information on previously public documents, according to a new report by the National Security Archive. The archive is a nonprofit research library housed at George Washington University.

"It would be difficult to find more dramatic examples of unjustifiable secrecy than these decisions to classify the numbers of U.S. strategic weapons," wrote William Burr, a senior analyst at the archive who compiled the report. " . . . The Pentagon is now trying to keep secret numbers of strategic weapons that have never been classified before"...

"Somebody within Mellon directed the employees to destroy those tax documents," Buchanan said. "We want to know, How high within the corporation did this knowledge go?"

Labels: Comverse, Kobi Alexander

Labels: Department of Justice

The hunt for Jacob Alexander, known as Kobi, was stepped up yesterday after the FBI declared him a fugitive. Alexander, 54, the former chief executive of the communications software company Comverse, was charged last week by federal prosecutors in Brooklyn with conspiracy to commit securities fraud.

He and two other former Comverse executives were charged in connection with their alleged involvement in a stock options scheme that, prosecutors said, used a secret slush fund to dole out options to favoured employees.

Two of the former executives showed up at their arraignment last week, but Alexander did not. The FBI also said yesterday that a red notice was issued for Alexander with the international police organisation Interpol.

Labels: Comverse, fugitive, Kobie Alexander

Labels: Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital

The SEC complaint alleges that the men overstated revenue at the medical device company in 2001 and 2002 , with the company overstating revenues as much as 33 percent in one quarter. The complaint also says that fraudulent accounting caused earnings to be overstated at least 16 percent in all of 2001. The company has already restated its earnings for both years and said that it doesn't plan to make any further corrections as a result of the investigation.

"Endocare's egregious and widespread fraud pervaded the executive suite," said the director of the SEC's Pacific regional offices in Los Angeles, Randall R. Lee, in a statement...

"This is just a continuation of what was settled with the company, and the SEC has taken the next step of filing charges with these individuals who have long been separated from the company," Endocare spokesman Matt Clawson said. The SEC or Justice Department isn't investigating the company itself.

Labels: Department of Justice, Endocare

Hedge fund managers and their lawyers welcomed the SEC's emergency guidance, issued late on Thursday, saying it will go a long way toward clearing up confusion left by the court's decision and Monday's news that the SEC will not appeal.

"This is a very helpful letter because it restores protective provisions of the rule," said Elizabeth Fries, a partner at Boston law firm Goodwin Procter.

The SEC's hedge fund order was adopted by the investor protection agency in 2004. It took effect in February, requiring most hedge fund advisers to give the SEC basic information about themselves and submit to examinations...

...In its new guidance, the SEC told the registered advisers that the agency will not initiate enforcement actions against them if they obey the provisions in the invalidated rule.

For example, the rule said funds-of-funds had a more-generous 180 days to send audited financial statements to investors. As long as the advisers remain registered, they will still have roughly half a year to deliver those documents, according to the guidance.

This may be especially important for funds-of-funds, which put together portfolios of individual hedge funds for their clients and likely need additional time to collect the data from their hedge fund managers.

"This guidance makes it clear that it won't hurt those funds that have registered," Fries said.

Also, as long as they stay registered, funds will not be penalized for having kept performance data only since February, 2005, the guidance said. Funds that are not registered have to show much longer data histories."

At the heart of the case are allegations made to a French judge by a former executive of an international consortium known as TSKJ, which has for the past decade been building and expanding a giant natural gas liquefaction plant in southern Nigeria. The plant, one of Africa's biggest industrial projects and a natural gas supplier of global significance, is owned by the Nigerian government, Royal Dutch/Shell, Total of France and Eni of Italy.

According to the Financial Times, the former French executive said the consortium, which includes MW Kellogg, a British company 55% owned by KBR, [ Halliburton subsidiary, Kellog Brown & Root - MDT] had set up a slush fund to channel pay-offs to help it win a series of building contracts since the mid-1990s.

According to documents from the French investigation, the payments in question relate to four separate contracts under which the consortium agreed to pay a total of just over $170m to an offshore company controlled by a London-based lawyer called Jeffrey Tesler. He has declined comment, although his lawyer has in the past denied the payments constituted bribes.

Investigators in the US, France and Nigeria have looked with particular interest at handwritten meeting minutes surrendered by Halliburton, in which consortium partners use highly suggestive language about how they plan to do business.

