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From: scion2/10/2012 12:03:04 PM
   of 5507
 
SEC Charges California Hedge Fund Manager Connected to Galleon Insider Trading Case

FOR IMMEDIATE RELEASE
2012-27

Washington, D.C., Feb. 10, 2012 — The Securities and Exchange Commission today charged a hedge fund manager and his Menlo Park, Calif.-based firm for their involvement in the insider trading ring connected to Raj Rajaratnam and hedge fund advisory firm Galleon Management.

Additional Materials
SEC Complaint
sec.gov

The SEC alleges that Douglas F. Whitman and Whitman Capital illegally traded based on material nonpublic information obtained from Rajaratnam associate Roomy Khan, who was Whitman's friend and neighbor. Khan tipped Whitman with confidential details about Polycom Inc.'s fourth quarter 2005 earnings and Google Inc.'s second quarter 2007 earnings prior to the public announcements of those financial results by the companies. Whitman Capital reaped nearly $1 million in ill-gotten gains by trading on Khan's illegal tips.

"Whitman engaged in what even he termed 'slimeball' activity and together with Khan brought new illicit meaning to the maxim 'help thy neighbor,'" said George S. Canellos, Director of the SEC's New York Regional Office.

Sanjay Wadhwa, Associate Director of the SEC's New York Regional Office and Deputy Chief of the Market Abuse Unit, added, "This action should send a strong signal that the SEC will continue to pursue every angle of the Galleon investigation to hold accountable those who have undermined the integrity of our markets by engaging in illegal insider trading."

According to the SEC's complaint, filed in federal court in Manhattan, the inside information about Polycom and Google used by Whitman is the same information that the SEC has previously alleged Khan provided to many of her hedge fund contacts, including Rajaratnam as well as Robert Feinblatt and Jeffrey Yokuty at Trivium Capital.

The SEC alleges that Khan illegally tipped Whitman in January 2006 with information about Polycom's quarterly financial results, and she noted that these details were nonpublic and acquired from a source at Polycom. Whitman Capital accumulated 132,263 shares of Polycom stock in the next two weeks. When the company announced its results on January 25, Whitman Capital liquidated its entire Polycom position for a profit of more than $360,000. On at least one later occasion, in September 2008, Whitman asked Khan to contact her Polycom source to obtain inside information about the company's upcoming earnings so the two could "short it." When Khan rebuffed Whitman citing a fear of getting caught, Whitman suggested that she use "Skype" to avoid detection. Whitman later stated that he would stop speaking to Khan if she wasn't going to be a "slimeball" anymore.

The SEC further alleges that Khan illegally tipped Whitman with inside information about Google's quarterly financial results shortly before the company's post market-close earnings announcement on July 19, 2007. At Whitman's insistence, Khan identified her Google source as an employee of an investor relations firm used by Google. Whitman Capital funds then purchased 2,761 Google put option contracts based on the tip from Khan. On July 20, Whitman Capital closed the put option positions and generated ill-gotten profits of more than $620,000. Afterwards, Whitman sent Khan a large floral arrangement to thank her for the tip.

The SEC's complaint charges Whitman and Whitman Capital with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. The complaint seeks a final judgment permanently enjoining the defendants from future violations of the above provisions of the federal securities laws, ordering them to disgorge their ill-gotten gains plus prejudgment interest, and ordering them to pay financial penalties.

The SEC has charged 30 defendants in its Galleon-related enforcement actions, which have exposed widespread and repeated insider trading at numerous hedge funds and by other traders, investment professionals, and corporate insiders located throughout the country. The insider trading occurred in the securities of more than 15 companies for illicit profits totaling more than $91 million.

The SEC's investigation, which is continuing, has been conducted by John Henderson and Joseph Sansone - members of the SEC's Market Abuse Unit in New York - and Diego Brucculeri and James D'Avino of the New York Regional Office. Kevin McGrath and Valerie Szczepanik will lead the SEC's litigation effort. The SEC thanks the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation for their ongoing assistance in the matter.

