Authorities charge Swiss banker, attorney in tax probe

By Joseph Ax

NEW YORK | Tue Apr 16, 2013 9:26pm EDT

NEW YORK (Reuters) – Authorities on Tuesday charged a Swiss banker and a Swiss attorney with helping American clients hide millions of dollars in offshore accounts to evade paying taxes.

The case is the latest in a string of prosecutions from the Justice Department aimed at curtailing offshore tax evasion services sold by Swiss and Swiss-style banks.

Stefan Buck and Edgar Paltzer were each charged with one count of conspiracy, an indictment filed in Manhattan federal court showed. It did not name the defendants’ employers.

Buck is the head of private banking and a member of the executive board at “Swiss Bank No. 1,” while Paltzer is a partner at a “Swiss Law Firm” and was admitted to the New York bar in 1988, according to the indictment.

Zurich-based Bank Frey lists Stefan Buck as its head of private banking and a member of its executive board on its website.

The Swiss law firm Niederer Kraft & Frey lists Edgar Paltzer as a partner on its website, and New York state records show he was admitted to the New York bar in 1988.

Attempts to reach Bank Frey and Niederer Kraft & Frey for comment were unsuccessful outside of regular Swiss business hours.

In March 2009, Swiss bank UBS AG (UBSN.VX) agreed to pay $ 780 million to settle charges brought by the Justice Department. The oldest Swiss bank, Wegelin & Co, pleaded guilty in January to helping wealthy Americans evade taxes and was sentenced to pay nearly $ 58 million in penalties.

According to the Manhattan U.S. Attorney’s office, which brought the charges, Buck’s bank saw an increase of 300 percent in U.S. taxpayers as clients between the time of UBS’s settlement and Wegelin’s indictment in February 2012.

Around $ 938 million, or 44 percent, of the bank’s $ 2.1 billion in managed assets as of September 2012 was held by U.S. taxpayers, prosecutors said.

Buck and Paltzer opened and managed undeclared accounts for U.S. clients who had been informed by other Swiss banks that they had to close their accounts there.

Both men reside in Switzerland, and neither has been arrested, prosecutors said.

Paltzer, a dual U.S.-Swiss citizen, is admitted to practice law in New York, authorities said.

The defendants each face fines and a maximum prison sentence of five years.

The case is U.S.A. v Paltzer and Buck, U.S. District Court for the Southern District of New York, No. 13-282.

(Reporting by Joseph Ax; Editing by Ryan Woo)

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Reuters: Business News

Authorities charge Swiss banker, attorney in tax probe

Cyprus bank probe to cover Popular, c.bank says

NICOSIA, April 8 | Mon Apr 8, 2013 3:30am EDT

NICOSIA, April 8 (Reuters) – Cyprus’s Central Bank said on Monday it would extend an inquiry into the banking crisis that has crippled the island to fully cover Cyprus Popular Bank , nationalised last year after heavy exposure to Greece.

A central bank-commissioned probe leaked last week showed the island’s largest bank, Bank of Cyprus, failed to provide regulators with timely information about its exposure to Greek sovereign debt which saddled the bank with huge losses.

The inquiry would now move on to Popular, Central Bank governor Panicos Demetriades said.

“It is expected to be completed in the next few months,” Demetriades told lawmakers in parliament.

Under a 10 billion euro bailout deal, Cyprus will wind down Popular, with some of its assets transferred to Bank of Cyprus. Bank of Cyprus will also slap depositors with heavy losses to pay for its own recapitalisation needs.

Demetriades said a clear picture of Bank of Cyprus’s requirements would be known by the end of June.

The first instalment of the investigation, by consultants Alvarez and Marsal, drew criticism that it did not focus on the role of Popular in the crisis, which was kept on a funding lifeline for months as Cyprus attempted to negotiate terms of a bailout.

When the European Central Bank threatened to pull its aid to Popular, Cyprus buckled and agreed to accept tough bailout terms.

The inquiry would focus on the purchase of Greek bonds and expansion strategies pursued by Popular in previous years, Demetriades said.