Labels: bribery

As options scandal grows, lawyers try to make it no big deal

By Tom Petruno
Columnist for the Los Angeles Times
A Tribune Co. Newspaper
August 13, 2006

The stock-option backdating scandal hadn't been looking like great fodder for screenwriters. Then the government last week announced its case against Comverse Technology Inc. Imaginary employees, a slush fund named for "Phantom of the Opera," a fugitive chief executive--now we're getting the kinds of details that can overcome the eye-glazing effect that the term "option backdating" can induce. This ought to at least be good for a cheap made-for-TV movie...

Labels: Comverse

Labels: Enron, Houston's Clear Thinkers, NatWest Three

"George Robinson, co-founder of Sloane Robinson - the big Asia and emerging markets specialists...Steve Howell of Basis Capital, the Sydney-based fixed income specialists...and Dan Waters, head of the IOSCO Valuation Committee, will be...covering issues central to the development of hedge funds not only in the Asia-Pacific but globally."

Labels: Kroll

Labels: Apple

Labels: Milberg Weiss

Labels: Enron

Senior Criminal Justice Official for NYC Mayor's Office Joins Kroll

Press Release
August 1, 2006

Richard Plansky, formerly the Deputy Criminal Justice Coordinator for the Office of the Mayor of the City of New York, has joined Kroll, the global risk consulting company, as a managing director in its Business Intelligence & Investigations division.

Based in Kroll's head office in New York, Plansky is responsible for corporate investigations, fraud prevention and detection, and integrity due diligence.

Plansky, a 14-year veteran of the criminal justice system, has led complex investigations involving sex crimes, homicides, police shootings, larcenies, and other serious crimes. Most recently, as Deputy Criminal Justice Coordinator, he oversaw the development of multi-agency criminal justice initiatives, including a comprehensive program targeting the distribution and use of illegal guns. He also developed the John Doe Indictment project, a citywide effort to preserve unsolved sex crimes for later prosecution through the use of DNA technology.

Plansky began his career as an assistant district attorney in New York County where, from 1992 through 2001, he prosecuted 30 Supreme Court trials and conducted more than 150 grand jury presentations and investigations. He subsequently served as assistant general counsel at the City University of New York, where he led extensive investigations involving allegations of organized cheating and identity theft, as well as student and faculty misconduct.

In 2002, Plansky was appointed special counsel to the Mayor's Criminal Justice Coordinator, and was promoted the following year to general counsel and director of the Mayor's Office of Midtown Enforcement. In this role, he oversaw all legal affairs, formulated quality of life enforcement strategies, and developed and coordinated a wide spectrum of criminal justice programs, including an initiative to combat large-scale trademark counterfeiting establishments.

Plansky received his Juris Doctor, magna cum laude, from Harvard University.

Labels: identity theft, Kroll, New York AG

The U.S. Securities and Exchange Commission and the U.S. Department of Justice each are investigating alleged stock option backdating at dozens of U.S. companies, with the SEC probing securities filings at more than 80 U.S. corporations.

With federal prosecutors and SEC investigators breathing down their necks, Texas corporations are hiring defense firms, and plaintiffs firms are beginning to file shareholder derivative or class-action suits related to alleged option backdating at Texas companies.

"This all heated up for us in June of this year," says Charlie Parker, a securities litigation partner in Locke Liddell & Sapp in Houston. "It's kind of become a rather large source of work for many lawyers," says Michael Gold, a corporate partner in Baker Botts in Washington, D.C. The work, Gold says, cuts across many practice areas.

"This is the kind of issue that kind of crosses a whole lot of legal and accounting ... issues. You have tax issues embedded in this. You have employee compensation issues embedded in this. You have corporate governance issues at the heart of this," Gold says. "In the purest, worst form, if the alleged conduct is true, it is fraud where there was a bad intent."

Labels: Department of Justice

Labels: Department of Justice

Theft of sensitive files prompts company to hire private investigator

July 26, 2006
CBC News

The theft of a laptop from a financial services company containing thousands of personal files has clients asking how it could have happened. The laptop of an MD Management employee, containing information on 8,000 clients, was stolen from a parked car in an Edmonton shopping mall parking lot on June 19...MD Management has hired a private investigator to try to track the computer down.

Labels: Kroll, Mintz Group