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From: scion4/19/2012 2:01:38 PM
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SEC probes insider trading at Apollo Group


April 19 (Reuters) - For-profit education provider Apollo Group Inc said the U.S. securities regulator was probing certain share sales by company insiders.

The Securities and Exchange Commission contacted Apollo seeking information about the stock sales and a regulatory filing on Feb. 28 that disclosed the company's second-quarter outlook, Apollo said in a regulatory filing on Thursday.

On Feb. 28, Apollo said it expected to sign up fewer new students in the second quarter, sending its shares down as much as 16 percent.

Apollo did not reveal the name of the insiders involved.

BMO Capital Markets analyst Jeff Silber said while the SEC probe adds another element of risk to the stock, the company has relatively robust insider trading controls given the heightened scrutiny under which it operates.

For-profit colleges, including Apollo's University of Phoenix, have faced scrutiny from the U.S. government over the last two years after findings of high student debt load, low graduation rates and fraudulent activities.

Apollo said it intends to fully and voluntarily cooperate with the SEC's preliminary investigation.

The company's shares, which have fallen about 35 percent since the outlook warning in February, were down 2 percent at $35.20 on Thursday on the Nasdaq.

(Reporting by A. Ananthalakshmi)

Follow us on Twitter: @ReutersLegal

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From: scion4/19/2012 2:12:23 PM
   of 121792
Litigation-funding firms were $15 mln fraud: U.S.


NEW YORK, April 18 (Reuters) - Three men were charged Wednesday with bilking $15 million from hundreds of individuals who thought they were investing in lawsuit settlements, federal prosecutors said.

Peter Liounis, Ruslan Rapoport and Roman Tsimerman collaborated on three different fraudulent investment schemes between December 2008 and April 2012, according to a complaint filed in Brooklyn federal court.

Liounis, charged with wire fraud, is in custody. His lawyer declined to comment. Tsimerman, charged with money laundering, also is in custody, and "as far as I can see, is not guilty," said his lawyer. Rapoport, charged with conspiracy to commit wire fraud and money laundering, is not yet in custody, according to a spokesman for the U.S. Attorney's office.

All three are scheduled to appear in Brooklyn federal court Wednesday afternoon.

Between December 2008 and November 2009, the defendants ran a company called the Rockford Group, which marketed itself as a "leading private equity firm" that would invest money in personal-injury and other litigation, prosecutors said. Investors were promised 15 percent of any money the plaintiffs recovered from the suits, said prosecutors.

But the Rockford Group never invested in any litigation and instead wired investors' money to overseas bank accounts, prosecutors said. As a result, roughly 200 U.S. and Canadian investors lost approximately $11 million, according to the complaint.

In September 2010, an individual who was solicited by the Rockford Group received another phone call from someone who sounded similar to his contact at the Rockford Group, the complaint said. The person making the calls said he was "Andrew Black from UBS," the complaint said, and was soliciting investments in an initial public offering of General Motors stock.

Federal agents contacted UBS and determined there was no Andrew Black. The scheme was halted and funds were returned, prosecutors said. Liounis was later identified as "Andrew Black," the complaint said.

In March 2011, the defendants embarked on a third scheme, soliciting investments once again in litigation funding, the complaint said. This time they identified the company as Grayson Hewitt, according to the complaint.

Instead of using the money as purported, the defendants spent the funds purchasing gold, meals, clothing and other items, the complaint said.

In one phone call prosecutors said was caught on a court-ordered wiretap, a Grayson Hewitt investors expressed concern that the company was just "a Bernie Madoff deal," referring to the infamous Ponzi schemer.

"You gotta understand, the amount of money we handle here, uh, we'd go away for a hell of a lot longer than Bernie did," Liounis told the investor, according to the complaint.

The Grayson Hewitt scheme cost investors approximately $5 million, the complaint stated.

Liounis and Rapoport face up to 20 years in prison. Tsimerman faces a maximum sentence of 10 years.

The case is U.S. v. Liounis et al., in the U.S. District Court for the Eastern District of New York, no. 12-379. For Liounis: Kelley Sharkey. For Tsimerman: Sal Strazullo For Rapoport: Not immediately available.

