A jury convicted Rajat Gupta, a former Goldman Sachs director, of conspiracy and three counts of securities fraud, loosely tied to the October 2011 insider trading conviction of Raj Rajaratnam, founder of the $7 billion Galleon hedge fund.
Actions taken by the Securities and Exchange Commission have resulted in an agreement by Oppenheimer Funds Inc. to pay a whopping $35 million mutual fund fraud case settlement to bond fund investors who were allegedly misled about their investments with the fund. The crux of the matter is that investment fund managers have a fiduciary responsibility to inform investors of the truth regarding investments, no matter if that truth is good or bad. In this case, the management team failed to pass along information about losses.
In 2010, federal authorities launched a securities fraud task force targeting various businesses involved in fleecing South Florida residents of their savings. A U.S. attorney estimated that investors of all kinds have lost millions of dollars in penny stock deals, market manipulation schemes and Ponzi scams.
Citigroup, Inc., was fined yet again for actions - or in this case, inactions - relating to its subprime mortgage division. This time, the fine is $3.5 million to resolve regulatory claims. Citigroup, Inc., is the third largest bank in the United States. During the time period of January 2006 through October 2007, Citigroup posted incorrect information about three different residential mortgage-backed securities - known as RMBS - on its web site. Citigroup was asked several times to correct the information, but did not do so until early May 2012, according to the Financial Industry Regulatory Authority, also known as FINRA. The costs for Citigroup's actions and inactions in dealing with the U.S. mortgage market are rising steadily. Citigroup agreed to pay $158.3 million in February 2012 because regulators accused the firm of declaring that some loans were fit for a federal insurance program, when those loans did not qualify. It must also pay its part in a $25 billion settlement between 49 states' attorneys general and mortgage lenders. Citigroup's part in this settlement is $2.2 billion.