Month: October 2016

Banking News – Small businesses shown route to uncommon finance
&nbspScheme will give SMEs second-hand by huge banks a more diverse range of lending options
FT.com – Banks – http://www.ft.com/cms/s/0/cd0a9132-9f8c-11e6-86d5-4e36b35c3550.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct

Banking News – As Tech Costs Spreads, Banks Need Better Coordination
&nbspAs more departments reach for a piece of the equipment budget, banks need to improve coordination to make sure the money is spent efficiently.
Union Banking – http://www.americanbanker.com/news/bank-equipment/as-tech-costs-spreads-banks-need-better-coordination-1092196-1.html

Banking News – Company Co-Founder Charged in Management Scheme
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The Securities and Chat Fee today charged the co-founder of a Minnesota-based energy company with manipulating its stock price and concealing his control of the company to attain valuable fiscal payouts. 

The company’s other co-founder agreed to pay nearly $8 million to settle break charges against him.  Three others also are charged in the case.

The SEC filed a protest against Ryan Gilbertson, who allegedly hatched and orchestrated the elaborate scheme to secretly siphon millions of dollars from Dakota Plains Worth, which operates an oil-shipping rail gift in North Dakota.  Gilbertson founded the company with Michael Reger. 

According to the SEC’s protest, Gilbertson and Reger installed their fathers as figurehead executives so they could secretly wield control of the company and issue millions of shares of stock to themselves, family, and friends.  They later hired one of their friends as CEO.  They allegedly caused the company to enter into an contract to borrow money from them under generous terms that built-in extra bonus payments to Gilbertson, Reger, and other lenders based on the price of Dakota Plains stock after 20 days of trading later a reverse merger into a company with freely-traded shares. 

According to the SEC’s protest, Gilbertson enlisted friends and friends counting Douglas Hoskins and Thomas Howells to plot wide sales and buys of Dakota Plains stock and cause the price to space rocket from 30 cents to more than $11 per share during that 20-day period.  The extravagant stock price constrained Dakota Plains to make bonus payments totaling $32 million to Gilbertson, Reger, and others.  After meeting his target to receive the bonus payments, Gilbertson stopped his alleged management efforts.  The stock price then steadily declined to pennies per share and was delisted a few months ago.

Hoskins and Howells are charged in the SEC’s protest along with Gilbertson for allegedly participating in his stock management actions.

“As alleged in our protest, Gilbertson enriched himself by more than $16 million through his secret control of the company while he and his friends defrauded shareholders and manipulated the stock price,” said David Glockner, Boss of the SEC’s Chicago Regional Office.  “Corporate insiders must fully release their stock ownership and trading actions and cannot abuse their power in order to secretly reward themselves.”

Reger consented to an SEC order finding that he obtained illicit payments and skirted public leak equipment by diffusion his Dakota Plains stock worth among 10 fiscal proclamation in uncommon names to hide that he owned more than one-fifth of the company’s shares and reaped millions of dollars in bonus payments.  Without admitting or denying the findings, Reger agreed to pay $6.5 million in disgorgement, $669,365.85 in appeal, and a $750,000 penalty.

Minnesota-based agent Nicholas Shermeta also consented to an SEC order finding that he solicited investors for Dakota Plains and not compulsory the stock to his clients at the registered brokerage firm where he worked, but poorly brokered the sales through his unregistered firm Napa Properties rather than through his employer.  Without admitting or denying the findings, Shermeta and Napa Properties agreed to pay $75,000 in disgorgement, $11,075.49 in appeal, and a $50,000 penalty.  Shermeta also agreed to be barred from the securities diligence with a right to apply for recall after three years.

The SEC’s protest against Gilbertson, Hoskins, and Howells seeks fiscal sanctions and injunctive relief as well as an officer-and-boss bar against Gilbertson.

The SEC’s investigation, which is long-lasting, is being conducted by Chris White, Craig McShane, and C.J. Kerstetter of the Chicago office.  The legal action will be led by Ben Hanauer and Jonathan Polish, and the case is being supervised by Robert Burson.

