Month: November 2019

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Article: Morgan Stanley Places Four Traders on Leave in Wake of FX Probe

Article - Media

Morgan Stanley Places Four Traders on Leave in Wake of FX Probe

Aziz Abdel-Qader

Finance Magnates, 29 November 2019

Morgan Stanley has reportedly dismissed, or placed on leave, four currency traders after being caught out trying to conceal significant trading losses. The move comes amid investigations by the US bank into alleged charges that they exaggerated the performance of the FX options desk.

A Bloomberg report identified two London based traders – Scott Eisner and Rodrigo Jolig – and two senior New York-based colleagues, Thiago Melzer and Mitchell Nadel, who were running emerging-markets desk and macro trading in the Americas.

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Article: MiMedx former CEO and COO indicted for accounting fraud

Article - Media, Publications

MiMedx former CEO and COO indicted for accounting fraud

Carl Surran, 26 November 2019

Former MiMedx (OTC:MDXG -1%) executives Parker Petit and William Taylor are indicted by the Department of Justice on charges of accounting fraud during 2015-16 that overstated the company’s revenues and misled investors.
The SEC separately filed a civil suit against MiMedx, Petit, Taylor and former CFO Michael Senken, accusing them of conducting a “pervasive” accounting fraud during 2013-17. Continue reading “Article: MiMedx former CEO and COO indicted for accounting fraud”

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Paper: Analysis of Short Selling in Canada

Paper

Short Selling in Canada: Regulations are Weak and a New Path Forward is Needed to Reduce Systemic Risk 

Based on our research, it is clear that IIROC’s largely non-interventionist approach and its focus on maintaining liquidity have made Canadian companies attractive targets for short campaigns. From 2015 to 2018 there was an increase in the number of short campaigns in Canada, while generally in other jurisdictions there was a decrease. Additionally, the number of short campaigns in Canada is utterly disproportionate to the size of our capital markets when compared to the United States, the European Union and Australia (as examples). The reason for this seems clear: short selling regulations in Canada are out of step with regulations in those other jurisdictions – see Schedule A attached hereto. As a result of inherent weaknesses in the Canadian short sale regulatory regime, short sellers may well be attracted to the Canadian capital markets.

PDF (164 Pages): Paper Analysis of the Short Selling Landscape of Canada

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Fined: Coda Markets, Inc. fka PDQ ATS, Inc. Fined by FINRA

Fined

Coda Markets, Inc. fka PDQ ATS, Inc. Fined by FINRA

An AWC was issued in which the firm was censured, fined $90,000 and required to review and revise its systems and written procedures regarding the supervision of its Order Audit Trail System (OATS™) reporting to ensure that the systems and procedures are reasonably designed to achieve compliance with FINRA Rule 7450 and to implement and test all coding changes necessary to remediate the violations identified in the AWC. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to report Reportable Order Events (ROEs) to OATS and reported ROEs that contained inaccurate, incomplete or improperly formatted data.

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Fined: NYLIFE Securities LLC Fined by FINRA

Fined

NYLIFE Securities LLC Fined by FINRA

An AWC was issued in which the firm was censured, fined $250,000, ordered to pay $76,643.47, plus interest, in restitution to customers for realized losses, ordered to offer rescission to customers for unrealized losses totaling approximately $250,000, plus interest, and ordered to certify in writing that it has reviewed its systems for enforcing its written procedures governing the suitability of recommendations to purchase mutual funds, and that it has established and implemented systems for enforcing those procedures that are reasonably designed to achieve compliance with FINRA Rule 3110. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to enforce its written procedures for supervising the suitability of sales of higher-risk mutual funds that were subject to significant volatility.

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Article: These Are the Banks that Own the New York Fed and Its Money Button

Article - Media

These Are the Banks that Own the New York Fed and Its Money Button

Pam Martens, Russ Martens

Wall Street on Parade, 20 November 2019

The New York Fed has now pumped out upwards of $3 trillion in a period of 63 days to unnamed trading houses on Wall Street to ease a liquidity crisis that has yet to be credibly explained. In addition, it has launched a new asset purchase program, buying up $60 billion each month in U.S. Treasury bills. Based on the continuing escalation of its plans, it appears to be testing the limits of what the public will tolerate. We thought it was time to answer the question: who exactly owns the New York Fed and its magical money spigot that can pump trillions of dollars into Wall Street at the press of a button.