(Reporting by Jessica Dye)

Follow us on Twitter: @ReutersLegal

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To: Bear Down who wrote (114638)4/19/2012 2:41:54 PM
From: StockDung
   of 121792
10 ticker spams seems to be the SEC limit. lol

2) Investment Opinion News Releases are often distributed during the course of an Equititrend I.R. campaign. These Investment Opinion, or I.O. Releases, involve your company's name, ticker and basic story/current headlines being disseminated via one of the three major news Wire Services, "attached" to up to ten (10) unrelated stock ticker symbols on NASDAQ and the OTC BB, such as the most active, or biggest gainers, of any given market day. This process ensures that your company will receive tremendous, additional exposure of its ticker and basic story, as these I.O. Releases will show up under the "News Items" for stocks that have much larger shareholder bases-tens even hundreds of thousands of Investors at times-depending on the ticker symbol chosen. These Investment Opinion News Releases are completely fair game, and many investors (per a poll we conducted in June 2005) strongly feel that they are "much less intrusive" than email spamming, and are "much more likely" to influence a new stock purchase than an unsolicited email.

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To: scion who wrote (114641)4/19/2012 8:58:18 PM
From: $$$Stox_Trader$$$
   of 121792
Hi Scion. This is all very interesting stuff you are posting here! Have a great day friend! (-:

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From: scion4/20/2012 8:25:48 AM
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Battle Over a Chinese Company Turns Physical

New York Times
April 19, 2012, 7:57 pm

It may be a tiny Chinese educational company worth a little over $200 million. But the ChinaCast Education Corporation has found itself embroiled in a battle worthy of a John Grisham novel.

Its ousted chief executive, Ron Chan, has been accused of aiding in the disappearance of ChinaCast’s chops — ornate corporate seals that are needed to approve everything from paychecks to contracts.

And this week, more than a dozen men claiming an association with Mr. Chan burst into the company’s Shanghai office twice, violently carting off several computers from the finance department, according to a United States regulatory filing late on Thursday.

“We remain in disbelief at the actions of former C.E.O. Ron Chan and his associate John X.Y. Jiang,” ChinaCast’s interim chief executive, Derek Feng, said in a statement on Thursday. Mr. Chan’s actions, he said, “are a threat not only to ChinaCast’s shareholders and employees, but also to every honest China-based company that wants to retain access to the foreign capital markets.”

Mr. Chan has denied the allegations, and in a telephone interview accused his former company’s board of ousting him in an effort to seize control.

The convoluted fight follows other recent messy cases involving Chinese companies that have flocked to American stock markets. In a number of instances — that of the Sino-Forest Corporation, most prominently — investors hoping to tap into China’s entrepreneurial growth have instead been forced to confront problems from unpredictable management to accusations of outright fraud.

Some companies have since restated earnings, stopped trading or simply closed up shop.

“What you have here are Western systems of corporate governance that don’t work with strong-willed Chinese C.E.O.’s,” said Paul Gillis, a professor at the Guanghua School of Management at Peking University.

Of the ChinaCast fight, he added, “This one’s uglier than most.”

ChinaCast’s battles with its former chief have raged for months. Mr. Chan had waged war with one of its Western directors, accusing him of insider trading and seeking to push him off the board. A bitter proxy fight ensued, including an apparent attempt to lock out representatives from a hastily scheduled midnight vote. In the end, Mr. Chan lost, and ChinaCast’s board was reorganized with a mostly new set of directors.

It is here that this tale becomes even stranger.

The company fired Mr. Chan in late March, accusing him of preventing its auditors at Deloitte from certifying the company’s books.

People briefed on the matter said that ChinaCast’s independent directors are concerned that their inability to file financial statements on time may cost the company its Nasdaq listing. Shares of the company have been halted on Nasdaq since March 30. Among the company’s largest shareholders are two American investors, Fir Tree Partners and Ned L. Sherwood.

The board also fired other executives suspected of being aligned with Mr. Chan shortly afterward, including the chief financial officer and the chief accounting officer.

ChinaCast then sued Mr. Chan in a Shanghai court, seeking the return of several chops. Vestiges of a business system dating back to imperial times, these chops are often intricately designed stamps used in lieu of signatures and are vital to core functions like signing legal documents.