# # #

For more information about this enforcement action, contact:

George S. Canellos
Director, SEC's New York Regional Office
(212) 336-1020

Sanjay Wadhwa
Associate Director, SEC's New York Regional Office and Deputy Chief, Market Abuse Unit
(212) 336-0181

Joseph G. Sansone
Assistant Director, SEC's New York Regional Office and Market Abuse Unit
(212) 336-0517


sec.gov

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From: scion2/10/2012 1:07:04 PM
   of 5507
 
Three Defendants Settle and Additional Defendant Charged in Stock Manipulation Ring

U.S. Securities and Exchange Commission

Litigation Release No. 22256/February 10, 2012

SEC v. Dynkowski, et al., Civil Action No. 1:09-361 (D. Del.)

Three Defendants Settle and Additional Defendant Charged in Stock Manipulation Ring

The Securities and Exchange Commission announced today that Chief Judge Gregory M. Sleet of the United States District Court for the District of Delaware entered final judgments against Defendants Nathan M. Michaud and Gerard J. D’Amaro on January 24, 2012, and Defendant Marc J. Riviello on February 3, 2012, in SEC v. Dynkowski, et al., Civil Action No. 1:09-361, a stock manipulation case the SEC filed on May 20, 2009, and amended on March 25, 2010 to charge additional individuals. The SEC’s complaint alleges that Michaud, D’Amaro, and Riviello each participated in market manipulation schemes with Defendant Pawel P. Dynkowski.

As alleged in the complaint, the schemes generally followed the same pattern: Dynkowski and his accomplices agreed to sell large blocks of shares for penny stock companies in exchange for a portion of the proceeds. The shares were put in nominee accounts that Dynkowski and his accomplices controlled. The defendants artificially inflated the market price of the stocks through manipulative trading, often timed to coincide with false or misleading press releases, and then sold shares obtained from the issuers and divided the illicit proceeds.

The complaint alleges that in 2006, Dynkowski, Riviello, Michaud and others participated in a manipulation scheme involving the stock of Asia Global Holdings, Inc., which generated over $4 million in illicit profits. As alleged in the complaint, Dynkowski and Michaud manipulated the price of Asia Global Holdings, Inc. stock using wash sales, matched orders, and other manipulative trading, while Riviello used his position as a registered representative at a broker-dealer to open a series of nominee accounts and execute sell orders for shares obtained from the issuer. The complaint further alleges that Riviello helped launder proceeds from a separate manipulation scheme involving the stock of GH3 International, Inc.

That same year, the complaint alleges, Dynkowski, D’Amaro and others participated in a manipulation scheme involving the stock of Playstar Corp., which generated over $1 million in illicit profits. As alleged in the complaint, D’Amaro arranged for the company to issue misleading press releases that coincided with Dynkowski’s manipulative trading. The complaint further alleges that D’Amaro provided the nominee accounts that were used to sell the shares received from the issuer.

To settle the SEC’s charges, D’Amaro consented to a final judgment that permanently enjoins him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”), and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, orders disgorgement of $177,044 and prejudgment interest of $40,859, and bars D’Amaro from participating in any offering of a penny stock. In a related criminal case, D’Amaro previously pled guilty to conspiracy to commit securities fraud and engage in money laundering and was sentenced to three years in prison and ordered to pay criminal forfeiture of $1.49 million. U.S. v. D’Amaro, Criminal Action No. 09-54-SLR (D. Del.).

Riviello consented to a final judgment that permanently enjoins him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and orders disgorgement of $248,190 and prejudgment interest of $35,078, which was waived based upon his inability to pay. In related administrative proceedings, Riviello consented to a Commission Order barring him from association with any broker or dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and barring him from participating in any offering of a penny stock. In a related criminal case, Riviello previously pled guilty to conspiracy to engage in money laundering and was sentenced to 8 months in prison and ordered to pay criminal forfeiture of $107,000. U.S. v. Riviello, Criminal Action No. 09-23-SLR (D. Del.).

