May 24, 2018
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NYC judge rejects $285M SEC-Citigroup agreement

By From wire service reports

NEW YORK — A federal judge on Monday struck down a $285 million settlement that Citigroup reached with the Securities and Exchange Commission, saying he couldn’t tell whether the deal was fair and criticizing regulators for shielding the public from the details of what the firm did wrong.

U.S. District Judge Jed Rakoff said the public has a right to know what happens in cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives.” In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

Rakoff said he had spent hours trying to assess the settlement but concluded that he had not been given “any proven or admitted facts upon which to exercise even a modest degree of independent judgment.” He called the settlement “neither fair, nor reasonable, nor adequate, nor in the public interest.”

The SEC had accused the bank of betting against a complex mortgage investment in 2007 — making $160 million in the process — while investors lost millions. The settlement would have imposed penalties on Citigroup even as it allowed the company to deny allegations that it misled investors.

Feds seize 150 websites in counterfeit crackdown

WASHINGTON — Federal authorities have shut down 150 websites accused of selling knock-off or pirated merchandise to unsuspecting online bargain hunters.

Immigration and Customs Enforcement Director John Morton and Assistant Attorney General Lanny A. Breuer announced the results of the ICE and FBI three-month investigation on “Cyber Monday,” the day that for many shoppers kicks off the online holiday shopping season.

The government seized the domain names for the sites that sold everything from fake replica NBA jerseys to replica Louis Vuitton handbags and imitation Ugg boots.

“This is straight crime,” Morton said. “This is people being duped into buying a counterfeit.”

The federal government has seized the domain names of 350 websites since first targeting online counterfeiters in June 2010. Each investigation, Morton said, has grown.

Visitors to the seized domains are now greeted with a message from federal authorities explaining that the site has been seized by the government and a warning that “willful copyright infringement is a federal crime.”

Conn. man pleads guilty to securities fraud in NYC

NEW YORK — A Connecticut man has pleaded guilty to securities fraud charges in New York City, admitting his role in trades that reaped more than $1 million in illegal profits.

John Bennett entered the plea Monday in federal court in Manhattan. The film producer and former investment professional pleaded guilty to conspiracy and securities fraud charges. The 48-year-old Norwalk, Conn., man faces up to 45 years in prison when he is sentenced on April 23.

Authorities say Bennett conspired with a longtime friend in a scheme aimed at making more than $2.6 million in illegal profits by trading on pharmaceutical stocks. His friend had worked at a global human resources consulting firm.

Agency OK likely for rule on firms’ customer funds

WASHINGTON — Federal regulators are likely to approve a rule next week restricting how firms trading in futures can invest customer funds, an issue related to the collapse of brokerage firm MF Global.

The Commodity Futures Trading Commission says its five members will vote on making the rule final at a public meeting next Monday.

The rule was first proposed by the agency late last year. But last summer, a meeting to vote on it was cancelled. Jon Corzine, the former New Jersey governor and U.S. senator who headed MF Global until earlier this month, lobbied the CFTC against the rule.

MF Global filed for bankruptcy protection on Oct. 31. The CFTC and other regulators are investigating whether MF Global tapped money from clients’ accounts as its financial condition worsened.

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