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Market Cop: July 25, 2010 - July 31, 2010

Wyly brothers built an empire side-by-side

By Zachary A. Goldfarb and Philip Rucker Saturday, Jul 31, 2010 Born during the Depression in a northeast Louisiana plantation town of 3,000, Charles Wyly and his younger brother Sam have been inseparable since childhood: numbers 3 and 13 on...

By Zachary Goldfarb  |  July 31, 2010; 12:45 PM ET  |  Permalink  |  Comments (1)
 
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SEC tells Congress new law doesn't block FOIA

Responding to concerns that the new financial regulation law blocks the public from filing requests under the Freedom of Information Act with the Securities and Exchange Commission, SEC Chairman Mary L. Schapiro has written letters to Rep. Barney Frank and Sen. Chris Dodd, reassuring them that the SEC is still responsive to public records requests.

By Zachary A. Goldfarb  |  July 30, 2010; 4:39 PM ET  |  Permalink  |  Comments (1)
 
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The limits of enforcement: Citigroup and Wylys

The headline-grabbing cases unveiled by the SEC on Thursday -- Citigroup and the Wyly brothers -- have exposed the great limits of financial regulation and enforcement.

By Zachary Goldfarb  |  July 30, 2010; 1:01 PM ET  |  Permalink  |  Comments (15)
 
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The Wylys's GOP contributions

The Center for Responsive Politics has published an article looking at the contributions of the Wyly brothers--accused of a massive securities fraud--to political candidates. Here's an excerpt of the center's spreadsheet looking at donations to candidates (only those receiving $4,000...

By Zachary Goldfarb  |  July 30, 2010; 9:30 AM ET  |  Permalink  |  Comments (4)
 
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SEC says Wylys used money to buy art and Aspen real estate, make charitable contributions

The Securities and Exchange Commission's complaint alleging a massive fraud by Texas billionaires Sam and Charles Wyly paints an unusually detailed picture of how they used hundreds of millions of dollars in allegedly ill-gotten gains to buy art and condos,...

By Zachary Goldfarb  |  July 29, 2010; 8:17 PM ET  |  Permalink  |  Comments (9)
 
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The Wylys respond

Here are comments from William A. Brewer III, partner at Bickel & Brewer and lead counsel for the Wylys: "After six years of investigations, the SEC has chosen to make claims against the Wyly brothers - claims that, in our...

By Zachary Goldfarb  |  July 29, 2010; 8:17 PM ET  |  Permalink  |  Comments (5)
 
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Politically connected Wyly brothers charged in massive fraud

Samuel Wyly and Charles Wyly -- billionaire brothers in Texas who have spent millions funding political campaigns -- committed violations of federal securities laws and fraud by using offshore accounts to secretly trade the shares of public companies whose boards...

By Zachary Goldfarb  |  July 29, 2010; 6:20 PM ET  |  Permalink  |  Comments (91)
 
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Citigroup responds to $75 million settlement

In the wake of a $75 million settlement with the SEC, Citigroup released this statement: "We are pleased that we have reached agreement with the SEC to put this matter concerning certain 2007 disclosures behind us, and that the SEC...

By Zachary Goldfarb  |  July 29, 2010; 4:40 PM ET  |  Permalink  |  Comments (0)
 
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Why Citigroup may matter more than Goldman

In just about every way, going after Goldman Sachs is far sexier than going after Citigroup. The SEC held a dramatic press conference with a dozen investigators the day it announced a $550 million settlement with Goldman. Countless pages of...

By Zach Goldfarb  |  July 29, 2010; 3:44 PM ET  |  Permalink  |  Comments (4)
 
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Citigroup to pay $75 million to settle SEC charges it misled investors over subprime investments

Citigroup, one of the nation's largest banks, agreed Thursday to pay $75 million to settle a Securities and Exchange Commission complaint that it misled investors about $40 billion of its holdings in sub-prime mortgage investments that sent the bank...

