EPA SAYS PARTS OF BELDNG MI DON'T MEET AIR QUALITY STANDARDS FOR LEAD

The followng is an excerpt form an e-mail  the EPA sent out:
 
"Chicago, Illinois (June 15, 2011) – The U.S. Environmental Protection Agency today proposed approval of the Michigan Department of Environmental Quality’s finding that parts of the City of Belding (Ionia County) do not meet the new national air quality standard for lead based on data from an air monitor there.  If designated as nonattainment later this year, Michigan will be required to submit a plan to EPA by June 2013 that will result in a reduction in lead emissions to bring this area into compliance with national air quality standards.
In 2008, EPA strengthened the nation’s air quality standards by setting a limit for lead of 0.15 micrograms of lead per cubic meter.   EPA also required that monitors be located near significant sources of lead emissions.
In response, MDEQ placed a monitor in Belding because Mueller Industries is a source of lead emissions. MDEQ has already begun taking steps to reduce elevated lead levels in Belding." 

MEDICARE FRAUDSTER SENTENCED TO PRISON

If the cost of government is ever to come into control then fraudsters have to go to prison. The following is an excerpt from the Department of Justice website:

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, June 7, 2011
Patient Recruiter Sentenced to 77 Months in Prison in Connection with $9 Million Medicare Fraud Scam in Detroit
WASHINGTON – Miami resident Reynel Betancourt, 51, was sentenced today to 77 months in prison for his participation in a $9 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida also sentenced Betancourt to three years of supervised release following his prison term and ordered him to pay approximately $6 million in restitution, jointly and severally with his co-defendants. Betancourt was originally charged by indictment in the Eastern District of Michigan and after his arrest in Miami, he consented to have his case transferred to the Southern District of Florida for his plea and sentencing.
Betancourt pleaded guilty on March 29, 2011, to one count of conspiracy to commit health care fraud and to one count of money laundering conspiracy. According to the plea documents, beginning approximately in March 2006, Betancourt entered into an agreement with the owners of Dearborn Medical Rehabilitation Center (DMRC) to recruit patients for DMRC, a business that purported to provide infusion and injection therapy services to Medicare patients.
Betancourt admitted to paying patients to sign paperwork claiming that they had received injection therapy services and specialty medications that they did not receive. DMRC billed the Medicare program for more than $9 million in purported infusion therapy treatments, which Betancourt admitted were not medically necessary and not provided. Additionally, Betancourt admitted that he laundered the proceeds of the Medicare fraud conspiracy through two sham corporations that he created solely for the purpose of concealing the fraud proceeds.
The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
The case was prosecuted by Assistant U.S. Attorney Philip A. Ross and Special Assistant U.S. Attorney Thomas W. Biemers of the Eastern District of Michigan and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

EDGEFUND CAPITAL LLC ACCUSED OF FRAUD BY SEC

The following excerpt came from the SEC web site:

" Litigation Release No. 21971 /May 16, 2011
The Securities and Exchange Commission filed an emergency enforcement action to halt a fraudulent scheme being conducted by John Clement of Encinitas, Calif., and his company Edgefund Capital LLC.
The SEC alleges that Clement ran a purportedly profitable day trading business out of his home and raised at least $2.1 million since August 2008 from 22 investors in the San Diego area. Clement hyped the profit potential by falsely promising returns of 1 to 2 percent per month to investors in his hedge funds (The Edgefund, LP and The Edge Fund Ltd., LP). He falsely claimed that the risk potential was limited because of his purported 5 percent stop-loss rule, and he falsely assured investors that they could request a return of their investments at any time upon written request. The SEC alleges that Clement has misappropriated and misspent all of the investor funds.
The Honorable Larry A. Burns, U.S. District Judge for the Southern District of California, granted the SEC’s requests for an immediate freeze of the assets of Clement and Edgefund Capital and an order prohibiting Clement and Edgefund Capital from destroying evidence. The court will hold a hearing on May 16, 2011, on the SEC’s motion for a preliminary injunction.
The SEC alleges that in order to conceal his fraud, Clement sent fabricated account statements to at least one investor that reflected an inflated fund balance of $8.2 million. In fact, the hedge fund accounts at that time were not even funded. Beginning March 29, 2011, Clement began telling investors that an SEC investigation had impacted his ability to communicate with them, frozen his bank accounts, and blocked his securities trading activities. Although the SEC was investigating Clement’s operations, he lied in his other assertions to investors.
The SEC’s complaint charges Clement and Edgefund Capital with violating the antifraud provisions, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, of the federal securities laws. In addition to the emergency relief, the complaint seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, and financial penalties.”