Michaud consented to a final judgment that permanently enjoins him from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and orders him to pay disgorgement of $40,600, prejudgment interest of $3,314, and a civil penalty of $50,000.

Additionally, on December 22, 2011, the SEC filed a second amended complaint charging James Meagher as an additional defendant in this case. The complaint alleges that, in 2007, Dynkowski and Meagher carried out a manipulation scheme involving the stock of Xtreme Motorsports of California, Inc. As alleged in the complaint, Dynkowski and Meagher manipulated the price of Xtreme Motorsports stock using wash sales, matched orders and other manipulative trading, in a scheme that generated over $250,000 in illicit profits. The complaint alleges that Meagher violated Sections 5(a), 5(c) and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The complaint seeks against Meagher permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil monetary penalties, and an order barring him from participating in any penny stock offerings.

The SEC thanks the following agencies for their cooperation and assistance in connection with this matter: the U.S. Attorney’s Office for the District of Delaware; the Delaware State Police; United States Immigration and Customs Enforcement, Department of Homeland Security, Homeland Security Investigations; and the Department of the Treasury, Internal Revenue Service, Criminal Investigation.



sec.gov

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To: scion who wrote (1371)2/10/2012 1:07:33 PM
From: scion
   of 5507
 
Administrative Proceedings: 34-66374 Feb. 10, 2012 Marc J. Riviello

sec.gov

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To: scion who wrote (636)2/10/2012 3:40:54 PM
From: scion
   of 5507
 
SEC bars spam broker Berger from industry

2012-02-10 14:13 ET - Street Wire
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-GPPL) Global Peopleline Telecom Inc
by Mike Caswell
stockwatch.com*SEC-1925738&symbol=*SEC&news_region=C

The U.S. Securities and Exchange Commission has secured a broker ban against Gregg Berger, the New York man who served several nominee accounts in a Vancouver-linked spam pump-and-dump scheme. The ban, contained in an administrative order handed down on Thursday, Feb. 9, stems from his role in helping clients dump $33-million worth of spam promoted stocks between 2004 and 2006. (All figures are in U.S. dollars.) The SEC says he fraudulently earned $684,542 in commissions.

Mr. Berger, 48, previously pleaded guilty to criminal charges for his role in the scheme and received a 24-month jail term, which he is serving at the Brooklyn Metropolitan Detention Center. He also agreed to forfeit $600,000. The case against him was part of a larger civil and criminal prosecution against a group of promoters. The SEC said the group, which included Vancouver's How Wai John Hui, used spam to pump eight thinly traded Chinese stocks on the OTC Bulletin Board and pink sheets.

Mr. Berger was the last to be criminally charged, as prosecutors did not indict him until others previously jailed agreed to testify for the government. Those potential witnesses included Mr. Hui and Detroit resident Alan Ralsky, the self-proclaimed "Godfather of Spam." Although neither man had to actually testify, their agreement to co-operate earned each of them a reduction of 1-1/2 years in their four-year sentences.

SEC's complaint

The charges against Mr. Berger are contained in a civil complaint filed on Feb. 1, 2011, in the Eastern District of Michigan. In it, the SEC claimed that he helped Mr. Hui and the others dump millions of shares through at least 30 nominee accounts, while sending the proceeds offshore. The SEC said it should have been clear to Mr. Berger that he was helping an illegal pump-and-dump scheme. Among other things, he routinely accepted instructions for the massive selling from people who were not named on the accounts, and he knew that at least one of those giving him the sell orders was an insider.

The spam, as described in the complaint, targeted eight companies that went public in mergers with private Chinese entities. As part of the transactions, the companies issued large blocks of shares to the nominee accounts that Mr. Berger served. The SEC said Mr. Hui, a dual citizen of Canada and China, controlled many of those nominees.