In Bank of Cyprus’s case, the inquiry was focused on the circumstances leading to its heavy, loss-making exposure to Greek government bonds.

The consultants also said they had discovered evidence of a “mass deletion of data” on one computer and “unnecessary delays” in getting information from the bank.

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Reuters: Bonds News

Cyprus bank probe to cover Popular, c.bank says

Wal-Mart expects to incur losses related to overseas bribery probe

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• Investing and Taxes Simplified »







Two people walk outside a Wal-Mart store in Mexico City January 11, 2013.


Credit: Reuters/Edgard Garrido








Tue Mar 26, 2013 8:57pm EDT





(Reuters) – Wal-Mart Stores Inc (WMT.N) said in a regulatory filing on Tuesday that is now “probable” it will incur losses related to allegations that company representatives had bribed officials in Mexico to speed up expansion there.




Wal-Mart said in its annual report, filed with the U.S. Securities and Exchange Commission, that it could not estimate how much any loss would come to because of the complexity of the related probes and internal review, but that it would not have a material effect on its business.




The bribery allegations surfaced in a New York Times report last year that said the company had intentionally stifled an early internal probe into claims that Wal-Mart de Mexico officials had paid bribes years earlier to help build stores there.




The matter cost Wal-Mart $ 157 million in the fiscal year that ended January 31 and the tally will rise, the retailer said.




“We expect to continue to incur costs … in conducting our on-going review and investigations,” Wal-Mart said. As of three months earlier, the costs had come to $ 99 million.




Last year, Wal-Mart made a profit of $ 17 billion on sales of $ 469 billion.




(Reporting by Phil Wahba in New York; Editing by Edmund Klamann)



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Reuters: Business News

Wal-Mart expects to incur losses related to overseas bribery probe

Three more charged in insider trading probe

NEW YORK | Tue Mar 26, 2013 2:59pm EDT

NEW YORK (Reuters) – Federal authorities on Tuesday announced criminal charges against three new defendants in the government’s broad-based insider trading probe.

The U.S. Attorney in Manhattan said former Foundry Networks executive David Riley leaked tips about the company to Matthew Teeple, an analyst for an investment advisory firm to a family of hedge funds in San Francisco, and Teeple then passed the information to others who traded on it.

These trades resulted in more than $ 27 million in profits and avoided losses, prosecutors said.

Prosecutors also said a co-defendant, John Johnson, has pleaded guilty to related charges.

All three defendants were also charged by the U.S. Securities and Exchange Commission in separate civil proceedings.

(Reporting By Bernard Vaughan; Editing by Gerald E. McCormick)

Reuters: Business News

Three more charged in insider trading probe

SAC Capital up 4 percent this year as probe continues

Hedge fund manager Steven A. Cohen, founder and chairman of SAC Capital Advisors, responds to a question during a one-on-one interview session at the SkyBridge Alternatives (SALT) Conference in Las Vegas, Nevada May 11, 2011.

Credit: Reuters/Steve Marcus

By Svea Herbst-Bayliss and Katya Wachtel

BOSTON/NEW YORK | Wed Mar 20, 2013 2:12pm EDT

BOSTON/NEW YORK (Reuters) – Hedge fund titan Steven A. Cohen’s SAC Capital Advisors has gained about 4 percent this year, beating the industry average at a time the $ 15 billion fund is still very much in federal investigators’ crosshairs.

An investor with the Stamford, Connecticut-based fund said the firm’s flagship portfolio had risen about 4 percent through early March. Another person familiar with SAC Capital’s performance confirmed the 4 percent figure.

While SAC Capital is beating the average hedge fund return of 3.22 percent this year, the firm that specializes in stock trading is lagging behind the 9.11 percent gain in the Standard & Poor’s 500 Index. Over SAC Capital’s 20-year life, the fund has returned an average 25 percent a year; it often does best when markets are falling.

