The Commodity Futures Trading Commission has now adopted new rules - Regs. 180.1 and 180.2 – to implement the Dodd-Frank Act. They are intended to broaden the CFTC’s power over market manipulations involving trickery (Reg. 180.1) and the pure use of raw market power (Reg. 180.2).
Congress passed a bill last week closing a loop hole in the Dodd-Frank Act that gave the Securities Exchange Commission (SEC) broad exemption to the Freedom of Information Act (FOIA). The exemption gave the SEC the ability to deny a much greater number of requests for information and came to light after the SEC cited the exemption when it denied Fox Business News information it had requested. (more…)
Throughout the day of congressional hearings with Goldman Sachs officials this week and in countless news stories, editorials and blogs we keep hearing the word “complexity” when referring to the Abacus 2007-AC1 collateralized debt obligation (CDO) at the heart of the Securities and Exchange Commission’s (SEC) case against Goldman. Albert Einstein is credited with the phrase, “make things as simple as possible but not any simpler.” Basically it means make things clear but do not leave out material details. Some things, rocket science for one, are complex by their nature. But what is the purpose of the complexity of something like the Abacus CDO?
It was only a matter of time. Fraudster extraordinaire Bernie Madoff pulled off some Hollywood-style hijinks with his Ponzi scheme to end all Ponzi schemes, and now Madoff and other fraudsters have inspired a movie. “Change Your Life,” a so-called ”mockumentary,” explores the get-rich-quick schemes of Madoff and others.
When this press release crossed my desk, I was excited to view the trailer, as Madoff’s shenanigans seem quite ripe for lampooning. However, the trailer (view it here) is very low-rent and really not that funny (kind of like the crimes themselves). Maybe Hollywood at large is staying away from the Madoff story because many celebs (Steven Spielberg, Kevin Bacon, etc.) were among Madoff’s victims. The direct-to-DVD release of “Change Your Life” hits shelves June 29, the day of Madoff’s sentencing.
Bernie Madoff is so yesterday. Let’s check out the hot new financial fraudster on the block, Marcus Schrenker. Schrenker, nabbed by U.S. marshals yesterday after trying to fake his own death in a plane crash, ran Heritage Wealth Management, against which a federal judge in Maryland issued a $533,500 judgment on Jan. 9. Seven investors claimed he cost them more than $250,000, according to a Fox News report.
As a parent it never fails that when one of my sons is confronted with a broken household item, unclaimed mess or injured sibling, he will predictably recite a list of previous misdeeds by one of his siblings in lieu of acknowledging culpability for the issue at hand. Unfortunately that is the same reaction taken by our leaders in Congress and at agencies like the Securities and Exchange Commission.
When faced with complaints over rising energy costs, Congress ignored the historically weak dollar, energy fundamentals (some of which were of their own making) and 35 years of failure to create an energy policy and went after speculators. When the explosion of leverage and lax oversight of investment banks helped to contribute to our current credit crisis the SEC went after short sellers.
The day after hedge-fund fraudster Sam Israel III gave himself up to authorities, another one of the dubious dodgers of corporate America was sentenced for his fraudulent dastardly doings. Phillip Bennett, former CEO of Refco, was sentenced to 16 years in prison on July 3. He had pled guilty in February to 20 counts of fraud, conspiracy, money laundering and lying to auditors.
That’s it. For bringing down a financial institution, he only got 16 years. Money lost due to his scheme: $2.4 billion.
Let’s compare that to some other white color criminal sentencing:
Although Refco officer Tone Grant also was found guilty, he’s not being sentenced until early August and further, he didn’t plead out his case. He could face 85 years. Money lost due to his (et al) scheme: $2.4 billion
Recently on the lam hedge fund fraudster Sam Israel III will spend 20 years in jail, with another 10 possibly tacked on for his little fugitive drama. Money investors were out due to his scheme: $400 million.
Another convicted hedge fund fraudster is back in the news, having filed a lawsuit against his alma mater for his university degree.
You may remember Hakan Yalincak and his fictitious Daedalus Capital Relative Value Fund; back in 2005 he pleaded guilty to one count of bank fraud and one count of wire fraud after he and his mother, Ayfer Yalincak (also known as “Jackie Yalincak,” also known as “Ayferefat Yalincak,” also known as “Ayfer Elgezdi Yalincak,” also known as “Irene Kelly,”- ed. I love that part!) were indicted for fraudulently soliciting more than $7 million from investors.
Yalincak’s move to get his degree transcends pathetic to achieve the sublime for several reasons.
CNBC is reporting that Sam Israel III turned himself in the morning, surrendering to police in Southwick, MA.
This is one of those good news/bad news situations. It’s clearly good news that the guy who perpetrated a $450 million fraud is going to serve time for the crimes in which he participated.
It’s bad news in that by the time I get the video from “America’s Most Wanted,” which aired on June 28, the story will be kind of stale; and my hopes of seeing him arrested on an episode of COPS have been dashed. Couldn’t you just see him racing out of his mobile home, disoriented and wearing in a dingy wife beater, flashing his blue bird tatoo? Am I the only one laughing?
I guess I’m going to have to find something new to goof on in the blog.
Have you heard the one about Hakan Yalincak? Stay tuned…