SANDLER O'NEILL AT GLOBAL EXCHANGE AND BROKERAGE CONFERENCE

Remarks, Sandler O’Neill Global Exchange and Brokerage Conference

Chairman Gary Gensler

June 9, 2011
Good afternoon. I thank Sandler O’Neill and Rich Repetto for inviting me to speak today. I am honored to be back with you, having been with you last year just as Congress was enacting historic legislation – the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Financial Crisis
The 2008 financial crisis was very real. Millions more Americans are out of work today than if not for the financial crisis. Millions of homeowners now have homes worth less than their mortgages. Millions of people have had to dig into their savings; millions more haven’t seen their investments regain the value they had before the crisis. As Americans are still struggling, still out of work and still very careful with their spending, we all are directly affected. And there remains significant uncertainty in the economy.
The 2008 financial crisis came upon us because the financial system failed. The financial regulatory system failed as well. They failed the American public and they failed everybody in this room. When AIG and Lehman Brothers faltered, we all paid the price.
Though there were many causes to the crisis, it is clear that swaps played a central role. They added leverage to the financial system with more risk being backed up by less capital. They contributed, particularly through credit default swaps, to the bubble in the housing market and helped to accelerate the financial crisis. They contributed to a system where large financial institutions were thought to be not only too big to fail, but too interconnected to fail. Swaps – initially developed to help manage and lower risk – actually concentrated and heightened risk in the economy and to the public.
Who would deny that AIG’s ineffectively regulated $2 trillion swaps portfolio, cancerously interconnected to other financial institutions, tragically contributed to the crisis?
Derivatives Markets
Each part of our nation’s economy relies on a well-functioning derivatives marketplace. The derivatives market – including both the historically regulated futures market and the heretofore unregulated swaps market – is essential so that producers, merchants and other end users can manage their risks and lock in prices for the future. Derivatives help these entities focus on what they know best – innovation, investment and producing goods and services – while finding others in a marketplace willing to bear the uncertain risks of changes in prices or rates.
With notional values of more than $300 trillion in the United States – that’s more than $20 of swaps and futures for every dollar of goods and services produced in the U.S. economy – derivatives markets must work for the benefit of the American public. Members of the public keep their savings with banks and pension funds that use swaps to manage their interest rate risks. The public buys gasoline and groceries from companies that rely upon futures and swaps to hedge their commodity price risks.
That’s why oversight must ensure that these markets function with integrity, transparency, openness and competition, free from fraud, manipulation and other abuses. Though the CFTC is not a price-setting agency, recently volatile prices for basic commodities – agricultural and energy – are very real reminders of the need for common sense rules in the derivatives markets.
The derivatives markets have changed significantly since the Commodity Futures Trading Commission (CFTC) was established in 1975.
A new unregulated derivatives market – the swaps market – developed in the 1980s. The swaps market has grown in size and complexity to far outstrip the futures market – more than seven times the size.
The futures market has changed dramatically as well.
First, the markets have become much more electronically traded. Instead of being traded in the pits, more than 80 percent of futures and options on futures were traded electronically in 2010.
Second, the makeup of the market has changed. In contrast with the early days of the
CFTC, swap dealers now comprise a significant portion of the markets. Also, investors today treat commodities as an asset class for passive index investment. Based on published CFTC data, financial actors, such as swap dealers, managed money accounts and other non-commercial reportable traders, make up a significant majority of many of the futures markets.
For example, based upon CFTC data as of May 31, 2011, only about 12 percent of gross long positions and about 20 percent of gross short positions in the WTI crude oil market were held by producers, merchants, processors and users of the commodity. Similarly, only about 10 percent of gross long positions and about 39 percent of gross short positions in the Chicago Board of Trade wheat market were held by producers, merchants, processors and users of the commodity.
Third, based upon CFTC data, the vast majority of trading volume in key futures markets – up to 80 percent in many markets – is day trading or trading in calendar spreads. Thus, only a modest proportion of average daily trading volume results in reportable traders changing their net long or net short futures positions for the day. This means that only about 20 percent or less of the trading is done by traders who bring a longer-term perspective to the market on the price of the commodity. We plan to publish historical data on directional position changes later this month on our website to enhance market transparency.
The Dodd-Frank Act
To address these changes in the derivatives markets as well the real weaknesses in swaps market oversight exposed by the financial crisis, Congress included a significant package of reforms in the Dodd-Frank Act.
Broadening the Scope
Foremost, the Dodd-Frank Act broadened the scope of regulatory oversight of the derivatives market. The CFTC and the Securities and Exchange Commission (SEC) will, for the first time, have oversight of the swaps and security-based swaps markets.
Furthermore, the Dodd-Frank Act extended the CFTC’s oversight to include registering foreign boards of trade providing direct access to U.S. traders. A foreign board of trade seeking to register in the U.S. will have to establish certain rules similar to U.S. exchanges. This new authority enhances the Commission's ability to ensure that U.S. traders cannot avoid essential market protections by directly trading economically equivalent contracts on foreign exchanges.
