Petrobras Reaches Settlement With SEC for Misleading Investors

The Securities and Exchange Commission today charged Brazilian oil-and-gas company Petróleo Brasileiro S.A. with misleading U.S. investors by filing false financial statements that concealed a massive bribery and bid-rigging scheme at the company.  The U.S. Department of Justice also announced today a non-prosecution agreement with Petrobras. read more »

Uber fined $148m for failing to notify drivers they had been hacked

Failure to report 2016 data breach ‘one of the most egregious cases we’ve ever seen’, says Illinois attorney general.

Uber will pay $148m and tighten data security after the ride-hailing company failed for a year to notify drivers that hackers had stolen their personal information, according to a settlement announced on Wednesday.

The company reached the agreement with all 50 states and the District of Columbia after a vast data breach in 2016. Instead of reporting it, Uber hid evidence of the theft and paid ransom to ensure the data wouldn’t be misused.

“This is one of the most egregious cases we’ve ever seen in terms of notification; a yearlong delay is just inexcusable,” Lisa Madigan, the Illinois attorney general, told the Associated Press. “And we’re not going to put up with companies, Uber or any other company, completely ignoring our laws that require notification of data breaches.” read more »

McKinsey Advises Puerto Rico on Debt. It May Profit on the Outcome.

McKinsey & Company is advising the Puerto Rican government on a financial overhaul to lighten its crippling debts — a process that will determine how much money the bankrupt territory’s creditors recoup on their investments.

The giant consulting firm has millions of dollars riding on the outcome. The reason: McKinsey owns bonds issued by Puerto Rico.

That creates a potential conflict of interest between McKinsey’s client, which wants to save as much money as possible, and McKinsey itself, which wants to make as much money as possible on the bonds. read more »

What is a Pyramid Scheme and How Do They Work?

A pyramid scheme hooks consumers with promises of big money, but often leaves them holding the bag in the end.

Pyramid schemes are an especially notorious form of "get rich" scams perpetrated by a small group of individuals who stand to gain the most financially. In a classic pyramid scheme, they are the "top of the pyramid" and get paid before other members of the scheme who stand lower on the pyramid.

The first pyramid scheme is credited to Charles Ponzi, who in 1919 engineered a "top down" scam involving promissory notes payable in 90 days and a promise to repay investors, at 50% interest, who invested in the notes. Ponzi, a Boston-based business man, was the first large-scale pyramid scheme originator who leveraged the cash of new investors (lower down the pyramid) to pay back old investors (higher up on the pyramid) until there were no new investors left, and the cash had dried up for good.)

Ponzi garnered $15 million from the scam, before being arrested and sent to jail, and eventually deported to Italy in 1934. read more »