In ironic twist for Theranos saga, WSJ names Rupert Murdoch as investor in blood testing business

Rupert Murdoch, executive chairman of News Corp, invested $100 million in Theranos, according to an article in The Wall Street Journal, which cited sources familiar with the matter. News Corp is the parent company of The Wall Street Journal. The fact that Murdoch was named as an investor is a particularly interesting twist in the Theranos saga since The Wall Street Journal published a series of articles that called into question the diagnostic company’s operation, starting in October last year.

The new light on investors came as consumer rights class action law firm Hagens Berman Sobol Shapiro announced it filed a class action lawsuit on behalf of Theranos investors. It is the third complaint against the blood testing company in recent weeks and reflects the continued fallout from the business.

The class action, filed in the U.S. District Court for the Northern District of California, follows other suits against Theranos by former Theranos partner Walgreens and Partners Fund Management, a Theranos investor.

A news release from Hagens Berman Sobol Shapiro summarizing the complaint alleged that Theranos and its officers created a publicity campaign to raise billions of dollars for Theranos and to persuade investors to invest in Theranos, but all the while knew that their blood test technology was “a hoax”.

Steve Berman, managing partner of Hagens Berman, railed against Theranos CEO Elizabeth Holmes in a statement. Although the suit named two plaintiffs — Robert Colman and Hilary Taubman-Dye — Berman claimed that thousands of Theranos investors were misled.

“Thousands of Theranos investors, including those who bring this class action, were spoon-fed continuous lies from the company’s CEO who touted the company’s ‘world-changing’ technology that would ‘revolutionize’ the industry,” he said. “After months of wooing investors to the tune of its CEO’s $9 billion net worth, Theranos’ bubble has burst, and we now see the truth – that Theranos’ promises were built on false statements and omissions.” read more »

SEC Whistle-Blower Awards: No Guarantees

Most reports of corporate misconduct to the SEC’s Office of the Whistleblower do not result in awards to claimants.

The bounty program—established under Section 922 of the Dodd-Frank Act—grants financial awards between 10 percent and 30 percent to qualified individuals who present original information to the SEC resulting in penalties and other sanctions totaling $1 million or more. The program has been popular—the SEC has received an increasing number of tips receive every year since the program was launched. 

The Man Who Invented the World’s Most Important Number

When Minos Zombanakis devised Libor—the London interbank offered rate—half a century ago, he had no way of knowing it would star in one of history’s greatest financial scandals.

The product of a big survey and a little math, Libor helps set interest rates worldwide, affecting the price of more than $300 trillion in mortgages, loans, and derivatives. Despite its ubiquity, few outside the world of finance had heard of Libor until 2012, when regulators found that a dozen banks—Barclays, UBS, and Citigroup among them—had colluded to manipulate the benchmark interest rate and fined them $9 billion. read more »

Venezuela's PDVSA says seeking compensation in U.S. oil bribery case

Venezuela's PDVSA said on Thursday it was taking legal action seeking compensation for a $1 billion scheme in which two oil magnates paid bribes to obtain lucrative contracts from the state oil company.

The two Venezuelan businessmen, Roberto Rincon and Abraham Shiera, were arrested almost a year ago in the United States and have pleaded guilty to violating the Foreign Corrupt Practices Act.

Caracas-based PDVSA initially slammed the case as part of a wider U.S.-led conspiracy and "smear campaign" against socialism. But in its 2015 financial statement, published in July, PDVSA said an internal investigation found it had been the victim of fraud.

On Thursday night, PDVSA said it had given its legal representatives instructions to seek compensation in what is one of Venezuela's biggest corruption cases. read more »

Two Swiss bankers plead not guilty to U.S. offshore tax scheme

Two bankers with Swiss lender Zuercher Kantonalbank (ZKB) pleaded not guilty on Monday to charges they conspired to help American clients and others hide more than $420 million in offshore accounts from U.S. tax authorities.

Stephan Fellmann, 52, and Christof Reist, 58, who live in Switzerland, entered their pleas in federal court in Manhattan after agreeing to face charges contained in an indictment that has been pending since 2012.

Both men along with a third were charged in one of several cases against Swiss bankers and their employers stemming from a U.S. crackdown on offshore tax evasion by wealthy Americans utilizing undeclared Swiss bank accounts. read more »