Banking News – Ex-Barclays man ‘passed tips to plumber’
 Former boss charged with giving insider in rank on imminent mergers to friend
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/0/56e21a14-277a-11e6-8b18-91555f2f4fde.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct
Month: May 2016
Ex-Barclays man ‘passed tips to plumber’
Banking News – Ex-Barclays man ‘passed tips to plumber’ Former boss charged with giving insider in rank on imminent mergers to friend
FT.com – Banks – http://www.ft.com/cms/s/0/56e21a14-277a-11e6-8b18-91555f2f4fde.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct
Community Business Bank in Calif. Redeems Tarp-Related Shares
Banking News – Union Affair Bank in Calif. Redeems Tarp-Related Shares Community Affair Bank in West Sacramento, Calif., has finally place the Uneasy Asset Relief Program in the past.
Union Banking – http://www.americanbanker.com/news/union-banking/union-affair-bank-in-calif-redeems-tarp-related-shares-1081274-1.html
NCUA Bans Six from Industry
Banking News – NCUA Bans Six from Diligence The latest crop of veto orders includes one against an worker caught up in the fraud that led to the failure of Taupa Lithuanian CU.
Union Banking – http://www.americanbanker.com/news/union-banking/ncua-bans-six-from-diligence-1081272-1.html
SEC Halts Ponzi Scheme Aimed at Middle Class
Banking News – SEC Halts Ponzi Scheme Aimed at Middle Class 
The Securities and Chat Fee has charged two California men and their investment firm with in commission a Ponzi scheme as they alleged to dedicate physically to in serving middle-class investors and securing very pricey returns by investing in hot pre-IPO stocks. The agency also obtained a court-ordered asset freeze against them.
The SEC alleges that instead of using the firm’s alleged proprietary trading models and investing in pre-IPO shares of well-known tech companies like Uber, Alibaba, and Airbnb as promised to investors, Jaswant “Jason” Gill and Javier Rios in person pocketed at least $2.8 million in shareholder funds, using some of that money to pay for excursions to high-end restaurants and luxury retail stores as well as jaunts to Las Vegas casinos, gentlemen’s clubs, and certified generous events. They never in fact invested in any pre-IPO shares, and have been using money from new investors to pay held returns to earlier investors. They have raised approximately $10 million through their firm, JSG Capital Funds, and related entities, by catering to average retail investors and gifted them special investment opportunities “earlier only void to the one-percenters,” with cast iron annual returns of up to 60 percent.
According to the SEC’s protest filed in federal court in San Francisco, Gill in fastidious has brandished phony certificate, telling investors he founded his firm after serving as a administration boss at Morgan Stanley. He also boasted partnerships with several Silicon Valley venture capital firms. Gill, Rios, and JSG Capital Funds are not registered with the SEC or any state valve. Rios’s social class is in food service.
Investors can quickly and easily check the certificate of people selling funds and set up whether they are registered by using the SEC’s shareholder.gov website.
“We allege that Gill and Rios enticed middle-class investors by gifted access to highly coveted investment opportunities they claimed were typically modest for the rich,” said Jina L. Choi, Boss of the SEC’s San Francisco Regional Office. “Distinctiveness, very pricey returns, and exaggerated certificate are all classic hallmarks of a Ponzi scheme, and investors can protect themselves by heeding these red flags and read-through whether the person head-over-heels the funds is by the book registered to sell them.”
In a analogous action, the U.S. Attorney’s Office for the Northern Constituency of California today announced criminal charges against Gill and Rios.
The SEC’s protest seeks stable injunctions plus disgorgement and fiscal penalties from Gill, Rios, JSG Capital Funds and related entities. The SEC has obtained a court order to freeze the assets of Gill, Rios, and the JSG entities and preliminarily enjoin them from violating the antifraud provisions of the federal securities laws and raising money from investors.
The SEC’s investigation was conducted by Ruth Hawley and John Roscigno and supervised by Jeremy Pendrey of the San Francisco office. The SEC’s legal action will be led by Jason Habermeyer, Andrew Hefty, and Ms. Hawley. The SEC appreciates the help of the Federal Bureau of Investigation, U.S. Attorney’s Office for the Northern Constituency of California, Fiscal Diligence Dictatorial Power, and California Sphere of Affair Administration.
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More In rank
SEC Shareholder Alert: Beware of Fake or Exaggerated Certificate
SEC Shareholder Periodical: Risky Affair – Pre-IPO Investing
SEC.gov Updates: Press Releases – http://www.sec.gov/news/pressrelease/2016-99.html
SEC: Nashville Firm Schemed to Collect Extra Fees From Hedge Funds
Banking News – SEC: Nashville Firm Schemed to Collect Extra Fees From Hedge Funds 
The Securities and Chat Fee today charged a Nashville, Tenn.-based investment advisory firm and its owner with conniving to collect extra monthly fees from a pair of hedge funds they managed.