The stocks were then typically subject to massive e-mail spam campaigns that made unrealistic predictions. With one of the companies, Vancouver-based China Mobility Solutions Corp., the messages predicted it would hit $1.20 at a time when it had last traded at 10.5 cents. "With the ACQUISITION of TopBiz the company is getting the attention it deserves. Watch this one early as the price SOARS like a HAWK!!!" one of the messages stated.

The China Mobility e-mails went out from June, 2005, to November, 2006, during which time the stock went from eight cents to a 74-cent high, with its volume peaking at 3,048,830 shares. It later dropped to 6.8 cents, after the spam ended. The SEC said that another Vancouver defendant, China Mobility chief executive officer Angela Du, dumped $1.6-million worth of stock in that period. According to the complaint, Mr. Berger was either aware of the spam campaigns or was reckless in not knowing about them, as he received some of the spam in his own e-mail account.

The complaint also stated that he was a long-time friend of now-jailed California promoter Francis Tribble, who was an insider of some of the companies. During the spamming, Mr. Berger received several gifts from Mr. Tribble. These included a trip to Las Vegas, fully paid outings to night clubs, cash and a watch.

The scheme, as described in the complaint, ran from December, 2004, to November, 2006. The other stocks the men promoted were China World Trade Corp. (also a Vancouver company), Pingchuan Pharmaceuticals Inc., Worldwide Biotech and Pharmaceuticals Inc., China Digital Media Corp., m-Wise Inc. and Score One Inc. Those pump-and-dumps followed similar patterns to those of China Mobility.

The complaint sought disgorgement of ill-gotten gains, appropriate civil penalties and penny stock bans.

Mr. Berger settled the SEC case on Jan. 27, 2012, agreeing to a $684,434 disgorgement order and to a permanent penny stock ban. Most of the other defendants have also settled. Mr. Hui, who is scheduled for release from the Northeast Ohio Correctional Center on May 4, 2012, agreed to disgorge $843,834 in ill-gotten gains and to serve a permanent penny stock ban. The largest settlement was with Mr. Tribble, who agreed to disgorge $2.5-million and to pay $349,208. None of the men admitted to any wrongdoing (although they have either pleaded guilty or been convicted in separate criminal cases).

The only outstanding defendant is Ms. Du, who has ignored the case. The SEC is seeking $2-million (U.S.) in financial penalties for her as well as a penny stock ban. There were no criminal charges against her.

The SEC also secured $995,205 in administrative fines against Mr. Berger's former employer, Gilford Securities Inc., for supervision failures. The firm and three of its employees agreed to the fines without admitting to any wrongdoing.

stockwatch.com*SEC-1925738&symbol=*SEC&news_region=C

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From: the_worm062/10/2012 3:42:04 PM
   of 5507
 
International Scamster Jonathan Bryant, CEO of scam company EIGH comments on emails to a stockholder:


investorshub.advfn.com

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To: scion who wrote (1363)2/11/2012 12:21:00 PM
From: scion
   of 5507
 
A Court Filing Says a Mets Owner Knew of Madoff Concerns

By RICHARD SANDOMIR
Published: February 10, 2012
nytimes.com

To Noreen Harrington, a former Goldman Sachs executive, it was not a hard call back in 2003.

After evaluating Bernard L. Madoff’s investment performance, she concluded Madoff was either breaking the law or making up his stock trading entirely.

His performance, she said, very well could be pure “fiction.”

Harrington, then the chief investment officer for a hedge fund owned in part by the owners of the Mets, shared her opinion at the time with her superiors, including Saul Katz, one of the two men who own the Mets.

Katz, Harrington recalled recently, did not like what she had to say. He and his brother-in-law, Fred Wilpon, had sunk much of their personal fortunes into Madoff’s operation, and had been banking profits from those investments for decades. Madoff was a personal friend.