By Zachary Goldfarb  |  July 29, 2010; 2:11 PM ET  |  Permalink  |  Comments (27)
Categories:  SEC  
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Does new financial law block FOIA requests at SEC?

Fox is trying to get documents from the SEC related to why the agency failed to catch the Bernard Madoff and R. Allen Stanford frauds. These failures cost thousands of investors billions of dollars, and the agency probably should comply with Fox's request, even if it means the commission would have to vote to override the agency's confidentiality rules.

By Zach Goldfarb  |  July 28, 2010; 2:59 PM ET  |  Permalink  |  Comments (2)
Categories:  SEC  
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GE bribed Iraqis to win UN contract, SEC says

eneral Electric agreed Tuesday to pay $23.4 million to settle a Securities and Exchange Commission complaint that GE bribed Iraqi government officials to win contracts to supply medical and water purification equipment under the U.N. Oil for Food program. The SEC alleges that two GE subsidiaries and two companies the conglomerate later acquired paid $3.6 million in kickbacks to the Iraqi Health Ministry and Iraqi Oil Ministry for valuable contracts. The bribes, which are illegal under the Foreign Corrupt Practices Act, came in the form of cash, computer equipment, medical supplies and services.

By Zach Goldfarb  |  July 27, 2010; 1:55 PM ET  |  Permalink  |  Comments (0)
 
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Schapiro tells the opposition she's moving forward with reg reform

SEC Chairman Mary Schapiro announced Tuesday that the agency would begin collecting public comment on the host of new rules it must write for the financial markets under the Dodd-Frank law even before it officially proposes them. Schapiro made the...

By Zachary Goldfarb  |  July 27, 2010; 1:48 PM ET  |  Permalink  |  Comments (0)
 
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BP's record as a market manipulator

Let's not forget that BP's record includes accusations--and evidence--of wrongdoing that go well beyond the Deepwater Horizon explosion. The company, which announced a $17 billion loss Tuesday, also has faced civil and criminal charges that it uses its massive financial...

By Zachary Goldfarb  |  July 27, 2010; 9:45 AM ET  |  Permalink  |  Comments (1)
 
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Top Barney Frank aide heading to Treasury

The top spokesman for Barney Frank, chairman of the House Financial Services Committee, is leaving Congress to help run public affairs for Treasury Secretary Timothy Geithner. Steven Adamske, who has served as Frank's communications director through the tumult of the 2008 financial crisis and the effort to overhaul financial regulation, will replace Andrew Williams, deputy assistant secretary for public affairs.

By Zach Goldfarb  |  July 27, 2010; 8:45 AM ET  |  Permalink  |  Comments (3)
 
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SEC pays $1 million to woman who ratted on her ex

With powerful senators watching with a close eye, federal investigators search and search for evidence of insider trading in shares of Microsoft. One of Wall Street's best-known hedge fund managers is targeted, but the feds can't find proof. Years pass and they close the case. Then a nasty, and apparently unrelated, divorce battle ensues in Connecticut. A woman discovers evidence potentially implicating her husband and the hedge fund. Investigators believe they've found a smoking gun, shut down the fund and assess tens of millions of penalties. And then they pay $1 million to the woman for ratting on her ex.

By Zach Goldfarb  |  July 26, 2010; 4:03 PM ET  |  Permalink  |  Comments (3)
Categories:  SEC  
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Do we need to send Goldman execs to jail?

Even if the $550 million were a lot of money for Goldman (which it's not), its shareholders are paying the money. Goldman must change its business practices some, but only in commonsense ways that will benefit the bank's well-heeled clients. A more dramatic action would be to send relevant Goldman executives to jail. That'll stop bad conduct in its tracks. That, of course, is the purview of the Justice Department since the SEC doesn't have criminal authority. But the odds that Justice will bring a case are low since many questioned whether the SEC's civil case, which has a lower threshold of wrongdoing, would triumph in court.

By zach Goldfarb  |  July 26, 2010; 2:01 PM ET  |  Permalink  |  Comments (0)
Categories:  SEC  
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