Here is the weekly summary for Securities Docket’s Web Watch (”This Week’s Best Blog Posts and Columns”):
Bernie Madoff, the $19 Billion Con, Makes New Friends Behind Bars (Dionne Searcey, WSJ)
The Wall Street Journal | December 11, 2009
Inmate No. 61727-054 shares an unlocked cell at the medium-security prison at Butner Federal Correctional Complex with a younger man named Frank. He wears khaki prison garb and has been spotted walking on an outdoor track. He plays bocce, chess and checkers. He scrubs pots and pans in the prison kitchen.
The 71-year-old Mr. Madoff also is salvaging something that disappeared in the outside world the moment his fraud was exposed: respect. “To every con artist, he is the godfather, the don,” says an inmate interviewed earlier this week.
Securities Class Actions in the UK? Well, not exactly (Securities Litigation Watch)
Securities Litigation Watch | December 11, 2009
An online article from Responsible Investor is causing waves for suggesting that a number of UK pension funds and other institutional investors excluded from a US class action against RBS might file a class action in the High Court in London. Interesting as the article may be, there is a subtle, but important distinction between this potential UK action and a true class action.
New Siemens Securities Suit: Did the Company Misprepresent Its Ability to Hit Targets Without Bribery? (The D & O Diary)
The D&O Diary | December 11, 2009
The recently filed securities suit refers extensively to the SEC’s enforcement complaint against the company. But though the class action complaint is inextricably linked to the company’s bribery revelations, the complaint is not about the bribery disclosures as such. Rather, the complaint purports to be based on company statements about its business prospects and its ability to compete without making improper payments.
More Bad Lawyers and Galleon (M & A Law Prof Blog)
M & A Law Prof Blog | December 11, 2009
If you read the SEC’s complaint closely, you’ll see that the SEC connects Cutillo directly to the trading network by way of phone calls. Santarlas however is no where to be seen in the wiretaps. One wonders how the FBI was able to tie Santarlas to the ring? I have a guess. When you look at a document on Ropes’ document server, I guarantee you that a record is kept of who you are and whether you edited the document or simply viewed it. It wouldn’t be all that hard, if someone was looking at documents on the server to go in ex post and figure who it was. Notwithstanding the fact that these guys were tech-types, turns out they weren’t all that tech savvy.
As Internal Audit Staffs Shrink, Will Fraud Rise? (Kate O’Sullivan, CFO.com)
CFO.com
Few corporate departments have been spared layoffs in recent months, and internal audit and compliance are no exceptions. The implications for companies are worrisome. “We know that in a recessionary time, fraud risk and corruption risk rise, so there’s a tension there,” said Kerry Francis, chairman of Deloitte Financial Advisory Services. “You’ve got a decrease in compliance personnel, and in this economic environment there’s pressure on employees and pressure on management – and that causes some people to do things that they shouldn’t.”
More effort, less ambition (The Australian)
The Australian | December 10, 2009
Three out of three is not a good strike rate for the corporate watchdog. That’s how many big cases the Australian Securities and Investments Commission has lost in the past two years — a score that does not inspire confidence in the judgment or skill of the institution. The Victorian Supreme Court decision on Wednesday to quash ASIC’s bid to bring a second round of proceedings against the former chief of the AWB, Andrew Lindberg, added to the humiliations it has suffered of late.
INSIDER TRADING: Shipwrecked (American Chronicle)
American Chronicle | December 8, 2009
The scandal, which has rocked Wall Street, has far-reaching implications: how widespread is insider trading, among the hedge fund community, other financial institutions, and even deep in corporate America? Are the Galleon cast of characters a barrel of exceptionally bad apples? Or did authorities choose it for an example, picked as a warning at large?
Honest Services Day – Preview (White Collar Crime Prof Blog)
White Collar Crime Prof Blog | December 8, 2009
The media and blogs have been buzzing for the last few days, all discussing the big oral arguments of today. For at long last, the Supreme Court will examine the “honest services” statute (18 U.S.C. 1346), a statute that claims itself to be a definition statute for use with many of the fraud statutes. Defendants in mail and wire fraud cases have long argued issues of vagueness with respect to the statute that allows for prosecutions for a deprivation of an intangible right to honest services.
Canada taking only baby steps on white collar crime (Metro Canada)
Metro Canada | December 8, 2009
If PricewaterhouseCoopers’ annual survey is an accurate indicator, economic or “white collar” crime in Canada is growing at a disturbing rate, and far faster than in other developed countries.
Still, this understates the problem of economic crime in Canada. What the survey doesn’t delve into, however, is our longstanding structural predisposition toward fraudulent behaviour.
Keeping firms honest (WaPo)
The Washington Post | December 8, 2009
If the justices strike down the PCAOB standard, the common law would then entitle the SEC to remove members “at will.” Taking such a step should cure the possible constitutional infirmity and would otherwise leave intact an important, congressionally created policy tool that has served a crucial role in increasing confidence in the legitimacy of public company audits.