SEC.gov Updates: Press Releases – http://www.sec.gov/news/pressrelease/2016-231.html

Banking News – Audit Partner Charged in Failed Audits of Venture Capital Fund
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The Securities and Chat Fee today announced proceedings against a PricewaterhouseCoopers audit partner who served as date partner for the self-determining audits of a venture capital fund.

The SEC Enforcement Rift alleges that Adrian D. Beamish, who is based in San Jose, Calif., failed to study millions of dollars taken from Burrill Life Sciences Capital Fund III in related party transactions under the guise of “well ahead” management fees.  Beamish allegedly failed to set up whether the fund’s adviser had proper consent and rationale for taking the money.  Beamish also allegedly failed to ensure that the transactions were by the book told in the fund’s fiscal statements. 

The owner and principal of the investment adviser, G. Steven Burrill, settled an SEC case earlier this year that found that he spent the money he took from the fund to keep his other businesses afloat, travel on family vacations, and pay other unofficial private expenses.

“Auditors perform a vital check on falsified conduct, mainly when related party transactions are caught up,” said Jina L. Choi, Boss of the SEC’s San Francisco Regional Office.  “We allege that Beamish’s continual failure to implementation certified disbelief not permitted him from recognizing that Burrill was stealing shareholder money from the fund.”   

The administrative proceedings against Beamish will set up whether he should be floating from appearing or involved before the SEC as an accountant, which includes not participating in the fiscal exposure or audits of public companies.  The matter will be scheduled for a public hearing before an administrative law judge, who will prepare an initial declaration stating what, if any, corrective actions are apt.

The SEC Enforcement Rift’s investigation was conducted by Heather E. Marlow and John Roscigno and supervised by Tracy Davis in the San Francisco office.  The legal action will be handled by E. Barrett Atwood, Robert Tashjian, and Ms. Marlow.

 

SEC.gov Updates: Press Releases – http://www.sec.gov/news/pressrelease/2016-230.html

Banking News – Firm and Partner Charged With Issuing Falsified Audit Reports
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The Securities and Chat Fee today announced that a New York-based audit firm and a senior partner agreed to settle charges that they issued falsified audit reports in tie with public bond offerings by the town of Ramapo, N.Y., and its local enhancement corporation.

The SEC’s order finds that PKF O’Connor Davies and Domenick F. Consolo allowed Ramapo to record a $3.08 million receivable in its general fund for a material goods sale that Consolo knew had not occurred.  Consolo also ignored red flags and relied upon what turned out to be fake representations by Ramapo officials about certain other receivables, interfund transfers, and liabilities.  PKF O’Connor Davies failed to take apt steps to allay the risk of notes misstatements even after senior management became aware that Ramapo’s fiscal statements were the subject of manifold law enforcement investigations and Consolo expected complaints about doable fraud.

Ramapo, its local enhancement corporation, and four town officials were charged with fraud earlier this year and accused of hiding a fading fiscal circumstances from public bond investors.

“When audit reports are used to sell public bonds, investors expect those reports to be right,” said Andrew M. Calamari, Boss of the SEC’s New York Regional Office.  “Consolo failed to implementation certified disbelief and PKF O’Connor Davies issued fake unchanged audit reports, and they left investors without an right picture of the town’s finances and its ability to repay bondholders.”

Consolo and PKF O’Connor Davies consented to the SEC’s order without admitting or denying the findings.  The firm agreed to forfeit approximately $380,000 in audit fees and appeal and pay a $100,000 penalty.  O’Connor Davies also must engage an self-determining consultant.  Consolo agreed to pay a $75,000 penalty and be floating from involved public company accounting.  He’s also prohibited from acting as the date partner or date quality control assessor on any public audit for five years.

The SEC’s order finds that Consolo debased Section 10(b) of the Securities Chat Act of 1934 and Rule 10b-5 as well as Section 17(a) of the Securities Act of 1933, and PKF O’Connor Davies debased Sections 17(a)(2) and 17(a)(3) of the Securities Act. 

