Happy holidays – the good news from 2013

2013 has been a fantastic year for financial services compliance observers. Thanks to the efforts of a District Attorney in New York, the enforcement team at the Financial Conduct Authority in the UK and the selfless past acts of certain traders, Libor rate submitters, the odd Leviathan rogue trader and one very happy whistle-blower in the US, the compliance press has been full of interesting stories and good cheer.

Payback time

A Morgan Stanley fund manager has been ordered to repay a whopping USD31,067,356.76 he had earned at the bank, after he pleaded guilty to conspiracy to trade on insider information for three years between 2007 and 2010.

The disgustingly large fee is broken down into a USD1.5m annual salary over three years and the rest made up from management fees and bonuses. It is equivalent to the salary of more 2,060 minimum wage earners in the US, more than 45,000 minimum wage earners in India.

Joseph “Chip” Skowron III’s  annual salary of around USD8.8m in three years in question could have bought 28 homes in the US at the average price of USD313,600 in 2007.

Although not directly connected, this story should add some festive cheer to the campaign urging Wall Street bankers to donate bonuses to the homeless. Would Morgan Stanley consider handing this USD31m Christmas bonus to the cause?

Follow @other98 for updates on the homeless bonus campaign, @complianceex for good compliance news updates. On entirely different note, follow @gselevator for comments heard in the lifts at another New York investment bank.

SAC employer denied trial delay

The next SAC Hedge Fund manager to be up in the dock on charges of insider trading has just had his bid to delay trial rejected by a judge in NY.

Mathew Martoma, the former portfolio manager named in the District Attorney’s indictment of the SAC group of companies will stand trial on securities fraud charges as planned on January 6th. His former colleague Michael Steinberg will spend Christmas pending sentencing after being found guilty of five counts of securities fraud which stemmed from insider trading. Steinberg reportedly fainted when he heard the news; he faces up to 25 years behind bars, according to this article.

Martoma’s legal team requested the delay, as the news reports surrounding Steinberg’s conviction may influence any jury selected. The judge denied the request.

“The fact of the matter is, there is a piece of news about SAC nearly every day,” he said.

Six other SAC employees pleaded guilty to insider trading related charges. Steve Cohen, the SAC owner mentioned in the indictment has yet to face any individual charges but Preet Bharara has made it clear that settling the USD1.8bn fine and indictment does not rule out individual prosecutions. gainst the SAC Entity Defendants, any owner, shareholder, or employee of the SAC Entity Defendants or any other person.”

Related articles – Vanity Fair comes before a fall

I am following @agufonte on Twitter for updates on this story.

The 14m dollar whistle-blower

In October this year, one lucky whistle-blower received a whopping USD14m pay-out from the US Securities and Exchange Commission’s Dodd Frank Whistleblower Program. The unnamed whistle-blower gave the SEC information on investor fraud which allowed them to close the case and recover substantial amounts on investor funds. The programme rewards whistle-blowers in successful cases with between 10% and 30% of the total recovered – so that is at least USD140m in funds recovered for investors.

Follow @stopfraud for whistle-blower updates

Related articles Blowing the whistle on money laundering

Corruption campaigns in Asia take hold

Thailand is in the throes of a campaign to oust Prime Minister Yingluck Shinawatra, her supporters and all influences of Thaksin Shinawatra, the PM’s brother who, as many people believe is still pulling the strings on Thai politics from his Dubai exile. On Sunday, tens of thousands took to the streets of Bangkok in a peaceful demonstration for democracy. Demonstrators, through protests and a successful on-line campaign have managed to postpone the passing of an Amnesty Bill which would have wiped clean convictions against Thaksin and his cohorts found guilty of electoral fraud in 2010 and allowed them back into the country without facing charges. The drama in Thailand will play out for the next few weeks as new elections are planned for February 2nd 2014.

In New Delhi, the head of the Aam Aadmi political party, set up to challenge corruption in India, will take up the post of Delhi’s chief minister and holder of the purse strings. The AAP was born out of the anti-corruption protests and hunger strike led by Anna Hazare which started in 2010 in an attempt to gain transparency on what politician’s earn and spend money on.

Power corrupts, and there is no saying that the newly elected in both Thailand and India will be able to remain true to their anti-bribery standpoints when faced with institutionalised corruption, however  it is good to see the people’s voices heard following protests in Delhi and Bangkok.

India is ranked 94th and Thailand 102nd of 177 countries in the Transparecny International Corruption Perceptions Index 2013.

Follow @ipaidabribe , @anticorruption, @CMDThai, @RichardBarrow

Related articles: V for Thailand, Tax, corruption and the poverty line in India

More repayments to Hong Kong investors

A court in Hong Kong has ordered the Tiger Asia Hedge Fund to repay HKD45.3m (USD5.8m) to  investors who lost out due to insider trading and stock market manipulation at the fund.

Follow me @Helenogorman

There have been many more happy stories in the news this year, and hopefully more to come in 2014. In the meantime, I thank you all for reading and supporting Financial Crime Asia in the past year and wish you a prosperous 2014.

Also, thanks to all the insider dealers, market manipulators, fraudsters, money launderers, bribers, corrupt officials and thieves out there without whom, Financial Crime Asia would be a set of blank pages.


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