“Chops are secured very carefully,” Professor Gillis said. “If you possess the chop, you have the legal right to contract for the company.”

Mr. Chan in turn issued an unusual letter to shareholders, declaring himself the victim of intimidation by Western investors seeking to wrest the company away from him. He denied holding any company property or interfering with Deloitte’s work.

ChinaCast also suspects Mr. Chan of being involved in Harmony, a rival education service provider located in the same Shanghai office building as his former employer, according to the people briefed on the matter.

The company disclosed in its regulatory filing that it was investigating the unauthorized transfer of ownership in several of its colleges to unknown people.

Then on Monday, as ChinaCast was preparing to pay out wages, several men burst into the Shanghai office, demanding the financial department’s computers. These people forcibly took the equipment and punched at least one of the company’s outside lawyers, according to a letter to employees from Mr. Feng.

On Tuesday, another group of men claiming to have Mr. Chan’s approval ordered an electrical blackout to stop the workday, according to the memo. ChinaCast called in the police to throw the people out.

For his part, Mr. Chan denies the current board’s accusations, arguing that he possesses no company property. He added that he had nothing personally to do with Harmony.

“People want to march into China and take over a company and expect things to go smoothly,” he said in a telephone interview this week. “Everybody is angry with them.”

Mr. Chan added that while he was currently doing nothing except playing golf and taking meetings, the fight was making him a pariah among China’s business community.

“I’m going to go bankrupt if I respond,” he said. “All I want to do is just nothing.”

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To: scion who wrote (114626)4/20/2012 8:31:00 AM
From: scion
   of 121792
U.S. Investigates a Goldman Executive Over Insider Trading


Federal prosecutors in California are investigating whether a Goldman Sachs executive leaked confidential information about two publicly traded companies to Raj Rajaratnam, the convicted hedge fund manager.

The previously undisclosed criminal inquiry emerged during a pretrial hearing on Thursday in the case of Rajat K. Gupta, the former Goldman director. Mr. Gupta is accused of telling Mr. Rajaratnam about secret boardroom discussions at Goldman and Procter & Gamble, where he also served on the board.

The new evidence could help Mr. Gupta’s defense, by suggesting that Mr. Rajaratnam had other possible tipsters inside Goldman Sachs. The Goldman executive under investigation in California was not named.

“The wrong man is on trial,” Gary P. Naftalis, a lawyer for Mr. Gupta, said in a previous hearing. Mr. Naftalis has called the government’s charges baseless.

Two other Goldman executives, David Loeb and Henry King, are already under investigation as part of the government’s insider trading inquiry. Both Mr. Loeb, a salesman, and Mr. King, a technology stock analyst, had close relations with Mr. Rajaratnam and his colleagues at the hedge fund, Galleon Group.

Mr. Rajaratnam and Galleon had deep ties to Goldman. Galleon, which at its peak managed about $7 billion, was one of Goldman’s most important hedge fund clients. The hedge fund also used Goldman as one of its so-called prime brokers, holding much of its assets at the bank. Galleon hired away numerous traders and analysts from the bank.

Michael Duvally, a Goldman spokesman, declined to comment, as did Thom Mrozek, a spokesman for the United States attorney in the Central District of California in Los Angeles.

During Thursday’s hearing, before Judge Jed S. Rakoff at the Federal District Court in Manhattan, the government also revealed details about a new insider-trading claim against Mr. Gupta unveiled earlier this week.

Reed Brodsky, a prosecutor, said that in late 2008 Mr. Gupta, after learning that Procter & Gamble was going to lower its sales forecast, had lunch with Mr. Rajaratnam. Immediately after the lunch, Mr. Rajaratnam ordered his traders to short, or bet against, Procter & Gamble stock, according to Mr. Brodsky.

Mr. Brodsky said that the government learned this week about another communication between Mr. Gupta and Mr. Rajaratnam, and planned to meet with a new witness on Monday. Judge Rakoff reserved judgment on whether he would let the prosecution use this potential new evidence because it was coming at such a late stage. A trial is set for May 21.

The government brought criminal charges against Mr. Gupta in October. A former head of the consulting firm McKinsey & Company, Mr. Gupta, 63, is the most prominent corporate executive ensnared by the government’s sweeping investigation.

