Posted by Aliyah Ponton.
A former executive, Andrew Caspersen, at a New York investment bank admitted swindling investors of more than $38 Million. As a result, he was sentenced to four years in prison. During court he told the U.S. District Judge, Jed Rakoff, “I chose gambling over everything.” The Judge cited his gambling as a reason for leniency. Andrew Caspersen is 40 years old and is a graduate of Princeton University and Harvard Law School. He also defrauded his job, PJT Partners Inc., of over $8 Million.
Caspersen is the son of the late Finn M.W. Caspersen, who was a philanthropist and former chief executive of Beneficial Corp. “I destroyed my family’s name,” said Caspersen. In the court room it was packed with family and friends as well as members of organization he has joined. Many of his friends and families argued for leniency to the judge. Rakoff imposed Caspersen’s prison term by giving him way less then the 15 years that was entitled for by the sentencing guidelines and also less than the 7 ½ years recommended by the Probation Department.
Caspersen stole from his friends, family, and from investors. He took advantage of his Wall Street pedigree and even stole from charities. “Using his Wall Street pedigree, Andrew Caspersen deceived and defrauded investors – including his own family and friends and a charity – out of tens of millions of dollars,” said the U.S. Attorney Preet Bharara. When faced by the judge Caspersen said that he was dedicated to continuing treatment for his gambling addiction but Assistant U.S. Attorney Christine Magdu said Caspersen failed to follow through with his gambling addiction treatment. She also added that Caspersen quit therapy after only seven sessions. In the end, after going to court and fighting for leniency, Caspersen was sentenced to 4 years in prison.
Aliyah is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2019.
Source:
http://news.findlaw.com/apnews/feb61e4e2ac8475b9110b70ba45e9928
http://abcnews.go.com/US/wireStory/executive-ny-bank-years-prison-38m-fraud-43313982
Posted by Gabriella Campen.
Unfortunately, in this day and age being well-known in Wall Street circles also happens to be synonymous with being well known by the SEC. The SEC has recently charged hedge fund manager Leon Cooperman, 73, of insider trading by using his easy access to executives to gather information, which he used to buy securities from a company called Atlas Pipeline Partners. Cooperman’s information led him to buy more securities in the firm, right before the stock’s value soared over 30% due to the company’s $682 million dollar sale of a natural gas processing facility.
After the suspicious buy, the SEC filed a federal lawsuit in Philadelphia, and accused Cooperman of abusing his access to executive information, “By doing so, he allegedly undermined the public confidence in the securities markets and took advantage of other investors who did not have this information,” said SEC Enforcement director Andrew Ceresney. Along with barring Cooperman from any positions as a director or officer in the future, the SEC is seeking restitution of profits as well as money penalties from Cooperman and his firm, Omega Advisors.
However, Cooperman’s attorneys, Ted Wells and Dan Kramer have released a statement claiming that these allegations are “entirely baseless” and that “Mr. Cooperman acted appropriately at all times and did nothing wrong. We intend to vigorously defend against the charges and will not allow the SEC to tarnish the legacy Mr. Cooperman has built over the course of a legendary career spanning five decades.” Cooperman is firing back and defending his career and reputation, to which the SEC is saying that they “will continue to pursue relentlessly those who engage in insider trading, regardless of their status or resources.” This comes as a lesson that no matter who you are or how much power you have on Wall Street, you are still not exempt from following the law.
Gabriella is a marketing and finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Carter McIntosh.
Valeant is a very large pharmaceutical company that focused on creating a “drug giant that was focused on distribution.” Valeant “was” one of the hottest stocks on Wall Street; this stock was booming; the stock soared all the way to $260 in just months. Wall Street analysts and Hedge Funds loved Valeant and everyone wanted to own it. Valeant has been in the news lately, and it is not good news but rather some very bad news. Allegations now follow Valeant and whether or not they have true success or that there true success can be attributed to “price gouging: a secret network of specialty pharmacies; and fraud.” With these allegations surfacing, Valeant stock has “plummeted 60% in the last three months.”
Valeant has been under scrutiny for a while now, dating all the way back to August 14th, 2015. In August, Valeant was being scrutinized because they raised the price of their drugs. On October 5th, 2015, a study by a Deutsche Bank analyst finds that it is not just two drugs that they raised the prices. The report concludes that Valeant has jacked up prices on 54 other meds this year alone, by an average of 66%.” In response to this issue, Valeant CEO Pearson said during an earnings call on October 19th, 2015, that “Valeant will ease up on its strategy of buying up drugs that are mispriced and hiking the prices.”
