SEC examiners on hunt for RIA and broker-dealer whistleblower violations

Firms' compliance manuals and contracts will be scrutinized to ensure employee protection

The U.S. Securities and Exchange Commission issued a risk alert Monday, preempting the next item on the examiner's checklist: whistleblower protection.

Compliance manuals, codes of ethics, employment agreements and severance agreements are some of the documents within the scope of the examination. These documents will be combed through by the agency for any provisions that could restrict an employee or former employee from speaking out about potential securities-law violations.

The SEC Office of Compliance Inspections and Examinations issued the alert in the wake of recent enforcement actions where they identified violations of confidentiality by employers.

According to the alert, the SEC is particularly concerned about clauses that require departing employees to “waive their rights to any individual monetary recovery” if they decide to give the government information — a restriction that undermines the incentive to report. read more »

Barclays, UBS settle with bondholders over Libor manipulation

Barclays Plc and UBS AG have agreed to settle U.S. litigation by bondholders who accused the banks of conspiring with rivals to rig the Libor benchmark interest rate, lawyers for the plaintiffs said in court filings on Wednesday.

Terms were not disclosed, and both accords require the approval of U.S. District Judge Naomi Reice Buchwald in Manhattan.

Libor, or the London Interbank Offered Rate, is used to set rates on hundreds of trillions of dollars of transactions, including for credit cards, student loans and mortgages. It is calculated based on submissions by banks that sit on panels. read more »

U.S. Said to Be Closing In on PDVSA-Linked Seizures, Charges

Federal prosecutors are preparing to charge several individuals and confiscate their property over the alleged looting of Venezuela’s state oil company in what may amount to one of the biggest asset seizures in U.S. history.

Three people familiar with the case say the government has been investigating at least a dozen Venezuelans and is expected to file charges in Houston against a few of them as soon as next month. Those on the list, including former executives of Petroleos de Venezuela SA, known as PDVSA, are suspected of having taken bribes from middlemen to award contracts at inflated prices, helping to siphon more than $11 billion out of the country. read more » 

UPDATE 1-Swiss give U.S. $51 mln in assets frozen in PDVSA investigation

Switzerland has transferred about $51 million in formerly frozen assets to the United States in connection with an investigation into alleged corruption at Venezuela's state oil company PDVSA, authorities said on Tuesday.

The funds are linked to two Venezuelan oil magnates who have pleaded guilty in the United States to violating the Foreign Corrupt Practices Act for their role in a PDVSA bribery scheme to which U.S. authorities have linked more than $1 billion, Swiss officials said.  read more »  

Ex-Oppenheimer adviser to plead guilty in U.S. to insider trading

A former investment adviser at an Oppenheimer Holdings Inc unit plans to plead guilty on Tuesday to charges that he traded on inside information supplied by a childhood friend working at Pfizer Inc, according to his lawyer.

David Hobson, 47, will plead guilty in Manhattan federal court to conspiracy and securities fraud charges over conduct prosecutors said began while he was at Royal Bank of Canada unit RBC Capital Markets and then continued at Oppenheimer & Co Inc, Michael Bowers, his lawyer, said in an email.

Hobson, a Providence, Rhode Island, resident, would be the second individual to admit guilt in the case, after Michael Maciocio, Hobson's friend at Pfizer, pleaded guilty in May and reached a deal to cooperate with prosecutors. read more »

IRS Says Facebook Must Comply With Summonses In Tax Row

The IRS urged a California federal judge Tuesday to enforce the agency's seven summonses against Facebook Inc. seeking information on how the social media giant transfers rights from its worldwide business through Facebook Ireland, saying the requests are clear and not overly broad.

The federal government said that although Facebook has indicated it will comply with requests to produce documents to help the agency understand why the company transferred its most valuable international assets to Facebook Ireland and how much those largely intangible assets are worth, Facebook is challenging the scope and breadth of the IRS summonses. read more »

BofA To Pay $13M To End Suit Over Worker’s Fraud Scheme

Bank of America will pay $13 million to resolve a long-running suit brought by the District of Columbia accusing the bank of not having proper safeguards in place, which enabled a district employee to embezzle tens of millions of dollars as part of a tax fraud scheme, prosecutors said Tuesday.

The D.C. attorney general’s office said the settlement will end a $117 million suit filed in 2008 alleging that inadequate controls by Bank of America NA contributed to losses the district suffered from an embezzlement scheme carried out by former city tax office employee Harriette Walters, who pled guilty to issuing $48 million in phony tax refunds and is currently serving a 17-year prison sentence. read more »