Miami Entrepreneur Charged In Investment Scheme

The SEC has filed a Complaint against Miami entrepreneur Claudio Osorio for allegedly misrepresenting the success of his company

The SEC has filed a Complaint against Miami entrepreneur Claudio Osorio for allegedly misrepresenting the success of his company between 2007 and 2010. Osorio claimed to be able to produce housing materials that would withstand natural disasters.  He is said to have stolen almost half of the money raised to pay for his lavish lifestyle.  As reported, (more…)

Tagged with:
 

Altering the Report Card

Some have given into it and made a bad choice in response to that temptation.

I wonder if, like me, you ever had a report card that you didn’t want to show to your parents.  I wonder whether you ever earned a D and thought how, with an artful stroke of a pen, it could be made to look like a B. If not, you, like the rest of us humans, have had a moment in which you hoped that no one would discover your poor performance in some arena. You feared the consequences of that performance. The SEC has cooperated with criminal prosecutors to secure a conviction of two corporate officers who found themselves in just that situation. According to the SEC’s release: (more…)

Whistleblowers Expose Another Wave in the Financial Crisis

What will happen as more and more banks are exposed as book cookers?

Recently, I helped a former accountant for a publicly-traded bank holding company file a whistleblower claim with the SEC. This accountant had discovered a secret account at the bank, held off the books, where the bank parked distressed real estate. This bank is actively growing through acquisitions of failed banks from the FDIC, but it is doing so on the basis of phony financial statements. When the scheme comes to light and the SEC collects a massive fine from the bank, my client will reap a financial reward. (more…)

SEC Charges IndyMac Senior Officers with Hiding Bad Report Cards

The greater the access to your nest egg, the more important independent verification becomes.

Am I the only one who ever dreaded giving his parents a report card?  Well, that same impulse to avoid the consequences of bad performance is behind more corporate misconduct than you can imagine.  The SEC claims that three senior officers of failed mortgage lender IndyMac gave in to that temptation.  According to the SEC’s press release: (more…)

SEC Claims Auditor Didn’t

Scam artists sometimes invent auditors out of whole cloth.

The annals of securities fraud are full of auditors who didn’t audit.  The U.S. Securities and Exchange Commission believes it has found another.  This week, the SEC filed an enforcement action against ”Provident Capital Indemnity, Ltd. (“PCI”), its president Minor Vargas Calvo (“Vargas”), and its purported outside auditor, Jorge L. Castillo (“Castillo”).”  According to the SEC’s press release: (more…)

Attorneys and Accountants are Often Involved with Scams

What this means for investors is that the involvement of a lawyer or accountant should never give you peace about an investment.

Over two decades of protecting investors, I have come to appreciate how victims size up scams; I’ve seen the thought patterns that lead them to financial ruin.  When attorneys and accountants are connected to a scam, the thought pattern goes like this.  1.  Attorneys and CPAs have to study for many years and take tests to get their license to practice their profession.  2.  If they were involved in a fraud, they would certainly lose that license.  3.  No one would risk something that they had to work so hard to earn.  4.  Attorneys and accountants have put their stamp of approval on this investment.  5.  It must, therefore, be legitimate. (more…)

Former CFO of United Rentals, Inc. Headed to Prison

John Milne, former CFO of United Rentals, Inc., made the company look more profitable than it really was in order to prop up the price of the company’s stock.  He then sold his own shares, getting out before the truth could drive down the price of United Rentals shares.  The SEC’s litigation release about [...]

John Milne, former CFO of United Rentals, Inc., made the company look more profitable than it really was in order to prop up the price of the company’s stock.  He then sold his own shares, getting out before the truth could drive down the price of United Rentals shares.  The SEC’s litigation release about the case reads, in part:

(more…)

 

SEC Seeks Return of Executive Pay Earned While Corporation Was Engaged in Accounting Fraud

CSK Auto Corporation was an automotive parts and accessories retailer headquartered in Arizona.  In May 2009, the SEC instituted settled cease-and-desist proceedings against CSK and found that the company had fraudulently filed false financial statements for fiscal years 2002 through 2004.  The SEC has now filed suit against Maynard L. Jenkins, CSK’s former CEO, seeking to [...]

CSK Auto Corporation was an automotive parts and accessories retailer headquartered in Arizona.  In May 2009, the SEC instituted settled cease-and-desist proceedings against CSK and found that the company had fraudulently filed false financial statements for fiscal years 2002 through 2004.  The SEC has now filed suit against Maynard L. Jenkins, CSK’s former CEO, seeking to have him repay $2,091,020 in bonuses and $2,018,893 in company stock sales that he received in compensation while CSK was committing that fraud.  Section 304 of the Sarbanes-Oxley of 2002 deprives corporate executives of money that they earned while their companies were misleading investors.

The case is significant because the SEC does not allege that Jenkins knew about or participated in the fraud.  The SEC is nevertheless pursuing reimbursement from Jenkins.  Let’s pray that the SEC aggressively pursues many more such cases before congressmen beholden to big business succeed in taking away the SEC’s authority to do so.

 

 

 
professional wordpress themes