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Article: 5 Law Firms Launch Investigations into Aurora Cannabis Inc. for Securities Violations

Article - Media, Publications

5 Law Firms Launch Investigations into Aurora Cannabis Inc. for Securities Violations

Steven Lachard, 19 November 2019

Last week, Aurora Cannabis Inc. (NYSE:ACB) (TSX:ACB) shares fell following weak fiscal second-quarter earnings from Canopy Growth Corp. (NYSE:CGC) (TSX:WEED), as well as weaker fiscal first-quarter numbers of its own. According to the Motley Fool, this drop in share price made it “one of the worst-performing mid-cap stocks currently listed on the New York Stock Exchange (NYSE) this calendar year.” To add insult to injury, at least five different law firms have now launched investigations into Aurora Cannabis for a variety of allegations including securities fraud and more.
Continue reading “Article: 5 Law Firms Launch Investigations into Aurora Cannabis Inc. for Securities Violations”

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Article: Who’s Been Swimming Naked? We’re About to Find Out (It’s Time to Raise Capital)

Article - Media

Who’s Been Swimming Naked? We’re About to Find Out (It’s Time to Raise Capital)

David Spreng

Runway Growth, 18 November 2019

Every growth company on the planet should seriously consider raising additional capital now. The U.S. economy and capital markets are showing near-record valuations, performance and strength across the board. However, we are keenly aware of economist Herb Stein’s maxim, “If something can’t go on forever, it won’t.” Growth capital is readily available today—but likely won’t be for many companies in the near future.

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Article: US charges another former JP Morgan exec with market manipulation

Article - Media, Publications

US charges another former JP Morgan exec with market manipulation

Reuters . New York, 17 November 2019

The Department of Justice has charged another former JPMorgan Chase and Co executive with alleged racketeering and manipulating precious metals prices between 2008 and 2016, the latest in a string of similar prosecutions.

The indictment against Jeffrey Ruffo, who is also charged with other federal crimes including conspiracy to commit wire fraud, is the result of an ‘ongoing investigation’, federal prosecutors said in a statement. Ruffo is the sixth person to be charged with alleged fraud in connection to JPMorgan’s precious metals desk.

The case relates to spoofing, which involves placing bids to buy or offers to sell contracts with the intent to cancel them before execution, allowing spoofers to influence prices. In recent years there has a been a surge in spoofing related prosecutions in the United States by the Department of Justice and the Commodity Futures Trading Commission.

Ruffo could not immediately be reached for comment.

A JPMorgan spokesman did not immediately respond to a request for a comment. The US bank has said in recent regulatory filings that it is cooperating with various investigations relating to its metals trading practices.

According to the indictment, Ruffo worked at JPMorgan from 2008 to 2017 as a salesperson serving hedge funds investing in precious metals and he encouraged JPMorgan traders to place deceptive orders to create price advantages for his clients.

The indictment also alleged that Ruffo and his former colleagues defrauded JPMorgan’s clients who had invested in ‘barrier options’ by pushing option prices to levels that benefited the bank.

An option is a financial instrument that gives buyers the right to buy or sell an underlying asset at an agreed price and at a fixed time. Its value is tied to the value of the asset.

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Release: RM LAW Announces Investigation of Craft Brew Alliance, Inc.

Release

RM LAW Announces Investigation of Craft Brew Alliance, Inc.

15 November 2019

RM LAW, P.C. is investigating potential claims against the board of directors of Craft Brew Alliance, Inc. (“CBA” or the “Company”) (BREW) concerning possible breaches of fiduciary duty and other violations of law related to the Company’s efforts to sell the Company to Anheuser-Busch (“A-B”).

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Article: Toronto Transit Commission settles benefits fraud lawsuit

Article - Media, Publications

Toronto Transit Commission settles benefits fraud lawsuit

Staff , 15 November 2019

The Toronto Transit Commission has settled a 2016 lawsuit against its insurer for the alleged failure to detect a benefits fraud scheme involving orthotics store Healthy Fit Inc. To date, 10 people — nine former TTC employees and Healthy Fit owner Adam Smith — have been convicted in relation to the scheme. More than 250 TTC employees resigned or retired to avoid dismissal, or were dismissed outright, while an additional 14 were disciplined. “While terms of the settlement are confidential, the TTC is pleased to see this matter resolved in a way that allows both companies to move forward with a renewed commitment to preventing benefits fraud and penalizing those who commit it,” the TTC said in a press release.
Continue reading “Article: Toronto Transit Commission settles benefits fraud lawsuit”

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Fined: BGC Financial, L.P. Fined by FINRA

Fined

BGC Financial, L.P. Fined by FINRA

An AWC was issued in which the firm was censured and fined $40,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to immediately execute, route, or display customer limit orders in over-the-counter securities. The findings stated that the violations resulted from the firm’s delayed handling of limit orders that would lock or cross the market.

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Release: SHAREHOLDER ALERT Pomerantz Law Firm Investigates Claims on Behalf of Investors of Overstock.com, Inc. – OSTK

Release

SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims on Behalf of Investors of Overstock.com, Inc. – OSTK

11 November 2019

Pomerantz LLP is investigating claims on behalf of investors of Overstock.com, Inc. (“Overstock” or the “Company”) ( OSTK). Such investors are advised to contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888-476-6529, ext. 9980.

The investigation concerns whether Overstock and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.

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Article: Tower Research Capital pays $67m to settle spoofing charges

Article - Media

Tower Research Capital pays $67m to settle spoofing charges

Kadhim Shubber in Washington

Financial Times

Tower Research Capital in $67M settlement for spoofing futures. High-frequency trading firm Tower Research Capital will pay $67.4 million to settle allegations of spoofing by three former traders, the largest settlement to date associated with the illegal activity.

Full text at News.Law.

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