US agency sues Corzine over failure of MF Global

FILE - In this Dec. 15, 2011 file photo, former MF Global Holdings Ltd. Chairman and Chief Executive Officer Jon Corzine testifies on Capitol Hill in Washington, before the House Financial Services Committee. Federal regulators announced Thursday, June 27, 2013, that they have accused former New Jersey Governor Jon Corzine of failing to properly manage MF Global, which misused customer funds before its 2011 collapse. (AP Photo/Susan Walsh, File)

FILE - In this Dec. 15, 2011 file photo, former MF Global Holdings Ltd. Chairman and Chief Executive Officer Jon Corzine testifies on Capitol Hill in Washington, before the House Financial Services Committee. Federal regulators announced Thursday, June 27, 2013, that they have accused former New Jersey Governor Jon Corzine of failing to properly manage MF Global, which misused customer funds before its 2011 collapse. (AP Photo/Susan Walsh, File)

WASHINGTON (AP) ? Jon Corzine once saw a boutique brokerage called MF Global as his best hope to rescale the heights of Wall Street he'd once occupied as head of Goldman Sachs.

Now, MF Global is bankrupt. And Corzine faces a lifetime ban from the futures industry.

On Thursday, federal regulators sued Corzine, a onetime U.S. senator and governor of New Jersey. They allege that he was responsible for the misuse of customer money while CEO of MF Global, which collapsed in 2011.

A civil lawsuit filed in Manhattan by the Commodity Futures Trading Commission seeks to restrict Corzine's ability to trade investments and demands he pay unspecified penalties.

The suit charges that MF Global violated U.S. laws in the weeks before it collapsed by using customer funds to support its own trading operations. About $1.2 billion in customer money vanished when the firm collapsed.

Corzine bore responsibility for the unlawful acts by MF Global because he controlled the firm and its holdings and "either did not act in good faith or knowingly induced these violations," the lawsuit says.

In a conference call with reporters, CFTC Enforcement Director David Meister said Corzine failed to do enough to "prevent the firm from dipping into customers' funds to stay afloat."

MF Global has agreed to pay a $100 million penalty as part of a settlement announced Thursday. The money will come from bankruptcy proceedings.

Corzine has disputed the allegations by the CFTC, which regulated New York-based MF Global. He did so again Thursday through his lawyers.

"Mr. Corzine did nothing wrong, and we look forward to vindicating him in court," attorney Andy Levander said in a statement.

James Giddens, the court-appointed trustee overseeing MF Global's bankruptcy, called the settlement with the CFTC "appropriate." He said the $100 million penalty will be paid only after the firm's customers and creditors have received all their claims.

The CFTC also filed civil charges against Edith O'Brien, the firm's former assistant treasurer. Last year, O'Brien was summoned to a congressional hearing into what happened in MF Global's final days. She declined to answer questions, invoking her Fifth Amendment right against self-incrimination.

Attorneys for O'Brien didn't immediately return a call seeking comment Thursday.

The lawsuit seeks to bar Corzine and O'Brien from working for any firms that trade commodities or other investments regulated by the CFTC. Corzine and O'Brien would also be barred from trading any such investments on their own. They could still trade stocks and bonds.

Thursday's lawsuit is striking in that regulators have seldom charged individuals with financial crisis-era misdeeds. They have instead imposed fines and penalties against companies, often with no one having to admit blame.

Nearly 90 percent of the money belonging to the firm's U.S. customers has been recovered. Many farmers, ranchers and business owners used futures contracts through MF Global to hedge their risks against fluctuating crop prices. A futures contract allows someone to agree with someone else to buy or sell something ? corn, say, or gold ? at a set price at some point in the future.

The CFTC need not show in court that Corzine personally authorized the use of customer money, said Anthony Sabino of the New York law firm Sabino & Sabino, which specializes in white-collar crime. Top executives can be liable for "failure to maintain internal controls" or "failure to supervise," Sabino said.