The SEC’s long-lasting investigation is being conducted by Daniel M. Loss, Pamela Sawhney, and Celeste A. Chase of the New York office and Creighton L. Papier of the Public Finance Abuse Unit.  Assisting the investigation are Alexander Vasilescu of the New York office and Jonathan Wilcox, Joseph Chimienti, Louis Randazzo and Mark R. Zehner from the Public Finance Abuse Unit.  The case is being supervised by Sanjay Wadhwa of the New York office and LeeAnn Ghazil Gaunt of the Public Finance Abuse Unit.  The SEC appreciates the help of the U.S. Attorney’s Office for the Southern Constituency of New York and the Federal Bureau of Investigation.

SEC.gov Updates: Press Releases – http://www.sec.gov/news/pressrelease/2016-229.html

Banking News – Sun Bancorp’s 3Q Profit Declines, But Expenses Improve
&nbspSun Bancorp’s third-quarter profit declined, as the Mount Laurel, N.J., recorded nearly $3 million of one-time gains a year ago. Sun’s expenses, but, nonstop to improve.
Union Banking – http://www.americanbanker.com/news/union-banking/sun-bancorps-3q-profit-declines-but-expenses-improve-1092188-1.html

Banking News – Private equity takes longer view of lower returns
&nbspNew 14-year funds offer payouts below those the diligence once promised
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/0/918d6562-9983-11e6-8f9b-70e3cabccfae.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct

Banking News – Heartland in Iowa to Buy Founders in California
&nbspHeartland Fiscal in Dubuque, Iowa, has agreed to buy Founders Bancorp in San Luis Obispo, Calif.
Union Banking – http://www.americanbanker.com/news/dealmaking-approach/heartland-in-iowa-to-buy-founders-in-california-1092185-1.html

Banking News – Fund assets fall for first time in five years
&nbspAsset managers have been hurt by challenging investment landscape and redemptions
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/0/24156a86-9f62-11e6-86d5-4e36b35c3550.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct

Banking News – Steven Cohen’s schooling academy turns global
&nbspPoint72 looks to Asia and Europe as it competes with tech firms for recruits
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/0/f080a276-9d2c-11e6-8324-be63473ce146.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct

Banking News – When Does a Bank Need a Lawyer on Staff?
&nbspAs banks grow and their affair models become more complex, some find that adding a general counsel to the staff makes sense. Bank SNB in Stillwater, Okla., says hiring one allowed it to reduce its legal fees by 80%. Here are the pros and cons.
Union Banking – http://www.americanbanker.com/news/union-banking/when-does-a-bank-need-a-lawyer-on-staff-1092133-1.html

Banking News – ANZ to sell Asia wealth and retail units to DBS
&nbspAustralian bank is the latest lender to sell off retail and wealth management units
FT.com – Banks – http://www.ft.com/cms/s/0/718ee592-9f00-11e6-891e-abe238dee8e2.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct

Banking News – China banks in stand-off over loan loss provisions
&nbspLenders use mix of public lobbying and private boldness to push for looser values
FT.com – Banks – http://www.ft.com/cms/s/0/451ee416-9cf9-11e6-8324-be63473ce146.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct

Banking News – RBS small affair allegation not backed by report
&nbspNo firm prove that bank pushed small businesses into insolvency
FT.com – Banks – http://www.ft.com/cms/s/0/1205953a-9eb5-11e6-891e-abe238dee8e2.html?ftcamp=published_links%2Frss%2Fcompanies_banks%2Ffeed%2F%2Fproduct

Banking News – Credit Suisse’s huge bet on Asia
&nbspTidjane Thiam hopes to manage more Asian fortunes – but is he too optimistic?
Fiscal Times – Fiscal Air force – http://www.ft.com/cms/s/0/e619540c-9ba3-11e6-8f9b-70e3cabccfae.html?ftcamp=published_links%2Frss%2Fcompanies_financial-air force%2Ffeed%2F%2Fproduct