The Internal Revenue Service (IRS) awarded $125.4 million in whistleblower payments in fiscal year 2012, which accounted for 21% of the $592.5 million it collected in previously unpaid taxes as a result of the information supplied by those whistleblowers. The $104 million awarded to whistleblower Bradley Birkenfeld significantly boosted the IRS award total. Without the money awarded to Birkenfeld, the number would be more in line with the payouts for fiscal year to 2011 when the IRS paid out $8 million in awards based on $48 million in collections.
The United States (US) Commodity Futures Trading Commission (CFTC) has announced that it has filed and settled charges against Gelber Group (Gelber) for reporting orders in pre-opening trading sessions of the NASDAQ E-mini 100 futures contract and then cancelling them before the open of trading. The practice constituted a trading abuse by distorting prices in the exchange's indicative opening price, in breach of the Commodity Exchange Act and CFTC Regulation 1.38, according to the CFTC.
The Australian Securities and Investments Commission (ASIC) has announced that it has cancelled the credit licence of household goods rental company Zaam Rentals Pty Ltd (Zaam) and has banned director Akash Bharadwj and former director Amandeep Sabharwal from engaging in credit activities for six years and six years respectively.
The United Kingdom Financial Services Authority (FSA) has announced that Swiss-based financial services company UBS AG (UBS) is to pay a fine and damages for its failures in the sale of the AIG Enhanced Variable Rate Fund (the Fund), which was suspended after AIG's share price collapsed during the global financial crisis (GFC). The FSA stated that UBS has been fined £9.45 million and is expected to pay approximately £10 million in compensation to customers who were mis-sold the Fund.
The United States (US) Commodity Futures Trading Commission (CFTC) that it has obtained a federal court Consent Order (12 January 2013) against J. Hansen Investments (JHI) and its owner and sole employee Jonathan Hansen, which requires them to settle fraud and misappropriation charges in connection with their operation of a commodity pool scheme.
A pivotal figure in the conviction of disgraced hedge fund manager Raj Rajaratnam, Roomy Khan, was sentenced to one year in prison last week after previously pleading guilty to both illegally passing inside information and obstruction of justice. According to Judge Rakoff, despite the assistance Khan provided prosecutors in the case against Rajaratnam, her exploits were serious enough to necessitate a prison term. Rakoff also said the sentence would send a “very important message” about the consequences of obstructing a federal investigation. In a separate action, Jason Pflaum was sentenced to two years of probation for securities fraud and conspiracy to commit securities fraud.
Barclays Bank (Barclays) chief executive Antony Jenkins has waived his bonus for 2012 in view of public interest and the "multiple issues ... making besetting the bank", concluding that "it would be wrong ... to receive a bonus". Reportedly, in addition to the £290 million fine to settle Libor rigging, Barclays has been accused of mis-selling interest rate swaps and payment protection insurance (PPI) and manipulating energy prices.
The United States (US) Department of Justice (DoJ) has announced that it is seeking more than US$5 billion in a lawsuit against rating agency Standard & Poor's Rating Service (S&P) and its parent company The McGraw-Hill Companies for losses that resulted from the agency's mortgage bond ratings. The suit accuses S&P of deliberately inflating its ratings on collateralised debt obligations and residential mortgage-backed securities in 2007 in order to win revenue from issuers and build its market share, with charges including wire fraud, mail fraud and financial institution fraud.
The United Kingdom Financial Service Authority (FSA) has released Four building blocks of efficient capital markets (1 February 2013), a speech delivered by FSA markets director David Lawton at the Practising Law Institute Conference. Mr Lawton's discussion focussed on ethical market behaviour and effective corporate governance.
The United States (US) Department of Labor (DoL) has announced that ING Life Insurance and Annuity Co (ILAC) has agreed to provide a US$5.2 million payment to certain retirement plan clients "adversely affected by its undisclosed practice of keeping investment gains achieved when the company failed to process requested transactions in a timely manner". According to the DoL, the failure was a breach of the Employee Retirement Income Security Act (ERISA).
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