Wall Street Fraud
Interesting News
$357M Fannie Mae Fund to Be Distributed by SEC
Category: Interesting News
Fannie Mae settled allegations in May 2006 that it altered its Securities and Exchange Commission financial reports and filings by $11 billion between 1998 and 2004. A fund was set up to provide partial compensation back to the victims of this fraud. The U.S. Securities and Exchange Commission began a distribution process on April 30th in the amount of $357 million to settle fraud charges with Fannie Mae.
Wachovia to pay $25 mln over research conflicts
Category: Interesting News
After a 28 month probe involving biased research of their stock analysts in order to help win investment banking business, Wachovia agreed to a $25 million fine by the North American Securities Administrators Association.
This is the latest and possible the last brokerage to pay a fine for biased research. Other brokerage firms that previously paid large fines for biased research included Bear Stearns, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Chase & Co., Lehman Brothers, Merrill Lynch, Morgan Stanley, Piper Jaffray and Thomas Weisel. Citigroup paid out the largest fine of $400 million.
Court Strikes Down Hedge Fund SEC Registration Rule
Category: Interesting News
A U.S. Court of Appeals for the District of Columbia Circuit struck down a Securities and Exchange Commission rule requiring Hedge Fund advisers to register with the Securities and Exchange Commission as investment advisers.
The SEC rule provided for stricter regulations and random inspections of Hedge Funds which are now a $1.1 trillion industry.
The court ruled that the SEC rule was "arbitrary" since it required registration for those with fifteen or more investors and $25 million in assets to register with the SEC as an investment advisers by early 2006 while at the same time exempted Hedge Funds with one hundred or fewer investors from the Investment Company Act regulations.
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Tax Talks between SEC and IRS
Category: Interesting News
There were recent discussions between Chairman of the Securities and Exchange and the Commissioner of the IRS to require public companies to make public their Corporate tax returns.
While Corporate watchdogs would like to see tax returns made public, corporations are concerned that if their tax returns were made public, their competitors would learn information about the corporations such as research and development budgets which would not be in the best interest of that corporation.
The conflict in the relationship between tax and corporate earnings is that corporations want to show maximum earnings to shareholders while paying the smallest amount in taxes. Right now, companies financial reports include a line for tax expenses.