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Did Someone Forget to Tell the Board of Swift Transportation That Insider Trading Is Illegal?
Each time a story like this comes out — and they seem to appear with alarming regularity — it causes me to wonder whether corporate executives and board members pay any attention to the discussions about how insider trading in the company’s stock is illegal. The SEC filed an insider trading suit against Swift Transportation…
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GlaxoSmithKline Settles Medicare Fraud Claims for $150 Million While Serono Gets Ready to Pony Up $700 Million
The Department of Justice announced a settlement of a civil false claims act suit against GlaxoSmithKline PLC for inflating the price of two of its drugs that counter nausea for cancer patients undergoing chemotherapy and radiation treatments. The company agreed to pay a $150 million civil penalty, according to a DOJ press release (here), for…
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Two Charged with Secretly Filming Michael Jackson
When Michael Jackson flew from Las Vegas to Santa Barbara in 2003 to face the child molestation charges on which he was later acquitted, little did he know that the owner of the chartered private jet outfitted the passenger cabin with a secret camera and microphone he had purchased from a "spy" store. Now, the…
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Former Gemstar-TV Guide CEO Pleads Guilty to Obstructing SEC Investigation
The U.S. Attorney’s Office for the Central District of California announced that Henry Yuen, the former CEO of Gemstar-TV Guide International Inc., agreed to plead guilty to obstructing an SEC investigation into accounting fraud at the company by destroying e-mails and other electronic files. According to a press release (here): According to the Information being…
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Can Anyone Make Sense Out of White Collar Sentencing?
The 8-25 year sentences handed out to former Tyco officers Dennis Kozlowski and Mark Swartz provoked some commentary that the punishment was too harsh, given that these were first time offenders who pose little threat to society, at least from the standpoint of being violent or engaging in clearly illegal conduct like drug dealing. On…
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WorldCom Securities Class Action Settlement Approved; Ebbers Prepares His Appeal
U.S. District Judge Denise Cote approved the settlement of the WorldCom securities fraud class action suit that involves a total of $6.1 billion. The largest payments came from Citigroup ($2.575 billion) and JP Morgan Chase ($2 billion), while former CEO Bernie Ebbers turned over virtually all his remaining assets to settle the case. WorldCom’s former…
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Congressional Investigators Broaden The Investigation of Palmeiro’s Steroid Use
The congressional investigation into whether (former?) Baltimore Orioles player Rafael Palmeiro committed perjury this past March when he denied ever using steroids — only to be caught using them by baseball’s new testing program a few months later — has expanded to include interviews with current major league players who may have information about Palmeiro’s…
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40 Years for Investment Fraud
Speaking of severe sentences, an AP story (here) discusses the sentencing of James Gibson in East St. Louis, IL, to a forty-year term of imprisonment and $83 million in restitution for defrauding 183 victims. Gibson was convicted of fraud and money laundering for taking money from people who received settlements in personal injury and med-mal…
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From A Reader – An Inside View of the Kozlowski and Swartz Sentencing
A reader of the blog, who was "not involved in the Kozlowski or Swartz case, but [ ] attend[ed] most of their first (mistrial)," described the sentencing as follows: "Kozlowski was there with, among others, his wife and two daughters.Swartz’s wife was there, but his children were not (they are younger andthis would have…
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Radler Takes Plea
Not surprising, former Chicago Sun-Times publisher David Radler has decided to take a plea and it looks like he has secured a "deal" from prosecutors in return for his cooperation. (Chicago Tribune (AP) reports here.) The Wall Street Jrl here notes that in return for a plea of guilty to a mail fraud charge, Radler…
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