Promoting Transparency
Importantly, the Dodd-Frank Act brings transparency to the derivatives marketplace. Economists and policymakers for decades have recognized that market transparency benefits the public.
The more transparent a marketplace is, the more liquid it is, the more competitive it is and the lower the costs for hedgers, borrowers and their customers.
The Dodd-Frank Act brings transparency in each of the three phases of a transaction.
First, it brings pre-trade transparency by requiring standardized swaps – those that are cleared, made available for trading and not blocks – to be traded on exchanges or swap execution facilities.
Second, the Dodd-Frank Act brings real-time post-trade transparency to the swaps markets. This provides all market participants with important pricing information as they consider their investments and whether to lower their risk through similar transactions.
Third, the Dodd-Frank Act brings transparency to swaps over the lifetime of the contracts. If the contract is cleared, the clearinghouse will be required to publicly disclose the pricing of the swap. If the contract is bilateral, swap dealers will be required to share mid-market pricing with their counterparties.
Additionally, the Dodd-Frank Act includes robust recordkeeping and reporting requirements for all swaps transactions so that regulators can have a window into the risks posed in the system and can police the markets for fraud, manipulation and other abuses.
Lowering Risk
Another key reform of the Dodd-Frank Act is to lower risk posed by the swaps marketplace to the overall economy by directly regulating dealers for their swaps activities and moving standardized swaps into central clearing.
Oversight of swap dealers, including capital and margin requirements, business conduct standards and recordkeeping and reporting requirements will reduce the risk posed to the economy by these dealers.
The Dodd-Frank Act’s clearing requirement directly lowers interconnectedness in the swaps markets by requiring standardized swaps that are entered into and amongst financial institutions to be brought to central clearing.
Enforcement
Effective regulation requires an effective enforcement program. The Dodd-Frank Act enhances the Commission's enforcement authorities in the futures markets and expands them to the swaps markets. The Act also provides the Commission with important new anti-fraud authority and anti-manipulation authority based upon similar authority that the SEC, Federal Energy Regulatory Commission and Federal Trade Commission have for securities and certain energy commodities.
These new authorities expand the CFTC's arsenal of enforcement tools so that, for the first time, we can go after reckless fraud, fraud-based manipulation schemes and reckless and harmful disruptive trading. We will use the tools to be a more effective cop on the beat, to promote market integrity and to protect market participants.
Position Limits
Another critical reform of the Dodd-Frank Act relates to position limits. Position limits have served since the Commodity Exchange Act passed in 1936 as a tool to curb or prevent excessive speculation that may burden interstate commerce.
In the Dodd-Frank Act, Congress mandated that the CFTC set aggregate position limits for certain physical commodity derivatives. The Dodd-Frank Act broadened the CFTC’s position limits authority to include aggregate position limits on certain swaps and certain linked contracts traded on foreign boards of trade in addition to U.S. futures and options on futures. Congress also narrowed the exemptions traditionally available from position limits by modifying the definition of bona fide hedge transaction, which particularly would affect to swap dealers.
When the CFTC set position limits in the past, the agency sought to ensure that the markets were made up of a broad group of market participants with a diversity of views. At the core of our obligations is promoting market integrity, which the agency has historically interpreted to include ensuring that markets do not become too concentrated.
Conclusion
Only with reform can the public get the benefit of transparent, open and competitive swaps markets. Only with reform can we reduce risk in the swaps market – risk that contributed to the 2008 financial crisis. Only with reform can users of derivatives and the broader public be ensured of market integrity in the futures and swaps markets.
Each one of the derivatives’ reforms is critical to protecting the public.
It is essential that there be oversight of the entire derivatives market, including swaps and futures. It is essential that we shine the light of transparency on the swaps market to ensure that they work for the American economy. It is essential that we lower risk in these markets to prevent taxpayers from footing the bill of future financial institution failures. It is essential to have effective cops on the beat to police both the swaps and futures markets for fraud, manipulation and other abuses. And it is essential to complete the task of implementing the aggregate position limits regime, Congressionally mandated to guard against the burdens of excessive speculation.
There have been suggestions to delay implementation of the Act or limit funding for the CFTC, despite its significantly expanded mission.
The CFTC must be adequately resourced to police the markets and protect the public. The CFTC is taking on a significantly expanded scope and mission. By way of analogy, it is as if the agency previously had the role to oversee the markets in the state of Louisiana and was just mandated by Congress to extend oversight to Alabama, Kentucky, Mississippi, Missouri, Oklahoma, South Carolina, and Tennessee.
With seven times the population to police, far greater resources are needed for the public to be protected. If the agency’s funding does not grow - or worse, gets cut - we would be unable to enforce new rules in the swaps market to promote transparency, lower risk and protect against another crisis. It would hamper our ability to seek out fraud, manipulation and other abuses at a time when commodity prices are rising and volatile.
Unnecessary delay in implementing the Dodd-Frank Act will increase risk to the American people and leave significant uncertainty in the marketplace. Until the CFTC completes its rule-writing process and implements and enforces those new rules, the public remains unprotected.
Thank you."