Told that Madoff might be a thief, Katz got “visibly angry,” Harrington recalled. But she stuck to her guns. She said she could not be a party to investing in Madoff. When Katz and his partners in the hedge fund decided to reject her caution, she resigned.

Harrington’s account of her meeting with Katz and others involved in the fund is contained in court filings made Thursday, just weeks from the March 19 start date of Katz and Wilpon’s trial in federal court. The men have been accused of improperly benefiting from their relationship with Madoff over years of investing with him, and of ignoring evidence he might have been engaged in wrongdoing.

For the court-appointed trustee suing Wilpon and Katz to recover money on behalf of Madoff’s victims, Harrington’s account is a new and vivid example of the men’s refusal to heed warnings about Madoff, all while they continued to enrich themselves with profits from their investments. Wilpon and Katz’s lawyers called Harrington’s account — contained in a deposition given last December — “suspect and entirely unsubstantiated.” They have seized on her lack of concrete proof about Madoff to portray her as unreliable.

Wilpon and Katz have steadfastly insisted that they were innocent victims of Madoff’s fraud, betrayed by a longtime friend, and have accused the trustee of trying to ruin their reputations with fabricated evidence in an effort to strong-arm a lucrative settlement from them.

Harrington — who will probably testify at trial — appears to be a respected financial executive, having worked at Goldman Sachs and Barclays Capital. She is now at M.D. Sass, an investment firm.

She gained wide notoriety in 2003 as the whistle-blower who tipped off Eliot Spitzer, then the New York State attorney general, to illegal trading in mutual funds by traders at another of her former employers, the Hartz Group. Her action led to a wider investigation and a shake-up in the mutual fund industry.

In 2002, Harrington was hired by Sterling Stamos, a hedge fund founded by Wilpon, Katz and a rising star in the investment world, Peter Stamos. Harrington, a 20-year veteran of the hedge-fund industry, was someone willing to offer strong opinions.

By the summer of 2003, Sterling Stamos was considering investing with J. Ezra Merkin, a hedge fund manager who, a civil fraud case claims, was steering much of his clients’ money to Madoff. Merkin’s returns were, essentially, Madoff’s returns.

Harrington recalled meeting with Merkin, who she said was not cooperative.

She said her efforts to inquire into Madoff’s operation were rebuffed with disdain.

“You don’t get it, do you?” Harrington testified that Merkin told her. “This is a privilege. You don’t get to ask questions.”

Her suspicions raised, she by her account gave Katz an earful at a Sterling Stamos meeting.

“What do you think Madoff does with the money?” Katz asked Harrington.

She accused Madoff of “front-running”— a form of insider trading, which is illegal — and said, “if it wasn’t that, I believed it was fiction.”

“What do you mean, fiction?” Katz asked, according to her testimony.

She had had 20 years of experience in the hedge fund industry, yet she could not figure out Madoff’s math. The numbers were too good to be true.

“I’ve had the privilege of working with extremely bright people in this industry,” she said in her deposition, “and yet they didn’t seem to be this good to me.”

Katz was upset with Harrington because “these were people he respected a great deal, and my responses, whether it be front-running or fiction, portrayed something illegal or bad,” she recalled in her deposition.

She said at the time she admitted to Katz that she had no proof. Only her expert opinion.

“I responded after he was angry that I had been wrong before, I could be wrong now,” she testified.

Harrington asked Katz if she could meet with Madoff to do the due diligence necessary to make the investment with Merkin work. He ignored her, she said.

But her assessment of Madoff’s strong, consistent performance was withering. “I don’t believe the numbers are worth the paper they’re written on,” she said she told Katz and a number of others in the Sterling Stamos group.

When Katz was asked under oath about Harrington and her warnings, he said he had no memory of any meeting or any warnings.

Instead, he testified that Harrington was “one angry lady, disruptive in the office, and as I recall, when she left she was even some sort of a whistle-blower and didn’t have good relationships wherever she was.”