Federal prosecutors in Manhattan have brought insider-trading charges against more than 60 people. Mr. Rajaratnam, who was convicted by a jury last May, is serving an 11-year sentence at a federal prison in Massachusetts.

After hearing on Thursday that there was an insider trading investigation coming out of Los Angeles, the wry Judge Rakoff feigned sadness.

“I’m disappointed to learn that there’s a case involving insider trading that isn’t centered in the Southern District of New York,” Judge Rakoff joked. “But so be it.”

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To: StockDung who wrote (114574)4/20/2012 10:39:20 AM
From: scion
   of 121792
Judge narrows Lehman $8.6 billion lawsuit vs JPMorgan


April 19 (Reuters) - A federal judge has narrowed Lehman Brothers Holdings Inc's $8.6 billion lawsuit against JPMorgan Chase & Co, potentially reducing how much creditors of what was once the fourth-largest U.S. investment bank may ultimately recover.

U.S. Bankruptcy Judge James Peck in Manhattan said Lehman may not recover various sums transferred to JPMorgan, once its main "clearing" bank handling third-party dealings, in August and September 2008.

Peck cited "safe harbor" rules designed to protect healthier banks such as JPMorgan in their dealings with weaker banks.

"These are systemically significant transactions between sophisticated financial players at a time of financial distress in the markets -- in other words, the precise setting for which the safe harbors were intended," Peck wrote on Thursday in a 92-page decision.

Peck let stand other Lehman claims, saying safe harbors do not let "systemically important" banks such as JPMorgan, the largest U.S. bank, act in a "commercially unreasonable" manner. He said Lehman may pursue claims involving intentional misconduct or which are not otherwise covered by safe harbors.

Lehman filed for Chapter 11 protection on Sept. 15, 2008, in what was a primary driver of the global financial crisis and remains by far the largest U.S. bankruptcy.

"JPMorgan grabbed assets for itself at a critical time in its banking relationship with Lehman," Peck wrote. "The issues presented are especially difficult ones that one day may help to define what constitutes acceptable conduct by major financial institutions during times of crisis."

Kimberly MacLeod, a Lehman spokeswoman, declined to comment. JPMorgan spokeswoman Jennifer Zuccarelli was not immediately available for comment. Both companies are based in New York.

Lehman accused JPMorgan of taking advantage of inside details it had learned as a clearing bank to extract desperately needed assets in the last few days prior to, and thus hastening, the bankruptcy.

JPMorgan countersued, saying it feared it might never be repaid after lending Lehman's brokerage more than $70 billion around the time of the bankruptcy, and getting stuck with collateral that Lehman's own employees called "toxic waste."

In September 2011, JPMorgan sought to move the Lehman case to federal district court, saying it involved issues that Peck lacks jurisdiction to handle. U.S. District Judge Richard Sullivan in Manhattan has yet to rule on JPMorgan's request.

Lehman emerged from Chapter 11 last month. On April 11, it said it planned to make an initial $22.5 billion distribution to creditors this week.

The case is Lehman Brothers Holdings Inc et al v. JPMorgan Chase Bank NA, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-03266.

(Reporting by Jonathan Stempel)

Follow us on Twitter: @ReutersLegal

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From: scion4/20/2012 10:45:22 AM
   of 121792
SEC Charges Father-and-Son Hedge Fund Managers Who Agree to Pay $4.8 Million to Settle Fraud Case


Washington, D.C., April 20, 2012 – The Securities and Exchange Commission today charged a Boston-based father-son duo of hedge fund managers and their firms with securities fraud for misleading investors about their investment strategy and past performance.

Additional Materials
SEC Order

The SEC’s investigation found that Gabriel and Marco Bitran raised millions of dollars for their hedge funds through GMB Capital Management LLC and GMB Capital Partners LLC by falsely telling investors they had a lengthy track record of success based on actual trades using real money. In truth, the Bitrans knew the track record was based on back-tested hypothetical simulations. The Bitrans also misled investors in certain hedge funds to believe they used quantitative optimal pricing models devised by Gabriel Bitran to invest in exchange-traded funds (ETFs) and other liquid securities. Instead, they merely invested the money almost entirely in other hedge funds. GMB Capital Management later provided false documents to SEC staff examining the firm’s claims in marketing materials of a successful track record.