Examiners in the SEC’s Atlanta office detected the terrible behavior during an examination of Hope Advisers Inc., which is owned by Karen Bruton. The SEC alleges that in order to dodge the funds’ fee organize under which the firm is free to fees only if the funds’ profits that month exceed past losses, Hope Advisers and Bruton have been orchestrating certain trades that enable the funds to realize a large gain near the end of the current month while in the end guaranteeing a large loss to be realized early the later month. Without the falsified trades, Hope Advisers would have expected nearly no incentive fees since October 2014.
“We allege that Hope Advisers and Bruton overlooked investors by engaging in a pattern of illusory trades so they could take up again earning large incentive fees,” said Walter Jospin, Boss of the SEC’s Atlanta Regional Office.
Hope Advisers and Bruton have consented to an interim order that restricts them from accessing $7 million of their own funds in the funds, prohibits them from collecting any further fees unless they satisfy the high water mark in the funds’ fee organize, and restricts them from taking bonus funds in the fund. Without admitting or denying the allegations, Hope Advisers and Bruton also are preliminarily enjoined from violating the antifraud statutes of the federal securities laws.
According to the SEC’s protest filed in federal court in Atlanta:
- The two private hedge funds managed by Hope Advisers and Bruton – named Hope Funds LLC and HDB Funds LLC – have more than $175 million in net asset value.
- Hope Advisers receives its only compensation for administration the funds in the form of an incentive fee, calculated as a share of the profits (10 or 20 percent) earned in the funds’ fiscal proclamation each month.
- Hope Advisers and Bruton engaged in a relentless pattern of trading to inflate their compensation from the funds. They not only delayed consciousness of trading losses but also intentionally sized certain trades so the funds realized a profit every month.
- The scheme has enabled Hope Advisers to avoid consciousness of more than $50 million in losses in the hedge funds while earning millions of dollars in fees to which they were not free.
- Without the falsified trades, Hope Advisers would have expected nearly no incentive fees from at least October 2014 through the present.
The SEC’s protest charges Hope Advisers and Bruton with violating or aiding and abetting violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Chat Act of 1934, and Rule 10b-5 as well as Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940, and Rule 206(4)-8. The SEC’s protest seeks disgorgement of ill-gotten gains plus appeal and penalties as well as stable injunctions.
The protest also names Bruton’s charity called Just Hope Foundation as a relief defendant for the purposes of persistent money it expected out of the fees to which the firm was not free. The protest does not allege that the Just Hope Foundation participated in the misconduct.
The SEC examination that learned the terrible behavior was conducted by Jamila Abston, Elaina Labossiere, and Ed McConnell under the supervision of Bill Royer and with help from Terry Moran in the Chicago office and Jim Richardson in the Miami office. The ensuing investigation was conducted by Peter Diskin, Graham Loomis, Joshua Mayes, Robert Gordon, and Grant Mogan in the Atlanta office with help from Mr. Moran and Mr. Richardson. The investigation was supervised by William P. Hicks, the Normal Regional Boss of Enforcement in the Atlanta office.
SEC.gov Updates: Press Releases – http://www.sec.gov/news/pressrelease/2016-98.html
Four Things to Watch for in the CFPB’s Payday Lending Proposal
Banking News – Four Things to Watch for in the CFPB’s Payday Lending Bid The Consumer Fiscal Safeguard Bureau will unveil sweeping federal set of laws Thursday for payday lenders that could open the door for struggle from banks, while forcing lenders to go toward longer-term refund loans. Here’s what to track when the plot is unhindered.
Union Banking – http://www.americanbanker.com/news/law-parameter/four-things-to-watch-for-in-the-cfpbs-payday-lending-bid-1081271-1.html
BB&T’s Dealmaking Spurs Disruption in Pennsylvania
Banking News – BB&T’s Dealmaking Spurs Disruption in Pennsylvania At least three union banks have hired lenders who once worked at banks bought by BB&T. The inquiry is whether those lenders can coax their clients to also make a switch.
Union Banking – http://www.americanbanker.com/news/union-banking/bbts-dealmaking-spurs-disruption-in-pennsylvania-1081270-1.html
Small Bank Robs from the Rich for Its CFO
Banking News – Small Bank Robs from the Rich for Its CFO Wellesley Bancorp in Massachusetts has recruited a State Street executive to succeed its outgoing chief fiscal officer and treasurer.