He said her behavior led to her departure from Sterling Stamos.

Harrington, under oath, told a different story. She testified that after learning some time after the meeting that her superiors would make the investments she warned them against, she quit.

“If you’re going to make this investment,” she said, “I’m gone.”

nytimes.com

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To: scion who wrote (1375)2/13/2012 10:54:22 AM
From: scion
   of 5507
 
Mets made twin killing by investing players' deferred comp with Madoff: Picard

Team owners allegedly looked to profit off the float, funneling money to Ponzi king

February 10, 2012
investmentnews.com

The New York Mets owners were so “hooked” on money from Bernard Madoff that they used it in place of disability insurance for the baseball team's players and to fund players' deferred-compensation plans, said the liquidator of the con man's firm.

Irving Picard, the Madoff trustee, told a federal judge he is entitled to pursue a $386 million lawsuit against the Mets owners because they chose to be “willfully blind” to the fraud to maintain an income stream that was essential to their business. The Mets' Madoff accounts funded working capital, as well as insurance and compensation, he said.

“When faced with cash crunches from week to week, the Mets routinely and confidently relied on future Madoff returns to bridge the gap,” and any excess cash went back into Madoff's firm, Picard said in a filing yesterday in U.S. District Court in Manhattan. “The Mets relied on Madoff's returns as a predictable source of income for a business -- professional baseball -- with an otherwise unpredictable revenue stream.”

The Mets owners, after losing money in the Ponzi scheme and an income stream from Madoff, have said they are trying to sell stakes in the Major League Baseball team. They have hired a restructuring firm to advise them on their finances, which remain under threat from Picard's claims.

Karen Wagner, a lawyer for the Mets owners, didn't immediately respond to an e-mail seeking comment on Picard's filing.

Fictitious Profits

Sterling Equities Inc. partners Fred Wilpon and Saul Katz, the team's owners, have said they trusted their broker and never suspected him of any fraud, let alone a Ponzi scheme. Picard's suit should be thrown out because he cannot prove his case, only make allegations, they have said.

Yesterday, the Mets owners said they should be allowed to keep $83 million in fictitious profits taken from Madoff's Ponzi scheme as well as their principal, because the money was owed by the registered brokerage to its clients. Picard had asked U.S. District Judge Jed Rakoff to rule now on his right to take the profits, in advance of a trial set for March 19.

Rakoff last year threw out most of Picard's $1 billion in claims against the Mets owners, leaving the trustee to seek about $386 million. The judge said Picard must prove the defendants, including Wilpon and Katz, were willfully blind to Madoff's crimes if he wants to recoup more than the $83 million withdrawn in the two years before Madoff's 2008 arrest.

‘Banking' on Madoff

Parts of Picard's filing are blacked out in accord with confidentiality agreements, including data on what he called the growing size of “Madoff-related loans,” and the agreements governing the debt.

“By the 2000s, there was not a thread of their business operations that was not entangled” with their Madoff accounts, Picard said. “Banking” on the con man, the Mets owners chose to ignore red flags, including articles questioning Madoff's returns and “personal warnings” from investors, he said.

Profits from real estate and other businesses went into Madoff accounts, which provided “guaranteed returns” that were used to pay quarterly taxes, living expenses and loan interest, Picard said. The Sterling partners' assets, including their stake in SportsNet New York, a television network, “are by their very nature illiquid, meaning they could not and cannot provide cash on demand when needed by the many Sterling businesses,” he said.

‘Double Ups'

Money in Madoff accounts was used as collateral for loans from Bank of America Corp., which financed more investments in Madoff, according to Picard. Sterling partners called those loans “double ups,” he said.

According to Picard, Sterling partner Arthur Friedman testified the partners were warned that if Madoff was ever investigated by regulators, their lenders might put them in default.

