Whistleblower News From The Inside -- December 20, 2016
By the C|C Whistleblower Lawyer Team
Platinum hedge fund executives charged with $1 billion fraud — For years, the little-known New York hedge fund Platinum Partners stood out for double-digit investment returns that rivaled some of the biggest names in the industry. It turned out that those returns were too good to be true. Federal agents on Monday arrested Mark Nordlicht, a founder and the chief investment officer of Platinum, and six others on charges related to a $1 billion fraud that led the firm to be operated “like a Ponzi scheme,” in one of the largest such fraud cases since Bernard L. Madoff’s investment firm unraveled in 2008. NYT
Company violated rule aimed at protecting potential whistleblowers — The SEC found that Virginia-based NeuStar Inc. violated a whistleblower protection rule in the federal securities laws by routinely entering into severance agreements that contained a broad non-disparagement clause forbidding former employees from engaging with the SEC and other regulators “in any communication that disparages, denigrates, maligns or impugns” the company. Former employees could be compelled to forfeit all but $100 of their severance pay for breaching the clause and were used with at least 246 departing employees. SEC
Morgan Stanley to pay $7.5 million over customer protection violations — Morgan Stanley will pay $7.5 million to settle civil charges that it violated customer protection rules when it used trades involving customer cash to lower its borrowing costs. According to the SEC, Morgan Stanley’s U.S. brokerage arm from March 2013 through May 2015 improperly used transactions with another affiliate to reduce the amount it was required to deposit in its customer account reserve. Reuters
Michigan AG brings more criminal charges over water crisis — Michigan’s Attorney General announced criminal charges Tuesday against two former state-appointed emergency managers of Flint for their alleged role in the city’s lead-tainted water crisis, as well as two former city officials who worked at the city’s water-treatment plant. The AG said the latest charges indicate that investigators weren’t afraid to pursue officials at any level of government who bore responsibility for the water crisis. WSJ
Russian ‘methbot’ fraud steals $180 million in online ads — Methbot, so nicknamed because the fake browser refers to itself as the “methbrowser,” operates as a sham intermediary advertising ring: Companies would pay millions to run expensive video ads and then deliver those ads to what appeared to be major websites. In reality, criminals had created more than 250,000 counterfeit web pages no real person was visiting, making up to $5 million per day by generating up to 300 million fake “video impressions” daily. CNN