March 21, 2018
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Credit Suisse exec charged in NY mortgage fraud probe

From wire reports

NEW YORK — A Credit Suisse executive who was once slated to receive more than $7 million in compensation in 2007 is among three of the company’s former employees to be criminally charged.

Kareem Serageldin was charged Wednesday with conspiracy, falsifying books and records, and wire fraud. The charges carry a potential penalty of 45 years in prison. Authorities say $5.2 million of his pay was taken away after Credit Suisse discovered the fraud.

Two other Credit Suisse traders pleaded guilty to conspiracy charges in cooperation deals with prosecutors. Serageldin wasn’t in custody. He’s a U.S. citizen who lives in England.

The men were accused of artificially boosting the price of bonds linked to mortgages to boost bonuses and cover up that the U.S. housing market was collapsing.

Consumer bureau chief’s appointment invalid, GOP says

WASHINGTON — Republican senators warned the director of the Consumer Financial Protection Bureau that they believed his recess appointment was invalid and that new agency rules would be challenged in court, leaving businesses uncertain about what rules to follow.

Republicans were so upset with President Barack Obama’s appointment of Richard Cordray last month that one boycotted the director’s Senate Banking Committee appearance Tuesday and another promised never to work with the president on pending nominations that need the Senate’s approval.

The GOP had been blocking confirmation votes on any nominee to direct the agency until its powers were limited and had prevented the Senate from formally going into recess for more than three days to try to prevent a recess appointment.

Democrats defended Obama’s decision to break with tradition and appoint Cordray during a short Senate recess after Senate Republicans had blocked a vote on him in December.

MF Global’s missing cash mostly accounted for

WASHINGTON — Most of the $1.2 billion reported missing from the failed brokerage MF Global has been traced to customer accounts and banks, people briefed on the matter told The Associated Press on Wednesday.

Brokerages are supposed to keep customer money separate from company money. That way, customers are protected if the brokerage fails.

But three people briefed on the investigations into MF Global’s collapse said MF Global misused client money to repay other customers, business partners and banks who demanded cash as the firm teetered.

The people spoke on condition of anonymity because they were not authorized to discuss the investigations publicly.

They said details about where the money went are being kept under wraps because the publicity could hinder future prosecutions and efforts to return money to MF Global customers.

MF Global’s demise, the eighth-biggest U.S. corporate bankruptcy, is the subject of investigations by the Commodity Futures Trading Commission, the firm’s main regulator, and trustees trying to return money to MF Global customers and lenders, among others.

The status of the missing money was first reported late Tuesday by The New York Times.

AG: $8.8B in False Claims recoveries in 3 years

WASHINGTON — Attorney General Eric Holder says improvements in the Civil War-era False Claims Act designed to combat fraud against the government have led to recoveries for taxpayers of $8.8 billion in the past three years — and $30 billion since the amendments were adopted a quarter of a century ago.

The law was strengthened in 1986 to provide treble damage awards to the government. The changes protect whistle-blowers with inside knowledge of fraud and provide them with an incentive to sue— part of any money recovered.

In a 25th anniversary celebration at the Justice Department, Holder said whistle-blowers have filed nearly 8,000 actions — including a record 638 in the past year alone.

Holder praised Vermont Sen. Patrick Leahy and California Rep. Howard Berman for helping pass the 1986 revisions.

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