Category: Financial Fraud

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CFPB Fires Warning Shot Over Deceptive Credit Card Interest Rate Promos

Taking aim at credit card issuers who promote offers to consumers such as “convenience checks,” deferred interest/promotional interest rate purchases and balance transfers, the Consumer Financial Protection Bureau (CFPB) released a Bulletin on September 3, 2014, putting those issuers on notice of the risk that those practices could constitute deceptive and/or abusive acts.  CFPB Director Richard … Continue Reading

Danger, Will Robinson? – The SEC’s “Robocop” Not on the Beat

In recent years, the SEC has touted a new enforcement tool known as “Robocop,” purportedly designed to detect fraud in the financial statements of public companies. Robocop’s architect, Craig Lewis, then the Director of the SEC’s Division of Economic and Risk Analysis, described the virtues of Robocop in a speech in December 2012. Last year, … Continue Reading

Directors Beware – The SEC’s High Expectations for Gatekeepers

In a recent speech, SEC Chair Mary Jo White put directors of public companies on notice of their responsibility as “essential” and “important” gatekeepers upon whom their investors and the SEC rely.  Chair White described directors as the SEC’s “partners” in preventing, detecting, and stopping violations of the federal securities laws.  She set forth a … Continue Reading

Revisiting SEC Consent Decrees in the Wake of SEC v. Citigroup

With the Second Circuit’s recent reaffirmation of the SEC’s substantial discretion in negotiating the terms of settlement—notably vacating Judge Jed Rakoff’s rejection of the proposed $285 million settlement in SEC v. Citigroup Global Markets, Inc.—eyes are turning to the decision’s immediate impact on at least one other high-stakes case:  a $602 million insider trading settlement … Continue Reading

Will Rakoff’s “Legal Error” Change SEC’s View of Settlement Admissions?

On June 4, 2014, the Second Circuit Court of Appeals vacated Judge Rakoff’s November 28, 2011 Order that had rejected the Citigroup-SEC settlement on a number of grounds, including that the SEC had allowed Citigroup to avoid admitting guilt. The Appellate Court found that Judge Rakoff abused his discretion and committed “legal error” in requiring … Continue Reading

For-Profit Colleges Receiving an Education in Government Enforcement

Reflecting a growing trend of civil enforcement actions taking aim at for-profit colleges, last month Iowa Attorney General Tom Miller reached a $7.25 million settlement with a for-profit college accused of misleading students regarding its educational programs while pressuring them to enroll. At least four federal government agencies and 22 states’ attorneys general are investigating or seeking … Continue Reading

Too Big to Fail vs. Too Big to Jail

On Monday, U.S. Attorney General Eric Holder publicly addressed mounting criticism of the DOJ’s treatment of financial institutions implicated in potential criminal misconduct:  simply put, “there is no such thing as too big to jail.”  Though Holder noted that some have suggested that the size and influence of certain financial institutions effectively renders them immune … Continue Reading
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