On October 20th, 2015 “A report by Citron Research, run by activist short seller Andrew Left reveals more information about Philidor and it’s network of phantom captive pharmacies.” Left accused Valeant of committing accounting fraud; furthermore, Left compared “Valeant to companies like Enron.” Two days later on October 22nd, 2015, Valeant “called Left’s reports erroneous. The company says it hasn’t used Philidor to book false sales. It says Philidor is a separate company, but that Philidor’s financial statements are included in Valeant’s financial statements.” With this allegation surfacing Valeant shares have plummeted 30% in just three days.
As more and more information surfaced about Valeant’s relationship with Philidor, on October 30th, 2015, “Valeant says it is cutting ties to Philidor, and that the pharmacy will shut down immediately. Allegations have emerged that Philidor may have changed prescriptions to push Valeant’s high-priced drugs on patients, rather than the generics.” Bill Ackman, the largest shareholder in Valeant held a “four – hour conference call to defend Valeant,” as he believes in Valeant’s business strategy and that the company would not commit accounting fraud and price gouging. Unfortunately, this course of action did not help Valiant. In fact, after the Bill Ackman conference call, Valeant shares fell another 10%.
Carter is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Samar Baeshen.
According to an October 21, 2015 news article in The New York Times, “Criminals Should Get Same Leniency as Corporations,” there are many critics arguing that corporations trying to make a big effort to defend their misconducted executives ought to be treated like common criminals. In addition, Emmet G. Sullivan, a federal judge, thought that criminals should be treated like big companies. Due to Obama administration’s method which gives companies the opportunity to not have a criminal record, Judge Sullivan believes that individual criminals should enjoy the same chances. In fact, the Department of Justice officials concur with Judge Sullivan’s opinion, which criticizes the American criminal justice system, and encourage Congress to lower the adjudication standards. Meanwhile, the Justice Department issued a new memo recently and released new approaches to prosecute individual employees after years of accusations about Wall Street criminals.
According to Judge Sullivan, the court is frustrated that the postponed prosecution agreements are not being utilized to give the same chances to individual criminals without causing any negative effects on the criminal conviction. Moreover, there are lack of the postponed prosecution agreements, according to the Justice Department, for both corporations and individuals. However, comparing the number of cases against individuals and companies, cases against individual criminals are enormously more than companies.
In general, the target of the Judge Sullivan’s argument is to reduce the long Sentence for prisoners who did not commit violent crimes.
Samar is a graduate student in accounting at the Feliciano School of Business, Montclair State University.
The Federal Reserve Bank of New York has come under fire recently with the release of secret tapes supposedly of regulators planning to “go soft” on Goldman Sachs. Carmen Segarra, a former employee who was assigned to Goldman, claims in a lawsuit that she was under pressure by her superiors to overlook certain findings she made concerning the company. The Fed eventually fired her allegedly because she refused to comply and change the findings.
In the recordings, one supervisor tells Segarra that basically consumer laws do not apply to certain institutions. Michael Lewis, best-selling author of “Flash Boys: A Wall Street Revolt,” said after listening to the tapes that, “The Ray Rice video for the financial sector has arrived.”
Segarra’s lawsuit was dismissed for failing to connect her firing with the alleged Goldman disclosures. The suit is pending appeal. Nevertheless, the tapes may prompt a Congressional investigation into the matter. Sen. Elizabeth Warren (D-Mass.), a member of the Senate Banking Committee, stated, “When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy.” She further stated, “Congress must hold oversight hearings on the disturbing issues raised by today’s whistleblower report when it returns in November.”
Posted by Giancarlo Barrera.
Goldman Sachs was infamously named “The Wolf of Wall Street.” Goldman created, convinced, and sold mortgage investments that had been designed to fail in the first place.corruption at its finest. It was corruption at its finest. Goldman even went as far as betting against the same derivatives it was promoting and selling to their own clientele. Goldman accepted that it misled investors the wrong way, but did not admit to any scheming or wrongdoing.
In July 2010, Goldman paid an enormous SEC fine of 550 milion dollars. It was one fine after another. Then in April 2012, Goldman paid a fine of 22 million dollars for allowing insider trading of non-public information to Goldman’s clients and traders since 2007. On the link, the story goes into further detail of how much fraud and dishonesty was played under the table and behind the backs of its own clients, who the company was supposed to help invest their money in the first place.
Business is business.
Giancarlo is an economics and finance major at Montclair State University, Class of 2016.