Corporate Criminals 8/16/15

Corporate CriminalsI’m not sure how big the crime has to be for white collar criminals to get jail time. This mockery of the law known as deferred prosecutions has to reach the tipping point some time. When corporations budget huge funds in anticipation of future criminal liability, it pretty much guarantees they’ll do it again. And again. Oh, and get tax breaks for their bad behavior as well. Anyway… here are the latest headlines from Corporate Crime Reporter:

dollar signEdward Jones Neither Admits Nor Denies, to Pay $20 Million for Overcharging Customers

An SEC investigation found that instead of offering bonds to customers at the initial offering price, Edward Jones and Stina R. Wishman took new bonds into Edward Jones’ own inventory and improperly offered them to customers at higher prices.

In other instances, Edward Jones entirely refrained from offering the bonds to its customers until after trading commenced in the secondary market, and then offered the bonds at prices higher than the initial offering prices.

The firm’s customers paid at least $4.6 million more than they should have for new bonds.  In one instance, the misconduct resulted in an adverse federal tax determination for an issuer and put it at risk of losing valuable federal tax subsidies.

Edward Jones agreed to settle the case by paying more than $20 million, which includes nearly $5.2 million in disgorgement and prejudgment interest that will be distributed to current and former customers who were overcharged for the bonds.

Wishman agreed to pay $15,000 and will be barred from working in the securities industry for at least two years.

Can you say “Slap on the wrist?

dollar signCitizens Bank to Pay $18.5 Million for Failing to Credit Full Deposit Amounts

Citizens Bank will pay $18.5 million for failing to credit consumers the full amounts of their deposited funds.

The bank kept money from deposit discrepancies when receipts did not match actual money transferred.

The CFPB investigation found that from January 1, 2008 to November 30, 2013, Citizens Bank violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on unfair and deceptive practices by failing to properly credit consumers’ checking and savings accounts. In cases where the bank’s scanner misread either the deposit slip or the checks, or if the total on the deposit slip did not equal the total of the actual checks, Citizens Bank did not take action to fix the mistake if it fell below a certain dollar amount.

Specifically, Citizens Bank failed to credit consumers the full amount of their deposits: Citizens Bank frequently did not give consumers full credit for their deposits when the amount scanned on the deposit slip was less than the amount of the checks and cash deposited. The bank credited the consumer’s account with what was read on the deposit slip, not the actual sum of money the consumer transferred into the bank.

The CFPB would be the Consumer Financial Protection Bureau, the brainchild of Senator Elizabeth Warren (D-Ma). Due to its being an agency that protects consumers against corporate malfeasance, Republicans naturally want to dismantle it.

dollar signFormer SAP Exec Pleads Guilty to FCPA Violations

A former regional director of SAP International Inc. pled guilty today to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) by participating in a scheme to bribe Panamanian officials to secure the award of government technology contracts for SAP.

Vicente Eduardo Garcia, 65, of Miami, pled guilty to a one-count information charging him with conspiracy to violate the anti-bribery provisions of the FCPA.

In late 2009, SAP sought a multi-million dollar contract to provide a Panamanian state agency with a technology upgrade package.

In connection with his guilty plea, Garcia admitted that, to secure the contract, he conspired with others, including advisors and consultants to SAP, to pay bribes to two Panamanian government officials, as well as to the agent of a third government official — with the understanding that at least a portion of the money would be transmitted to the third official.  The conspirators used sham contracts and false invoices to disguise the true nature of the bribes.

Garcia admitted that he believed paying such bribes was necessary to secure both the initial contract and additional Panamanian government contracts.

Can’t wait to see the “sentence” this guy gets.

martha stewart

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