The above speech is an excerpt from the CFTC web site. Commodities fraud may be the next great area of criminal investigation. It seems that as prices for commodities fall then more light is shined upon fraudsters. The good thing about getting rid of fraudsters is that others who are honest may find it easier to profit. Fraudsters are the enemies of honest brokers. They steal away good customers by offering rates of return that no one can refuse and they make those customers bitter toward all dealers because those customers had their money stolen from them by fraudsters. In addition, fraudsters bring about regulations that in many cases would not be necessary if current regulations and laws were properly enforced. Of course these new regulations are often difficult and expensive to comply with for the honest dealer.

EPA ANNOUCEMENT ON PESTICIDES

The following is an excerpt from the EPA website:

EPA Proposes Policy on Nanoscale Materials in Pesticide Products

WASHINGTON – The U.S. Environmental Protection Agency announced today it plans to obtain information on nanoscale materials in pesticide products. Under the requirements of the law, EPA will gather information on what nanoscale materials are present in pesticide products to determine whether the registration of a pesticide may cause unreasonable adverse effects on the environment and human health. The proposed policy will be open for public comment.

“We want to obtain timely and accurate information on what nanoscale materials may be in pesticide products, “said Steve Owens assistant administrator for EPA’s Office of Chemical Safety and Pollution Prevention. “This information is needed for EPA to meet its requirement under the law to protect public health and the environment.”