“If there were an investigation and if the money was tied up, then we might run into a problem,” Friedman said in describing the warning, according to Picard. The partners weren't warned that Madoff was actually doing something wrong, Friedman told Picard.

By 2001, Wilpon and Katz were reading articles that questioned Madoff's methods and had received “personal warnings” about the money manager, according to Picard.

‘Event of Default'

After Madoff's arrest, when Sterling restructured a bank loan of more than $500 million, lenders stipulated that a judgment in the Madoff case of more than $100 million, or in some cases $50 million, would constitute “an event of default,” Picard said in his complaint.

Picard, a partner at law firm Baker & Hostetler LLP in New York, originally demanded $300 million in profit and $700 million in principal from Wilpon, Katz and a group of family members and related entities, saying they turned a blind eye to Madoff's Ponzi scheme.

In September, Rakoff dismissed all or part of nine of 11 claims in Picard's suit against Wilpon and Katz. He has set a trial for the rest of the claims. Rakoff last month refused to allow Picard to appeal his decision.

Madoff, 73, pleaded guilty in 2009 to orchestrating what prosecutors called the biggest Ponzi scheme in history. He is serving a 150-year sentence in a federal prison in North Carolina.

--Bloomberg News--

investmentnews.com

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To: scion who wrote (1366)2/13/2012 10:58:00 AM
From: scion
   of 5507
 
Tearful Stanford investor tells jury of losing life savings

By Bloomberg - Saturday, February 11th, 2012.
antiguaobserver.com

HOUSTON – A retired US Air Force medic told jurors at R Allen Stanford’s criminal trial that she lost four- fifths of her savings and her dream of a comfortable retirement on now-worthless certificates of deposit from Stanford’s bank.

“Being in the military, I was just a middle-class, hard- working person who took care of my family and made my ends meet,” a tearful Dianne Hammer testified today in Stanford’s fraud trial in federal court in Houston. “You really don’t get rich serving in the military.”

Hammer’s broker at Stanford Group Company and marketing brochures from Stanford International Bank didn’t say that investors were supposed to have a net worth of $1 million or annual incomes of $250,000 to buy CDs from the Antiguan bank, she said. Prosecutors claim Stanford ran the bank as a Ponzi scheme that defrauded investors of more than $7 billion.

Testifying for prosecutors, Hammer, 54, said she increased her Stanford CD holdings from $50,000 to $260,000 in August 2008, after she discussed deteriorating financial market conditions with her Stanford broker.

“He said since it was an overseas bank, it was safer than banks in the U.S. were at the time,” she said. The adviser also recommended she combine investments with her elderly parents so the family could qualify for a higher interest rate on their joint holdings at SIB, she said.

Stanford, 61, has denied wrongdoing. His lawyers have told jurors that all of Stanford’s customers were wealthy, accredited investors, with sophisticated investment knowledge.

Military Pension

Hammer told jurors that she now lives on a modest military pension. When US securities regulators seized Stanford’s operations on suspicion of fraud in February 2009, Hammer said her SIB statement listed her CD account balance as $280,679.

Her parents’ statement that month indicated a CD balance of $295,604, which she said represented roughly 90 per cent of their savings. Her mother has since died of cancer, and her father was diagnosed with Alzheimer’s disease and lives in an assisted-living facility.

Assistant US Attorney Gregg Costa asked Hammer if she or her parents have gotten any of that money back. She said they haven’t.

“You’ve got to have money to be able to retire,” Hammer testified. “I wanted to be able to travel, buy a house, and help my children as I could, too.”

Costa showed Hammer a photo of a yacht that Stanford spent $13 million renovating and a snapshot of the former financier standing beside a glass case filled with $20 million, the prize money awarded to winners of a cricket tournament Stanford sponsored.

“If you’d known that millions of dollars in CD money was going to rebuild yachts and to cricket prizes like in that glass case, would you have bought the CDs?‘‘ Costa asked. ‘‘Do you wish you had some of the money in this yacht or in this glass case?’’