As of the end of February, SAC Capital was up 3.4 percent for the year after taking out fees, said a person familiar with the firm. SAC Capital, which does not publicly release its performance figures, charges some of the highest fees in the hedge fund industry.

For SAC Capital, the better than average performance comes at a time Cohen has been dealing with the fallout from a long-running investigation into allegations of insider trading at the firm that has led to the firm paying one of the largest penalties on record to the U.S. Securities and Exchange Commission.

On Friday, SAC Capital agreed to pay $ 616 million to settle civil fraud charges of trading in four stocks with the help of illegally obtained information, in what regulators called the largest-ever insider trading settlement.

But both the government and the firm have warned that the investigation is not over yet and more charges could be filed. Federal investigators are also examining other allegations of improper trading by SAC Capital in shares of Weight Watchers International Inc (WTW.N) and InterMune Inc(ITMN.O), Reuters reported in December.

Prosecutors also are nearing a decision on whether to pursue criminal charges against Michael Steinberg, a longtime portfolio manager at SAC who was suspended from his post in October last year. Steinberg has not been charged with a crime but was named as an unindicted co-conspirator in a criminal prosecution of two convicted hedge fund traders who had traded Dell (DELL.O) shares.

Steinberg, one of Cohen’s longest tenured traders and whose wedding the SAC founder attended, has been moving between several hotels in New York City in recent weeks, according to people familiar with the situation. In the event he is indicted, Steinberg wants to avoid being arrested at his Upper East Side home where he lives with his wife and two children, the people said.

Steinberg’s hotel stays were first reported by the New York Post.

Barry Berke, a lawyer for Steinberg, has said his client “did absolutely nothing wrong.”

To date, nine former employees of SAC Capital have been either charged or implicated with wrongful trading while working at the hedge fund. The firm employs about 900 people.

Cohen, one of the most successful managers in the $ 2.25 trillion hedge fund industry, with a reported net worth of $ 9.3 billion, has not been charged or accused of any wrongdoing.

(Reporting by Svea Herbst-Bayliss and Katya Wachtel; editing by Matthew Goldstein and Phil Berlowitz)

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Reuters: Business News

SAC Capital up 4 percent this year as probe continues

Safety board says will issue report on Boeing 787 probe Thursday

Damaged batteries are seen on a screen during a news conference on an investigation into the January 7 fire that occurred on a Japan Airlines Boeing 787 at Logan International Airport in Boston, in Washington February 7, 2013.

Credit: Reuters/Yuri Gripas

Reuters: Business News

Safety board says will issue report on Boeing 787 probe Thursday

Goldman Implicated In Heinz Insider Trading Probe

When the news broke of the SEC’s action against the HNZ call option insider traders, and we posted the full SEC charge against the perpetrators whose actions Zero Hedge reported on first, we asked this regarding one of the entities named: “the trade occurred through an “omnibus account located in Zurich, Switzerland in the name of GS Bank IC Buy Open List Options GS & Co c/o Zurich Office (the “GS Account”).” Does GS stand for Goldman Sachs one wonders?” This followed our prior post, rhetorically titled “Guess Who Was Buying HNZ Stock From Its Clients“, with the answer of course being Goldman Sachs, which had had HNZ stock at a Sell rating for months, and which just days before reiterated its negative sentiment. But for the most part the post was written in jest. Turns out the joke was on everyone else, because just as we feared, or rather knew, Goldman was indeed implicated all along.

From Reuters:

Goldman Sachs Group Inc is cooperating with a U.S. Securities and Exchange Commission probe into insider options trading in H.J. Heinz Co before the food company announced it was being acquired, Goldman said on Friday.

 

Earlier in the day, the SEC filed suit against unknown traders using an account in Switzerland to buy options in Heinz before the company was purchased. The SEC suit does not explicitly name Goldman Sachs but refers to the account in Switzerland as the “GS Account.”

While none of this is surprising, we do find it curious that from “Vampire Squid”, Goldman Sachs has now metastasized into “he who must not be named.”

Zero Hedge

Goldman Implicated In Heinz Insider Trading Probe