Under a 2002 anti-corporate fraud law ? which Corzine co-wrote as a U.S. senator ? CEOs of public companies must personally certify the accuracy of their company's financial statements.

"When the Titanic went down, you didn't blame the cook; you didn't blame the guy in the engine room," Sabino said. "You blamed the captain. And Corzine is the captain of the ship called MF Global."

The CFTC has "a very substantial case" against Corzine and MF Global, Sabino said.

Robert Mintz, a former federal prosecutor, predicted that Corzine and the CFTC would eventually settle but not before a drawn-out battle.

That the CFTC filed suit against such a major defendant signals confidence that they have a strong case, he suggested.

"A defeat in a case like this, in such a high-profile setting, would come at some cost to the reputation of the agency," said Mintz, now at McCarter & English in New Jersey.

It isn't clear how much money Corzine is worth. He spent roughly $100 million of his fortune to win a U.S. Senate seat and the New Jersey governorship. In 2005, the last full year that he was a U.S. senator, he was estimated to be worth between $125 million and $175 million.

MF Global sought bankruptcy protection in 2011 after a disastrous bet on European countries' debt. Under Corzine's leadership, the firm bet $6.3 billion on bonds issued by Italy, Spain and other nations with deeply troubled financial systems. Those bonds plummeted in value in the weeks before MF Global's failure as fears intensified that some European countries might default.

The firm's $41 billion bankruptcy was the eighth-largest in U.S. history. It was also the first collapse of a Wall Street firm since the 2008 financial crisis ended. Critics have long complained that regulators have failed to aggressively pursue much bigger financial firms, whose high-risk bets nearly toppled the financial system.

Corzine, 66, had been a CEO of Wall Street powerhouse Goldman Sachs before entering politics in 2000. He served as a Democratic U.S. senator from New Jersey and later governor of the state. He took the top job at MF Global in March 2010 after losing his 2009 bid for re-election as governor to Chris Christie.

MF Global was a small commodities broker when Corzine arrived. His vision was to transform the firm into a full-scale investment bank, similar to Goldman. The CFTC's lawsuit says he sought to do so by generating revenue from aggressive trading strategies.

The plan worked for a while even as the firm's investments grew increasingly risky, the lawsuit said. In the second half of 2011, its investments put heavy strains on its cash flow and capital. By October 2011, the lawsuit says, sources of cash were drying up.

Corzine and other employees communicated with one another, by email and sometimes on recorded phone lines, about the firm's "dire situation," the lawsuit says.

It says a treasurer of the firm's parent company, MF Global Holdings Ltd., told a chief financial officer and another employee in a recorded conversation on Oct. 6, 2011, that "we have to tell Jon that enough is enough. We need to take the keys away from him."

Corzine "disparagingly nicknamed the Global treasurer 'the Gravedigger,'" the lawsuit says

Corzine stepped down as MF Global chief in November 2011, a few days after the firm filed for bankruptcy protection.

Three reports on MF Global's collapse, by a House panel and two court-appointed trustees, placed most of the blame on Corzine. It said his risky strategies caused the failure.

Shareholders of MF Global have sued Corzine and other top managers. The investors say they lost about $585 million in just a week as the firm foundered. They accuse MF Global and the executives of making false and misleading statements about the firm's financial strength.

Giddens, the trustee, also joined a lawsuit filed by MF Global customers against Corzine and the other top executives.

Corzine testified at three hearings of House and Senate committees in December 2011 after lawmakers subpoenaed him. It was a rare sight in Washington: A former member of Congress being called by former colleagues to testify publicly about potential violations of law.

Corzine's testimony offered little to satisfy lawmakers or MF Global customers who lost money. Yet his explanations would be hard to disprove, legal experts said.

He said he never intended to "misuse" client money or to order anyone else to do so. Corzine also rebuffed an assertion that he knew about customer money that might have been transferred to a European affiliate just before MF Global collapsed.