The judge barred Hammer from answering when Stanford’s lawyer, John Parras, objected to the questions as inappropriate for a jury weighing guilt or innocence.

Stanford’s trial, which may last six weeks, is completing its third week of testimony. (Bloomberg)

antiguaobserver.com

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From: the_worm062/13/2012 12:57:03 PM
   of 5507
 
[JBII]: The Law Firm of Levi & Korsinsky, LLP Launches an Investigation into Possible Securities Laws Violations by JBI, Inc.

Last update: 2/13/2012 12:09:00 PM

NEW YORK, Feb 13, 2012 (BUSINESS WIRE) -- Levi & Korsinsky is investigating potential claims on behalf of purchasers of JBI, Inc. ("JBI" or the "Company") (pink:JBII) securities concerning possible violations of federal securities laws.

For more information, click here: .

The investigation concerns possible breaches of fiduciary duties by the Company's officers and directors in connection with the erroneous booking of media credits in violation of generally accepted accounting principles ("GAAP"). On January 4, 2012, the Securities and Exchange Commission (the "SEC") filed a complaint alleging that JBI materially overstated certain assets in its 2009 third quarter and year-end balance sheets. Specifically, in its financials JBI listed media credits purchased by the company for $1,000,000 in common stock as having a value of $9,997,134, which made the media credits the single largest asset on JBI's balance sheet.

The Defendants then used the overvalued financial statements in two private capital raising efforts geared toward raising the capital necessary to begin commercial operation and production of Plastic2Oil, a process designed to convert plastic waste into oil. JBI raised over $8.4 million for the company while relying on misrepresentations to investors about the company's assets and valuation. Shortly after obtaining the approximately $8.4 million in financing, the company issued a statement indicating that its financial statements could no longer be relied upon due, in part, to the erroneous valuation of certain assets on the balance sheet. Upon this news, JBI stock plummeted from a closing price of $2.35 per share on January 3, 2012 (the day prior to the disclosure), to a close of $0.86 per share the following day.

If you own JBII stock and wish to obtain additional information about the investigation and your legal rights, please contact Joseph E. Levi, Esq. either via email at jlevi@zlk.com or by telephone at (212) 363-7500, toll-free: (877) 363-5972, or visit .

Levi & Korsinsky has expertise in prosecuting investor securities litigation and extensive experience in actions involving financial fraud and represents investors throughout the nation, concentrating its practice in securities and shareholder litigation. Attorney advertising. Prior results do not guarantee similar outcomes.

CONTACT: Levi & Korsinsky, LLP Joseph Levi, Esq. Eduard Korsinsky, Esq. 30 Broad Street - 15th Floor New York, NY 10004 Tel: (212) 363-7500 Toll Free: (877) 363-5972 Fax: (212) 363-7171

SOURCE: Levi & Korsinsky, LLP

Levi & Korsinsky, LLP Joseph E. Levi, Esq. (212) 363-7500, toll-free: (877) 363-5972 jlevi@zlk.com
Copyright Business Wire 2012

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From: scion2/13/2012 7:07:13 PM
   of 5507
 
SEC Office of the Whistleblower

sec.gov

Claim an Award

February 1, 2012

We post Notices of Covered Action for each Commission action where a final judgment or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.

The inclusion of a Notice means only that an order was entered with monetary sanctions exceeding $1 million. By posting a Notice for a particular case, we are not making any determinations either that (i) a whistleblower tip, complaint or referral led to the Commission opening an investigation or filing an action with respect to the case or (ii) an award to a whistleblower will be paid in connection with the case.

Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.

Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award by submitting a completed Form WB-APP to the Office of the Whistleblower by midnight on the claim due date listed for that action. Please send completed forms to the Office of the Whistleblower by mail at 100 F Street NE, Mail Stop 5971, Washington, DC 20549 or by fax at (703) 813-9322.

Notice No. Action Notice Date Claim Due Dat
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