The Bitrans agreed to be barred from the securities industry and pay a total of $4.8 million to settle the SEC’s charges.

“The Bitrans solicited investors by touting an impressive track record and a unique investment strategy, and they lied about both,” said David P. Bergers, Director of the SEC’s Boston Regional Office.

According to the SEC’s order instituting settled administrative proceedings, Gabriel Bitran founded GMB Capital Management in 2005 for the stated purpose of managing hedge funds using quantitative models he developed based on his academic optimal pricing research to trade primarily ETFs. He and his son Marco Bitran solicited potential investors with three primary selling points:

Very successful performance track records based on actual trades using real money from 1998 to the inception of the hedge funds.

The firm’s use of Gabriel Bitran’s proprietary optimal pricing model to trade ETFs.

Gabriel Bitran’s involvement as founder and portfolio manager of the funds.

The SEC’s order states that over a period of three years, the Bitrans raised more than $500 million for eight hedge funds and various managed accounts while making these misrepresentations to investors. In order to market the hedge funds, GMB Management and the Bitrans created performance track records beginning in January 1998 showing double-digit annualized return without any down years. They distributed these track records to potential investors in marketing materials, and told investors that they were based on actual trading with real money using Gabriel Bitran’s optimal pricing models. In reality, the Bitrans knew their representations were false and the track records were based on hypothetical historical investments. For two of their hedge funds, they created track records showing annualized returns of 16.2 percent and 11.7 percent with no down years, and told investors the returns were based on actual trading when in fact they were based on hypothetical historical allocations to hedge fund managers.

According to the SEC’s order, investors were misled to believe their money was being invested according to Gabriel Bitran’s unique quant strategy when in reality certain GMB hedge funds were merely investing predominantly in other hedge funds without his involvement. For example, investors in two GMB hedge funds were told that Gabriel Bitran spent 80 percent of his time managing the funds and was involved in reviewing trades in the funds on a daily basis. However, he actually had no role in the management of either fund. Both funds experienced a series of losses at the end of 2008, and GMB eventually dissolved them. When a possible financial fraud at the Petters Group Worldwide was reported in late September 2008, the two hedge funds’ investments in a fund that was entirely invested in the Petters Group became illiquid. However, GMB did not disclose to investors that it had been impacted by the Petters fraud, instead sending investors a letter stating that “a swap instrument that the Fund entered into seeking to realize a higher return on a portion of its uninvested cash” had become illiquid because “one of the parties underlying the swap instrument is currently experiencing a credit and liquidity crisis, in conjunction with other alleged factors.” Furthermore, the two GMB funds suffered significant losses in hedge funds that had invested with Bernard Madoff. These investments in funds that ultimately invested with the Petters Group and Madoff were made contrary to what GMB investors were told.

According to the SEC’s order, during an SEC examination of GMB Capital Management, the firm produced a document that the Bitrans claimed was a real-time record of Gabriel Bitran’s trades since 1998. In fact, the document was false and created solely for the purpose of responding to the SEC staff’s request for the books and records that supported GMB’s performance claims.

The GMB entities and the Bitrans neither admitted nor denied the SEC’s findings in settling the charges. They agreed to pay disgorgement of $4.3 million. Gabriel and Marco Bitran also agreed to pay $250,000 each in penalties and be barred from the securities industry, and the GMB entities will be censured. The SEC’s order requires the Bitrans and the GMB entities to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 204, 206(1), 206(2) and 206(4) of the Advisers Act and Rules 204-2(a)(16) and 206(4)-8 thereunder.

The SEC’s investigation was conducted by Kerry Dakin, Kevin Kelcourse, and Kathleen Shields of the Boston Regional Office. Paul Prata, Elizabeth Ward, and Milton Pepin of the Boston Regional Office worked on the SEC’s examination. Stuart Jackson of the SEC’s Division of Risk, Strategy, and Financial Innovation assisted in the investigation.

# # #

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From: scion4/20/2012 11:35:22 AM
   of 121792
SEC Charges British Twin Brothers Touting "Stock Picking Robot" in Internet Pump-and-Dump Scheme


Washington, D.C., April 20, 2012 – The Securities and Exchange Commission today charged twin brothers from the U.K. with defrauding approximately 75,000 investors through an Internet-based pump-and-dump scheme in which they touted a fake “stock picking robot” that purportedly identified penny stocks set to double in price. Instead, the brothers were merely touting stocks they were being paid separately to promote.