A number of organizations, as well as government, academic and private sector scientists, have considered whether the small size of nanoscale materials or the unique or enhanced properties of nanoscale materials may, under specific conditions, pose new or increased hazards to humans and the environment.

EPA also recognizes that nanoscale materials have a range of potentially beneficial public and commercial applications, including pest control products. The agency will continue to encourage responsible and innovative development of products containing nanoscale materials to realize these benefits while also addressing health or environmental concerns.

The new proposed policy options will be published in the Federal Register shortly. The notice will also propose a new approach for how EPA will determine whether a nanoscale ingredient is a “new” active or inert ingredient for purposes of scientific evaluation under the pesticide laws, when an identical, non-nanoscale form of the nanoscale ingredient is already registered under FIFRA. This approach will help ensure that EPA is informed about the presence of nanoscale ingredients in pesticide products and allows a more thorough review of the potential risks."  

PATIENT RECRUITER FOR LUANT & ODERA INC. IS CONVICTED FOR FRAUD

The following is an excerpt from the Department of Justice web site:

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, May 26, 2011
Houston Federal Jury Convicts Patient Recruiter of Medicare Fraud Involving Claims of Hurricane Damage to Power Wheelchairs
To Date, Six Individuals Guilty of Federal Crimes for Roles in Scheme
WASHINGTON – Marion Beverly Metoyer, a patient recruiter for a Houston durable medical equipment (DME) company, was convicted today by a Houston federal jury of health care fraud related to a power wheelchair fraud scheme, the Departments of Justice, Health and Human Services (HHS) and the FBI announced.
After a four-day trial, Metoyer, 57, of Dayton, Texas, was convicted on one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiring to receive illegal kickbacks for referring Medicare beneficiaries, and two counts of receiving illegal kickbacks for referring Medicare beneficiaries.
According to evidence presented at trial, Helen Etinfoh was the owner and operator of Luant & Odera Inc., a Houston-area DME company doing business as Tonni Medical Equipment & Supplies. Metoyer was a recruiter for Luant who was paid kickbacks in exchange for providing the company with beneficiaries in whose names bills could be submitted to Medicare. Etinfoh and other co-conspirators submitted false and fraudulent claims to Medicare for medically unnecessary DME, including power wheelchairs, wheelchair accessories and motorized scooters.
Evidence at trial showed that, based on representations from Metoyer and other recruiters, Luant would bill Medicare under a special code that designated the power wheelchairs as replacements for wheelchairs lost during hurricanes that hit the Houston area in fall 2008. In fact, the hurricanes did not damage the wheelchairs. Certain beneficiaries testified that they did not even have a power wheelchair before receiving the ones provided to them by Luant. Luant used the hurricane code because it allowed the company to submit claims to Medicare without a doctor’s order.
At trial, beneficiaries in whose names claims were submitted to Medicare testified that recruiters whom they had never met, including Metoyer, came to their homes and offered them free power wheelchairs in exchange for their Medicare information. The power wheelchairs were often billed to Medicare at more than $6,000 per chair.
Etinfoh was previously convicted by a federal jury of health care fraud in April 2010, and was sentenced to 41 months in prison. Paula Whitfield, a patient recruiter for Luant, was also convicted by a federal jury in April 2010, and was sentenced to 21 months in prison. Melvin Barnes, Johnnie Lee Andrews and Monica Rene Perry, each a patient recruiter for Luant, pleaded guilty to conspiracy to commit health care fraud and await sentencing.
At sentencing, Metoyer faces maximum penalties of 10 years in prison for the health care fraud conspiracy; 10 years in prison for committing health care fraud; five years in prison for conspiring to receive illegal kickbacks for referring Medicare beneficiaries; and five years in prison for receiving an illegal kickback for referring a Medicare beneficiary. A sentencing date has not been set.
Today’s guilty jury verdict was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Acting Special Agent-In-Charge Russell D. Robinson of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), Office of Investigations; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case was tried by Trial Attorney Laura Cordova and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Strike Force operations in nine locations have obtained indictments of 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