Union Banking – http://www.americanbanker.com/news/union-banking/small-bank-robs-from-the-rich-for-its-cfo-1081269-1.html
Mortgage Company and Executives Settle Fraud Charges
Banking News – Finance Company and Executives Settle Fraud Charges 
The Securities and Chat Fee today announced that a California-based finance company and six senior executives agreed to pay $12.7 million to settle charges that they orchestrated a scheme to defraud investors in the sale of housing finance-backed securities cast iron by the Regime Inhabitant Finance Friendship (Ginnie Mae).
First Finance Corporation (FMC) is a finance lender that issued Ginnie Mae RMBS backed by loans it originated. The SEC alleges that from March 2011 to March 2015, FMC and its senior-most executives pulled current, the theater loans out of Ginnie Mae RMBS by falsely claiming they were incorrect in order to sell them at a profit into newly-issued RMBS. FMC caused its Ginnie Mae RMBS prospectuses to be fake and ambiguous by poorly and unrepresentatively using a Ginnie Mae rule that gave issuers the option to repurchase loans that were incorrect by three or more months.
According to the SEC’s protest filed in U.S. Constituency Court for the Central Constituency of California, FMC consciously delayed depositing checks from borrowers who had been behind on their loans, falsely claiming to both investors and Ginnie Mae that such loans remained incorrect when in reality they were current. This was done with the information and praise of the company’s senior-most management. After repurchasing at prices applicable to incorrect loans, FMC was able to resell the loans into new Ginnie Mae RMBS pools at higher prices applicable to current loans for an critical, nearly risk-free profit. Investors, meanwhile, were wrongly deprived of the appeal payments on the repurchased loans.
“FMC and its senior executives abused their privileged access to Ginnie Mae’s securitization program by allowing greed to corrupt their affair practices,” said Andrew Ceresney, Boss of the SEC’s Rift of Enforcement. “It is vital that we hold senior management fully blamed for this kind of terrible behavior, which we were able to accomplish here quickly due to the cooperation of company insiders.”
The executives charged with fraud in the SEC’s protest agreed to the later settlements:
- Chairman and CEO Clement Ziroli Sr. agreed to a $100,000 penalty.
- Company head Clement Ziroli Jr. agreed to pay 411,421.98 plus $27,203.92 in appeal and a $200,000 penalty.
- Chief fiscal officer Pac W. Dong agreed to pay a $100,000 penalty.
- Senior vice head Ronald T. Vargas, who headed FMC’s capital markets sphere, agreed to pay a $60,000 penalty.
- Senior vice head Scott Lehrer agreed to pay a $50,000 penalty.
- Administration boss of the servicing sphere Edward Joseph Sanders agreed to pay disgorgement of $51,576.51 plus $6,811.19 in appeal. Sanders cooperated in the SEC’s investigation.
In settling the charges without admitting or denying the allegations, each of the six executives agreed to be barred from serving as an officer or boss of a public company for five years.
The SEC’s protest alleges that FMC, Ziroli Sr., Ziroli Jr., Dong, Vargas, Lehrer, and Sanders debased Sections 17(a) of the Securities Act, Section 10(b) of the Securities Chat Act, and Rule 10b-5(a) and (c). The protest also alleges that FMC debased Rule 10b-5(b). The settlements are subject to court praise.
The SEC’s investigation was conducted by Allison Herren Lee and John B. Smith from the Complex Fiscal Instruments Unit in the Denver Regional Office. They were helped by Dugan Bliss and Judy Bizu, and the case was supervised by Laura M. Metcalfe and Michael J. Osnato. The SEC appreciates the help of Ginnie Mae.
SEC.gov Updates: Press Releases – http://www.sec.gov/news/pressrelease/2016-97.html
Central banks as last-gasp pawnbrokers
Banking News – Central banks as last-gasp pawnbrokers Lord King offers a novel uncommon to the alchemy of banking
FT.com – Banks – http://www.ft.com/cms/s/0/e4931794-2696-11e6-8b18-91555f2f4fde.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct
Banks lined up for $15bn Saudi bond sale
Banking News – Banks lined up for $15bn Saudi bond sale International debt debut could be as early as July
FT.com – Banks – http://www.ft.com/cms/s/0/9dd8cbfe-2755-11e6-8ba3-cdd781d02d89.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct
Investment Banker and Plumber Charged With Insider Trading
Banking News – Investment Banker and Plumber Charged With Insider Trading 
The Securities and Chat Fee today announced insider trading charges against an investment banker and his close friend, a plumber who allegedly helped remodel his bathroom and place cash in his gym bag in return for illicit tips about imminent mergers and acquisitions.
