Wednesday, April 1, 2015

Tuesday, March 31 In Review: Whistleblowers, Charges, OPEC, Bankruptcy & Investment Reps Turning To Armed Robbery

A daily summary of government alerts for investors (GAFI). These are announcements and/or publications from government institutions that impact investors.
  • The SEC settled its 1st Whistleblower protection case against engineering firm KBR (NYSE: KBR). As a result, the company must pay $130K in fines and change the language in its employee confidentiality agreement. 
  • Facing a maximum sentence of 5 years in prison, Swiss asset manager, Peter Amrein, 53, pled guilty of conspiring with U.S. taxpayers to evade income taxes.
  • On March 26, the SEC obtained a judgment of over $5 million for a penny stock fraud case against StratoComm Corporation. The CEO of the company, Roger D Shearer and former Director of Investor Relations, Craig Danzig were also listed on the order. The order says that StratoComm issued and distributed public statements about the nature of the penny stock company. In actuality, StratoComm had no product and no revenue. 
  • The SEC charged former CEO of Silicon Valley-based technology firm Polycom (Nasdaq: PLCM) with using ~$200,000 in corporate funds for personal perks -- these perks were not explained to investors. He also created false reports to support these expenses including the use of "Polycom funds to travel with his friends and girlfriend to luxurious international resorts." Polycom the company was also charged and agreed to pay $750,000 to settle the charges.
  • Perhaps the winner in the "odd but true" category is the sad story of Leonard Eric Burd. Burd was a registered rep from October 1997 through October 2013. The broker-dealers he worked with include UBS Financial Services, Financial, LLC and Summit Brokerage Services. In August 2014 he plead guilty to robbing a Citizen's Bank in Natick, MA while armed with a gun or C4 explosives. He was sentenced to 3 to 5 years of prison.
  • The CFTC charged Maverick International, Inc. and its Principals Wesley Allen Brown and Edward Rubin with pool fraud and other violations. Purportedly based out of Wilmington, Delaware, the company is being charged with operating a fraudulent commodity pool.  The charges allege that as early as June 18, 2008 Maverick accepted more than $2 million to trade commodity futures contracts. They used the money to pay for their own personal and business expenses. The hearing is set for April 8.
  • The SEC published a bulletin about what really happens to the value of stock after bankruptcy. Please circulate. I'll be writing another post dedicated exclusively to this announcement shortly. 
  • On Monday, April 6 the President of the NY FRB will be meeting with several community leaders in New Jersey. Jersey continues to suffer more than New York in terms of economic recovery.
  • In other news, the US Energy Information Administration (EIA) confirmed that OPEC earned about $730 billion in net oil export revenues which represents an 11% decline from the $824 billion earned in 2013. The decrease is attributed to a decline in crude oil pries. The report suggests we could expect revenues to decline to $380 billion in 2015.
http://www.eia.gov/todayinenergy/detail.cfm?id=19231