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Industry News: DiligenceEvents

 

Tracking Regulatory Actions, Lawsuits, and Fraud

As part of Castle Hall’s ongoing media monitoring, our analyst team captures news stories related to operational failures, regulatory actions and lawsuits impacting the asset management industry. We call these stories "DiligenceEvents". 
 
Across our diligence monitoring platform, Castle Hall leverages the power of Dow Jones Factiva to create a fully institutional media monitoring tool. Factiva ensures DiligenceEvents media information is permanently archived and fully licensed from the content provider with no copyright infringement. Factiva accesses more than 30,000 premium sources, including licensed publications, websites and blogs, supported by Castle Hall's own review of industry publications and media sources.

Please use your Castle Hall Factiva Reader login information to access articles noted below. If you do not have a Factiva Reader license, please contact your Castle Hall client relationship manager who will be able to activate the necessary access.

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2018-05-09

Premium Point Founder, Others Charged with Inflating Assets

Federal prosecutors on Wednesday charged the founder of New York investment firm Premium Point Investments LP and two former members of the firm with inflating the value of assets held by the firm's hedge funds by more than $200 million. In an indictment unsealed in Manhattan federal court, prosecutors charged Premium Point founder Anilesh Ahuja, 49; former partner Amin Majidi, 52; and former trader Jeremy Shor, 46 with securities fraud, wire fraud and conspiracy. The U.S. Securities and Exchange Commission also announced related civil charges...

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2018-05-10

RBS Settles US Department of Justice Investigation with $4.9BN Fine

Royal Bank of Scotland has agreed a $4.9bn (£3.6bn) penalty with the US Department of Justice to end an investigation into sales of financial products in the run-up to the financial crisis, clearing the way for the UK government to sell its 71% stake in the bank. The RBS chief executive, Ross McEwan, said the agreement in principle was a milestone moment for the bank. The penalty relates to the sale of financial products linked to risky mortgages in the US between 2005 and 2007...

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2018-05-10

Abraaj Allegations Shake Up Middle Eastern Deal Making

Allegations that one of the biggest and oldest private equity firms in the Middle East misused client money, including from the Bill & Melinda Gates Foundation and the World Bank, have sent shock waves through the ranks of local dealmakers, according to Bloomberg. Dubai's Abraaj Group, has shaken up its top ranks, cut dozens of jobs and hired outside help to probe the matter and patch up relations with clients, but the fallout may just start to ripple through. Bloomberg reported that since the allegations surfaced in February, private equity deals and fundraising in the region, which had already been slowing, have come to a halt, according to interviews with about a dozen financial industry executives...

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2018-05-10

Stockbroker Stole $400K; Toms River Man Guilty of 5 Crimes

A Passaic jury found a Toms River stockbroker guilty of stealing more than $400,000 from investors and using it for personal day trading and his own expenses, Attorney General Gurbir S. Grewal announced. Jeffrey D. Griffin Jr., 43, was found guilty of five crimes — theft by deception, misapplication of entrusted property, money laundering and two counts of violating the state's Uniform Securities Act, according to a news release from the attorney general. The verdict, rendered late Tuesday, followed a trial before Superior Court Judge Joseph Portelli. At the trial, Anthony Torntore and Alyssa Bloom, deputy attorneys general, presented evidence that, from August 2010 through July 2011, Griffin stole $408,000 from four investors — three men and a woman...

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2018-05-10

Gores' Firm Tied to Alleged Inmate Scheme; Company Operates Private Phone Systems in Prisons

One of the companies owned by Pistons owner Tom Gores' private equity firm is one of two defendants in a lawsuit filed in a Massachusetts court last week. According to a lawsuit filed May 2 by consumer and prisoner rights groups, Gores' company is tied to an illegal kickback scheme that nearly doubles the cost of jail phone calls made by inmates in Massachusetts. The alleged scheme involves the Bristol County Sheriff's Office in Massachusetts and Securus Technologies — a company owned by Gores' Platinum Equity firm that operates private telephone systems in many jails across the country, including Michigan...

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2018-05-10

Malaysia's Najib Goes Quietly, Sunk by Scandal

In the end, Najib Razak gave up without a fuss, the first prime minister of Malaysia ever to lose a general election. After a bruising campaign in which he traded barbs and insults with his former mentor, Mahathir Mohamad, Najib's Barisan Nasional coalition was trounced in Wednesday's poll... News broke in 2015 that about $700 million allegedly stolen from 1MDB had made its way into his personal bank accounts. He has denied any wrongdoing and has been cleared by Malaysia's attorney-general even as U.S. authorities allege that over $4.5 billion was stolen from the fund in a fraud orchestrated by a financier known to be close to Najib and his family...

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2018-05-09

SEC Correctly Found No Jurisdiction Over Market Makers' Improper Fee Petition

A Seventh Circuit panel has affirmed the SEC's dismissal of a petition seeking damages from various securities exchanges for improper fees for lack of jurisdiction. The court deferred to the Commission's conclusion that the Exchange Act does not provide jurisdiction over lawsuits initiated by private parties. In addition, the petition sought only an accounting, and a refund, of improper fees, which are not cognizable claims under the relevant provisions (CBOE v. SEC, May 7, 2018, Flaum, J.)...

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2018-05-09

CME Says It's About to Win 14-Year-Old Eurex Antitrust Suit

CME Group Inc. says it’s poised to win a 14-year-old court case that alleges its anti-competitive behavior blocked a huge German exchange from getting a foothold in the U.S. The judge, CME disclosed in its latest quarterly report, told litigants on April 27 that he “reached a preliminary decision” granting CME’s motion for summary judgment of the antitrust claim. The court “is expected to issue a written decision finalizing that decision and dismissing the entire case,” CME said. Court records show U.S. District Judge Thomas Durkin decided the trial will no longer begin on June 4... [Full article available to Crain subscribers]

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2018-05-09

Wealth Manager Loses $1.2 Million Insider-Trading Bail Fight

A Swiss wealth manager embroiled in an insider-trading case linked to Air Liquide SA's $13.2 billion takeover of Airgas Inc. has lost his bid to avoid posting bail of $1.2 million. A ruling from France's top court revealed that a man identified as Thierry Z., working for wealth-management firm Stokors SA, was charged by criminal authorities late last year "for enabling the acquisition of shares by a third party on the basis of insider information." The charges relate to a transaction that generated a $5.2 million profit for his client, Mr. A., according to the previously unreported April 10 ruling at Paris's Cour de Cassation that was posted online last week...

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2018-05-08

FINRA Sanctions Fifth Third Securities, Inc., $6 Million for Cost and Fee Disclosure Failures and Unsuitable Recommendations Related to Variable Annuity Exchanges

The Financial Industry Regulatory Authority (FINRA) announced today it has fined Fifth Third Securities, Inc., $4 million and required the firm to pay approximately $2 million in restitution to customers for failing to appropriately consider and accurately describe the costs and benefits of variable annuity (VA) exchanges, and for recommending exchanges without a reasonable basis to believe the exchanges were suitable. This is the second significant FINRA enforcement action against Fifth Third involving the firm's sale of variable annuities...

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