The SEC alleges that Steven McClatchey had regular access to highly confidential nonpublic in rank about impending transactions being pursued for investment bank clients. The Breakdown and Detection Center within the SEC Enforcement Rift’s Market Abuse Unit detected an illicit pattern of trading by Gary Pusey, who McClatchey allegedly tipped with nonpublic in rank on 10 uncommon occasions ahead of public merger announcements.
“We will take up again enhancing our market scrutiny techniques to detect patterns of insider trading and expose schemes, even when alleged perpetrators like McClatchey and Pusey attempt to avoid detection by as long as in-person tips and cash payments,” said Joseph Sansone, Co-Chief of the SEC Enforcement Rift’s Market Abuse Unit.
In a analogous action, the U.S. Attorney’s Office for the Southern Constituency of New York today announced criminal charges.
According to the SEC’s protest filed in federal court in Manhattan:
- The scheme started in early 2014 after McClatchey and Pusey became close friends upon meeting at a marina where they kept their fishing boats.
- One of McClatchey’s job responsibilities was to collect timely in rank about the makings mergers and acquisitions concerning clients of the investment bank where he worked in New York City. McClatchey misused his ready access to confidential in rank and evenly tipped Pusey.
- Pusey used the misappropriated nonpublic in rank as he bought securities in 10 companies before their acquisitions were announced freely, enabling him to breed $76,000 in illicit trading profits.
- In return for the tips, Pusey provided McClatchey with free air force during his bathroom remodel and paid him thousands of dollars in cash that he typically placed in McClatchey’s gym bag while at the marina or handed to him frankly in his garage.
The SEC’s protest charges McClatchey and Pusey with violating Section 10(b) of the Securities Chat Act of 1934 and Rule 10b-5 as well as Section 14(e) of the Chat Act and Rule 14e-3. The protest seeks a final discrimination ordering McClatchey and Pusey to pay disgorgement of their ill-gotten gains plus appeal and penalties, and everlastingly enjoining them from future violations of these provisions of the federal securities laws.
The SEC’s investigation was conducted by Mark S. Germann and Charles D. Riely of the Market Abuse Unit with help from John Rymas in the Breakdown and Detection Center. Also assisting in the investigation were Sandeep Satwalekar, James D’Avino, and Matthew Lambert of the New York Regional Office. The case has been supervised by Mr. Sansone. The SEC appreciates the help of the U.S. Attorney’s Office for the Southern Constituency of New York, the Federal Bureau of Investigation, and the Fiscal Diligence Dictatorial Power.
SEC.gov Updates: Press Releases – http://www.sec.gov/news/pressrelease/2016-96.html
Germany: Draghi v the banks
Banking News – Germany: Draghi v the banks Savers are fearful and politicians warn about the rise of populism. Both blame the ECB. Are they right?
FT.com – Banks – http://www.ft.com/cms/s/0/59461c9a-2420-11e6-aa98-db1e01fabc0c.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct
Spanish banks: popular raising
Banking News – Spanish banks: well loved raising A cash call poses questions about the level of provisioning
FT.com – Banks – http://www.ft.com/cms/s/3/395eb3e4-272f-11e6-8ba3-cdd781d02d89.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct
Bank Narrowly Survives Shareholder Vote to Find a Buyer
Banking News – Bank Attentively Survives Shareholder Vote to Find a Buyer First South Bancorp survived a close vote on a shareholder bid to “at once” take steps to sell the Washington, N.C., company.
Union Banking – http://www.americanbanker.com/news/dealmaking-approach/bank-attentively-survives-shareholder-vote-to-find-a-buyer-1081266-1.html
Iberdrola files lawsuit against Bankia
Banking News – Iberdrola files lawsuit against Bankia Spanish utility is seeking €12.4m in compensation for losses it suffered on €70m investment
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/0/89a87a0a-2744-11e6-8b18-91555f2f4fde.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct
Iberdrola files lawsuit against Bankia
Banking News – Iberdrola files lawsuit against Bankia Spanish utility is seeking €12.4m in compensation for losses it suffered on €70m investment
FT.com – Banks – http://www.ft.com/cms/s/0/89a87a0a-2744-11e6-8b18-91555f2f4fde.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct
US IPO market running on empty in 2016
Banking News – US IPO market running on empty in 2016 Second half of 2016 looks challenging for US IPO market
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/0/576379ae-2709-11e6-8b18-91555f2f4fde.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct
Alliance Trust: not worth saving
Banking News – Alliance Trust: not worth saving A bid deal with could refocus concentration on the savings unit
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/3/c48fc0cc-2737-11e6-8b18-91555f2f4fde.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct