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Apr 27, 2015

Ex-controller of Connecticut hedge fund gets 4 years prison

By Jonathan Stempel

(Reuters) – A former controller of Contrarian Capital
Management LLC has been sentenced to four years in prison after
he embezzled $9.2 million from the Greenwich, Connecticut hedge
fund, federal prosecutors said on Monday.

Lawrence Herzing, 45, of Greenwich, was sentenced on Friday
by U.S. District Judge Jeffrey Alker Meyer in Bridgeport,

Apr 24, 2015

Barclays must face U.S. fraud lawsuit tied to ‘dark pool’ probe

NEW YORK (Reuters) – Barclays Plc failed to persuade a U.S. judge to dismiss a lawsuit accusing the British bank of defrauding shareholders about a private “dark pool” trading platform even as it was publicly pledging to clean up its corporate culture.

U.S. District Judge Shira Scheindlin in Manhattan on Friday allowed most of the lawsuit brought on behalf of investors in Barclays’ American depositary shares to go forward.

Apr 24, 2015

New York’s MTA may ban political ads after ‘Killing Jews’ ruling

NEW YORK, April 24 (Reuters) – Stung by a court ruling
ordering it to display a controversial ad from an anti-Muslim
group on its buses, New York’s Metropolitan Transportation
Authority may adopt a new policy that it said would let it ban
the ad after all.

According to a letter submitted on Friday to U.S. District
Judge John Koeltl in Manhattan, the authority’s board plans on
April 29 to vote on a new policy allowing it to exclude “all
advertisements of a political nature” from MTA property.

Apr 23, 2015

AIG in $40 million accord over crisis-era retirement plan losses

NEW YORK (Reuters) – American International Group Inc has reached a $40 million settlement of claims it should not have let employees invest their retirement savings in company stock as the insurer headed into the 2008 financial crisis, which nearly caused its collapse.

The preliminary settlement was filed on Thursday in Manhattan federal court, which must approve the accord.

Apr 23, 2015

RBC fined in U.S. over sale of reverse convertibles

April 23 (Reuters) – A U.S. regulator ordered a Royal Bank
of Canada unit to pay $1.43 million to resolve charges
it sold high-yielding securities known as reverse convertibles
without properly assessing whether they were suitable for
investors who bought them.

Thursday’s settlement with RBC Capital Markets LLC calls for
the payment of a $1 million fine and $434,000 of restitution.
RBC neither admitted nor denied wrongdoing in agreeing to settle
charges by the Financial Industry Regulatory Authority.

Apr 23, 2015

Yelp wins dismissal of lawsuit over quality of its reviews

By Jonathan Stempel

(Reuters) – Yelp Inc has won the dismissal of a lawsuit that claimed it deceived shareholders by overstating the authenticity and quality of consumer reviews on its website, and thereby enabled insiders to sell company stock at inflated prices.

In a decision made public on Wednesday, U.S. District Judge Jon Tigar in San Francisco said reasonable investors would know that not all reviews posted on Yelp were “firsthand,” this being a “common-sense understanding of what it means for a website to host user-generated content.”

Apr 22, 2015

BofA questions judge’s impartiality as it appeals big fraud verdict

NEW YORK (Reuters) – Bank of America Corp on
Wednesday asked a federal appeals court to toss a $1.27 billion
penalty imposed in a mortgage fraud case, and in a rare move
asked that the prominent Manhattan judge who oversaw its trial
be replaced if the case were to continue.

In a filing with the 2nd U.S. Circuit Court of Appeals, the
second-largest U.S. bank faulted U.S. District Judge Jed Rakoff
for several public comments he made about the mortgage crisis,
including the need to pursue bank executives more aggressively,
while the case was pending.

Apr 22, 2015

Goldman-linked firm settles SEC charges over going ‘dark’

April 22 (Reuters) – A company affiliated with Goldman Sachs
Group Inc agreed to pay $640,000 to settle U.S.
Securities and Exchange Commission charges that it failed to
resume making public disclosures to investors after going “dark”
for six years.

Wednesday’s settlement resolves charges against W2007 Grace
Acquisition I Inc, a real estate firm created out of Equity Inns
Inc, a hotel chain that Goldman’s Whitehall private equity funds
bought in 2007 for about $2.2 billion, including assumed debt.

Apr 22, 2015

Citigroup must face South Korean bank’s lawsuit over failed CDO

NEW YORK (Reuters) – A U.S. appeals court on Wednesday revived a lawsuit in which South Korea’s Woori Bank accused Citigroup Inc of defrauding it into buying risky mortgage securities that Citigroup was betting against, prior to the financial crisis.

The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge erred in finding that Woori waited too long to sue over its $25 million investment in 2007 in Armitage ABS CDO Ltd, a collateralized debt obligation that Citigroup sold.

Apr 22, 2015

Exxon Mobil to pay $5.07 million for 2013 Arkansas oil spill

By Jonathan Stempel

(Reuters) – Exxon Mobil Corp has agreed to pay $5.07 million to resolve allegations it violated the federal Clean Water Act and state environmental laws in connection with a 2013 oil spill in Arkansas, the U.S. Department of Justice and Environmental Protection Agency said on Wednesday.

The March 29, 2013 spill occurred after the rupture of Exxon’s Pegasus pipeline, causing about 3,190 barrels, or 134,000 gallons, of oil to flow through a residential neighborhood in Mayflower, Arkansas and nearby waterways including Lake Conway, which flows into the Arkansas River.

    • About Jonathan

      "I cover legal and regulatory matters, and am based in New York. I have covered banking, finance, Warren Buffett and corporate bonds."
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