Fraud

Fraud is the making of false representations or engaging in deceptive behavior in order to unlawfully secure financial or personal gain. 
News & Analysis as of

Investment Firm Fined $15 Million for Cherry Picking and Soft Dollar Schemes

An investment firm's plan to defraud clients out of $10.9 million landed it a $15 million penalty from the U.S. Securities and Exchange Commission (SEC). On top of the penalty, the firm must disgorge — or give up the profits...more

Missouri Supreme Court Holds Statute Capping Punitive Damages Violates Right To Trial By Jury

On September 9, 2014, in a unanimous opinion authored by the Honorable Patricia Breckenridge, the Missouri Supreme Court struck down as unconstitutional a Missouri statute which imposed a cap on the amount of punitive damages...more

False Claims Act Update

New Criminal Division Review Process for Qui Tam Complaints Expands Main Justice Involvement and Threatens Greater Criminal Exposure in Whistleblower Investigations. The Assistant Attorney General for the Criminal...more

FATCA Violation Underlies Latest US Tax and Securities Fraud Charges

Indictment demonstrates the strength of US law enforcement efforts to combat offshore fraud and is the first to charge a FATCA violation. On September 9, 2014, in US v. Robert Bandfield, et al., federal prosecutors in...more

SEC Increases Focus on Accounting and Financial Fraud at Public Companies

“I would describe the time period we are living through as an era of creative and aggressive enforcement by the US Securities and Exchange Commission (SEC),” said Latham & Watkins partner John Sikora. “The SEC has set a...more

Loginovskaya v. Batratchenko: The Second Circuit Limits the Reach of Commodities Fraud Claims

In Loginovskaya v. Batratchenko (“Loginovskaya”), the US Court of Appeals for the Second Circuit ruled in a 2-1 opinion that private commodities fraud claims under the Commodity Exchange Act (the “CEA”) may proceed only if...more

Ninth Circuit Holds That Loan Purchasers Are Victims Under the MVRA

The US Court of Appeals for the Ninth Circuit recently affirmed a restitution order in favor of both the originator and purchaser of two fraudulently obtained mortgages under the Mandatory Victim Restitution Act (MVRA). ...more

Protecting the bank’s position when customers fall hook, (on)line and sinker for vishing frauds

As fraud continues to cost the UK economy billions each year, bank customers are now looking to the banks to cover their losses. What steps should banks take to defend themselves against such claims? Online banking...more

Eighth Circuit Rules Certain FCA Whistleblowers Are Not Required To Identify Specific Examples of Fraud Under Rule 9(b)

On August 29, 2014, the Eighth Circuit ruled that False Claims Act (FCA) whistleblowers with knowledge of employer billing practices are not necessarily required to identify specific examples of fraud to survive a Rule 9(b)...more

Is China More Harsh on Whistleblowers than Fraudsters?

37-year-old Kun Huang, a Chinese-Canadian citizen, is finally returning to his home in Vancouver after spending the past two years in a Chinese jail. During his time there, he was briefly released on bail, but quickly...more

Fraud and Bribery – They Go Hand in Hand

Compliance officers need to dig into and understand a company’s internal controls. Many compliance officers tend to leave that issue to Internal Auditors – that is a big mistake....more

EY Fraud Survey & Compliance Fatigue. Do as I say not as I do.

A few weeks ago I posted “EY Global Fraud Survey: “Depressing,” yes, surprising, no” and shortly thereafter, Philipp Kloeber, Consultant at Ernst & Young, Melbourne, Australia was kind enough to refer me to the EY paper...more

Call Me... Maybe? - how to avoid being a phone fraud victim

According to a recent survey conducted by The Harris Poll, about 17.6 million Americans lost an estimated $.86 billion as a result of phone fraud – and that was just in the last year. That averages out to a loss of $489 per...more

Commissioner’s Dissent May Signal Harsher Sanctions Against Accountants

Commissioner Luis A. Aguilar provided the most recent illustration of the SEC’s renewed emphasis on enforcement actions involving accounting and financial statement fraud when, on August 28, 2014, he issued a rare written...more

Former Analyst Claims Moody’s Falsely Inflated Ratings

Former Moody’s analyst, Ilya Kolchinsky, has accused the credit rating powerhouse of overstating its ratings for countless toxic mortgage-backed securities that caused the financial meltdown in 2008, misleading investors and...more

This Week In Securities Litigation

The Commission prevailed on summary judgment in an action against a broker which alleged he misappropriated client funds. The agency also filed actions centered on: an audit failure; the EB-5 immigration program; undisclosed...more

Sixth Circuit says ERISA does not preempt state law claim for fraudulent inducement.

The Sixth Circuit recently held that ERISA did not preempt a plan participant’s claim for state law fraudulent inducement. McCarthy v. Ameritech Pub., Inc., No. 12-4510, 2014 WL 3930572 (6th Cir. 2014). Defendant-API’s...more

Status Updates - August 2014 #13

..Blind spots. Self-driving cars are an excellent example of innovation, and the ones with Google technology have already traveled more than 700,000 miles. But what if a self-driving car doesn’t “see” a new traffic light or a...more

Federal Court in District of Columbia Dismisses Whistleblower Claims of Former Fannie Mae Employee

On August 25, 2014, the District Court for the District of Columbia dismissed a claim brought by a former employee of Fannie Mae alleging violations of the anti-retaliation provisions of the Sarbanes-Oxley Act and the...more

How due diligence plays a role in anti-corruption compliance

With the increasing frequency and expanding scope of enforcement globally, organizations need to devote plenty of attention to anti-corruption due-diligence of third-parties that they engage. The value of due diligence is...more

A Compilation of Enforcement and Non-Enforcement Actions

SEC Proposes Extension of Principal Trade Rule for Registered Advisers/Broker-Dealers - The SEC has proposed extending to December 31, 2016, the sunset date for the expiration of Rule 206(3)-3T (the “Rule”) under the...more

CEO, CFO Charged in SEC Financial Fraud Action

Since the formation of the financial task force, and its related data group, there has been speculation regarding the focus of the new program and the impact of big data techniques. One indication of how the program could...more

Data protection authority approves insurance antifraud registry

Data protection rules will be adequately protected through the registry to be set up against frauds in the insurance sector according to the Italian data protection authority. ...more

ParkCentral v. Porsche: The Second Circuit Signals New Lines of Defense to Extraterritorial Securities Fraud Claims

In ParkCentral Global Hub Ltd. v. Porsche Automobile Holdings SE (“ParkCentral”), the US Court of Appeals for the Second Circuit held that domestic securities transactions that did not involve the foreign defendant, whose...more

Car Dealership Employee Fired After Complaining About Fraudulent Warranty Claims May Sue For Wrongful Termination in Violation of...

The Fourth District Court of Appeal recently held that a former car dealership employee’s allegation that he was terminated over his complaints of fraudulent warranty claims was sufficient to support a cause of action for...more

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