Legal / Fraud

Citigroup Lost $15MM in CDO Blessed by S&P

Bloomberg reported that in just six months, S&P’s AAA blessing for a slice of a $1.5 billion CDO, underwritten by UBS AG, cost Citigroup its $15 million investment. read more

Bus Operator Pleads Guilty to Fraud in BALC Case

According to federal court documents, Roger Stephen Clary, owner and operator of Destination Adventures, pleaded guilty to one count of mail fraud for devising a scheme to defraud and obtain $1.6 million of a $4.5 million loan under false pretenses from Banc of America Leasing to acquire, outfit and lease six buses. read more

Law360: S&P Taps Heavy Hitter to Fight DOJ Suit

Law360 reported that noted trial attorney John Keker will represent S&P in a federal government suit alleging that it knowingly inflated ratings on residential mortgage-backed securities. read more

S&P Investigation Tagged With Codename 'Alchemy'

In a speech announcing the U.S. government’s lawsuit against S&P, Acting Associate Attorney General Tony West provides background and insights into the investigation that was tagged with the codename “Alchemy” by the Justice Department. read more

January Commercial Bankruptcy Filings Fall 26% From Last Year

The total commercial bankruptcy filings in January 2013 fell to 3,728, representing a 26% decline from the 5,006 business filings recorded in January 2012, according ABI and Epiq Systems. read more

McGraw-Hill, S&P Sued Over Mortgage-Bond Ratings

Bloomberg reported that McGraw-Hill and its S&P unit were sued by the U.S. over claims S&P knowingly understated the credit risks of bonds and derivatives that were central to the worst financial crisis since the Great Depression. read more

Estate of Defunct Palm Beach Finance Sues GE Capital

According to the Miami Daily Business Review, a lawsuit filed by Palm Beach Finance Partners against GE Capital alleges GE learned about the Thomas Petters Ponzi scheme long before it was exposed but kept silent to get back outstanding debt. read more

Reuters: Red Flags Revealed in Filings Linked to Cat Fraud

Reuters reported that a Chinese mining equipment company at the center of an alleged accounting fraud was also involved in a web of insider loans and asset transfers prior to its purchase by Caterpillar. read more

WSJ: Deal Gone Wrong Adds to Caterpillar's Woes in China

The Wall Street Journal notes in an article on Caterpillar's announcement that it discovered accounting misconduct at its Chinese maker of mine-safety equipment that the event is indicative of the company’s struggle to establish a place in the “rough-and-tumble” China market. read more

CAT Uncovers 'Misconduct', Will Take $580MM Q4 Charge

Caterpillar said that an internal investigation of a subsidiary of a recently acquired Chinese company has uncovered “misconduct” that will result in a Q4/12 non-cash charge of $580 million. read more

Two More EFI Defendants Sentenced for Fraud

Lancaster Online reported that two defendants in the Equipment Finance Inc. fraud case were sentenced a year and a day in prison for their roles in the scam. read more

SEC Charges Former Bank Execs for Understating Loan Losses

The SEC charged three former executives at Bank of the Commonwealth for understating millions of dollars in losses and masking the true health of the bank’s loan portfolio at the height of the financial crisis. read more

Two KPMG Auditors Charged for Failed Bank Audit

The SEC charged two auditors at KPMG for their roles in a failed audit of a NE-based bank that hid millions of dollars in loan losses from investors during the financial crisis. read more

Broker Sentenced in Muni 'Last Look' Bidding Case

The Justice Department announced that a former financial services broker was sentenced for his participation in involving investment contracts for the proceeds of municipal bonds. read more

Lenders to Pay $30MM Settlement to Le-Nature's Trustee

Law360 reported that a Pennsylvania bankruptcy judge approved a $30 million settlement between bottling company Le-Nature's and CIT and Krones AG. read more

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Terry Mulreany
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