SEC CHARGES UBS FINANCIAL INC. WITH RIGGING MUNI BOND TRANSACTIONS

The following is an excerpt from the SEC web site:
“May 4, 2011
The Securities and Exchange Commission today charged UBS Financial Services Inc. (UBS) with fraudulently rigging at least 100 municipal bond reinvestment transactions in 36 states and generating millions of dollars in ill-gotten gains.
To settle the SEC’s charges, UBS has agreed to pay $47.2 million that will be returned to the affected municipalities. UBS and its affiliates also agreed to pay $113 million to settle parallel charges brought by other federal and state authorities.
When investors purchase municipal securities, the municipalities generally temporarily invest the proceeds of the sales in reinvestment products before the money is used for the intended purposes. Under relevant IRS regulations, the proceeds of tax-exempt municipal securities must generally be invested at fair market value. The most common way of establishing fair market value is through a competitive bidding process in which bidding agents search for the appropriate investment vehicle for a municipality.
The SEC alleges that during 2000 to 2004, UBS’s fraudulent practices and misrepresentations undermined the competitive bidding process and affected the prices that municipalities paid for the reinvestment products being bid on by the provider of the products. Its fraudulent conduct at the time also jeopardized the tax-exempt status of billions of dollars in municipal securities because the supposed competitive bidding process that establishes the fair market value of the investment was corrupted. The business unit involved in this misconduct closed in 2008 and its employees are no longer with the company.
According to the SEC’s complaint filed in U.S. District Court for the District of New Jersey, UBS played various roles in these tainted transactions. UBS illicitly won bids as a provider of reinvestment products, and also rigged bids for the benefit of other providers while acting as a bidding agent on behalf of municipalities. UBS at times additionally facilitated the payment of improper undisclosed amounts to other bidding agents. In each instance, UBS made fraudulent
misrepresentations or omissions, thereby deceiving municipalities and their agents. As bidding agent UBS steered business through a variety of mechanisms to favored bidders acting as providers of reinvestment products. In some cases, UBS gave a favored provider information on competing bids in a practice known as “last looks.” In other instances, UBS deliberately obtained off-market ”courtesy” bids or arranged “set-ups” by obtaining purposefully non-competitive bids from others so that the favored provider would win the business. UBS also transmitted improper, undisclosed payments to favored bidding agents through interest rate swaps. In addition, UBS was favored to win bids with last looks and set-ups as a provider of reinvestment products.
Without admitting or denying the allegations in the SEC’s complaint, UBS has consented to the entry of a final judgment enjoining it from future violations of Section 15(c) of the Securities Exchange Act of 1934. UBS has agreed to pay a penalty of $32.5 million and disgorgement of $9,606,543 with prejudgment interest of $5,100,637. The settlement is subject to court approval.
In a related enforcement action, the SEC barred former UBS officer Mark Zaino from associating with any broker, dealer or investment adviser, based upon his guilty plea last year in a criminal case charging him with two counts of conspiracy and one count of wire fraud for engaging in misconduct in the competitive bidding process involving the investment of proceeds of tax-exempt municipal bonds. The Commission recognizes Zaino’s cooperation in the SEC’s investigation as well as investigations conducted by other law enforcement agencies.
This is the SEC’s second settlement with a major bank in an ongoing investigation into corruption in the municipal reinvestment industry. In December 2010, the SEC charged Banc of America Securities LLC (BAS) with securities fraud for similar conduct. In that matter, BAS agreed to pay more than $36 million in disgorgement and interest to settle the SEC’s charges, and paid an additional $101 million to other federal and state authorities for its misconduct.
The SEC’s investigation was conducted by Deputy Chief Mark R. Zehner and Assistant Municipal Securities Counsel Denise D. Colliers, who are members of the Municipal Securities and Public Pensions Unit in the Philadelphia Regional Office. The SEC’s investigation is continuing.
The SEC thanks the Antitrust Division of the Department of Justice and the Federal Bureau of Investigation for their cooperation and assistance in this matter. The SEC is bringing this enforcement action in coordination with the Department of Justice, Internal Revenue Service and 25 State Attorneys General.”