Additional Materials
SEC Complaint

The SEC alleges that Alexander John Hunter and Thomas Edward Hunter were just 16 years old when they set their fraud in motion beginning in 2007. They disseminated e-mail newsletters through a pair of websites they created to tout stocks selected by the robot – which they described as a highly sophisticated computer trading program that was the product of extensive research and development. Their claims were persuasive as the Hunters received at least $1.2 million from investors primarily in the U.S. who paid $47 apiece for annual newsletter subscriptions. Some investors paid an additional fee for the “home version” of the robot software.

In reality, the SEC alleges that the Hunters used a third website to offer their services as stock promoters, claiming that they could “rocket” a stock’s price and increase its volume by sending out newsletters. The Hunters were consequently paid at least $1.865 million in fees from known or suspected stock promoters, and they did not disclose to their newsletter followers the conflicting relationship between their two businesses.

“The Hunters used the anonymity of the Internet and the promise of easy riches to prey on investors,” said Thomas A. Sporkin, Chief of the SEC’s Office of Market Intelligence. “While touting their supposed breakthrough investment technology on two websites, the Hunters were racking up fees as stock promoters through a third.”

According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, the Hunters created websites and to falsely tout that a former trading algorithm programmer from a large investment bank had designed a stock picking robot that they named “ Marl.” The robot could purportedly analyze the over-the-counter securities markets and identify penny stocks that were set to experience large price increases. The brothers offered investors paid subscriptions to their e-mail newsletter that would contain the robot’s latest stock pick.

The SEC alleges that the brothers separately created the website where they marketed their newsletter subscriber list to penny stock promoters and boasted, “One email to this list of people rockets a stock price.” The Hunters were in turn paid to send selected penny stock ticker symbols to their subscribers, who were misled to believe that the stock “picks” were the product of the robot. The Hunters sent out their newsletters near the beginning of the trading day, and the price and volume of the promoted stocks spiked dramatically as newsletter subscribers rushed to purchase shares. However, the stocks typically fell precipitously shortly thereafter, leaving investors with shares worth less than they had purchased them for earlier in the day.

According to the SEC’s complaint, the Hunters also offered subscribers a downloadable version of the stock picking robot for an additional fee of $97. Rather than performing the analysis advertised, the software was actually designed to just deliver users a stock pick supplied by the brothers. In soliciting bids in 2007 from free-lance coders to create the software, Alexander Hunter wrote that the software should “not actually find stocks at all. It should connect to my database and simply request any new stocks I have put in.” He bluntly explained that the software “is almost a ‘fake’ piece of software and needs to simply appear advanced to the user.” Like the newsletter, the home version of the stock picking robot was no more than a fraudulent delivery vehicle for stock symbols that the Hunters had been compensated to promote.

The SEC’s complaint charges the Hunters with violating the anti-fraud provisions of the U.S. securities laws, namely Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking permanent injunctions, disgorgement of all ill-gotten gains with prejudgment interest, and financial penalties.

The SEC’s investigation was conducted by Adam M. Schoeberlein. The SEC’s litigation will be led by Robert I. Dodge.

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From: scion4/21/2012 3:14:56 PM
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Italy police seize $5 billion of U.S. securities

Reuters – 5 hours ago

MILAN (Reuters) - Italy financial police have seized U.S. securities with face values of about $1.5 billion and gold certificates worth above 3 billion euros ($3.96 billion) as part of an investigation into a possible international

financial scam.

The police said on Saturday the “million dollar" operation was a last step in the probe, which centered on the use of bearer Federal Reserve debt securities dating back to the 1930s as

a guarantee for loans or other opaque cross-border transactions.

Rome police seized the securities from a 70-year-old man, who held them in a briefcase along with documents about financial operations, the police said in a statement.

Police said they were carrying out checks, helped by the U.S. Central Bank and the U.S. embassy in Rome, over the authenticity and origin of the securities, as well as over possible links between the man and criminal organizations.

(Reporting By Danilo Masoni; editing by Patrick Graham)

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