O'Brien, the former assistant treasurer, was subpoenaed to testify at a hearing last year about an email she sent that appeared to contradict testimony from Corzine. The email said Corzine ordered a transfer of customer money to cover an overdraft in the firm's bank account in London.

"On the advice of counsel," she told Congress, "I respectfully decline to answer based on my constitutional right."

___

Neumeister and Rexrode contributed from New York.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2013-06-27-MF%20Global-Corzine%20Lawsuit/id-e53acb888e974fe7ba7332899bc74f54

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Ex-Duane Reade execs lose bid to reverse fraud convictions

By Nate Raymond

NEW YORK (Reuters) - Two former executives at Duane Reade Inc on Wednesday lost a bid to have a U.S. appeals court reverse their 2010 securities fraud convictions for inflating earnings at the New York drugstore chain.

The 2nd U.S. Circuit Court of Appeals in New York affirmed the convictions and the sentences of Anthony Cuti, Duane Reade's former chief executive, and William Tennant, former chief financial officer.

In June, 2010, a federal jury in Manhattan found Cuti and Tennant guilty of engaging in a scheme to inflate Duane Reade's earnings from 2000 to 2004.

Prosecutors said the scheme resulted in misleading information being provided to shareholders and private equity firm Oak Hill Capital Partners, which bought Duane Reade in 2004.

Oak Hill sold Duane Reade in 2010 to Walgreen Co for $614 million.

Cuti was found guilty of conspiracy to commit securities fraud, securities fraud and making false statements to the U.S. Securities and Exchange Commission, among other things. He was sentenced in August 2011 to three years in prison and fined $5 million.

Tennant, who was convicted of securities fraud, was sentenced to time served and fined $10,000.

On appeal, Cuti argued that U.S. District Judge Deborah Batts should not have allowed two witnesses he claimed were not experts to offer expert testimony.

The lead partner from auditor PricewaterhouseCoopers and John Henry, Tennant's successor as Duane Reade CFO, answered hypothetical questions about how they would have accounted for various fraudulent real estate sales.

U.S. Circuit Judge John Walker, writing for a three-judge panel, said the questions were permissible because they were limited to established facts.

"These limitations left little room for the witnesses to engage in speculation," Walker wrote.

The appeals court also rejected Tennant's contention that prosecutors did not present enough evidence to show he knew a fraud was taking place. It issued a separate order dispensing with other arguments by the defendants.

Brian Brook, a lawyer for Cuti, said he was "surprised and disappointed" by the decision, he still believes Cuti "was denied a fair trial" and will be considering options.

John Kenney, a lawyer for Tennant, said he was disappointed in the ruling and would consider a further appeal.

Cuti, who is currently in a half-way house, is separately appealing an order by Batts in May requiring him to pay $7.62 million in restitution to Duane Reade and Oak Hill.

The case is U.S. v. Cuti, 2nd U.S. Circuit Court of Appeals, No. 11-3756.

(In 13th paragraph, corrects spelling of last name for lawyer to Brian Brook)

Source: http://news.yahoo.com/ex-duane-reade-execs-lose-bid-reverse-fraud-214749867.html

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Paula Deen On ?Today? Show (VIDEO): Anyone Else Sick Of Social Media Lynch Mobs?

Paula Deen On “Today” Show (VIDEO): Anyone Else Sick Of Social Media Lynch Mobs?

Popular southern chef Paula Deen appeared on the “Today” show, looking a little tired and emotional, following the controversy over her uttering the N-word (which obviously everyone can say if they are not white). Deen is being punished in the media for being honest about uttering the racial slur, which resulted in losing her Food ...

Paula Deen On “Today” Show (VIDEO): Anyone Else Sick Of Social Media Lynch Mobs? Stupid Celebrities Gossip Stupid Celebrities Gossip News

Source: http://stupidcelebrities.net/2013/06/paula-deen-on-today-show-video-anyone-else-sick-of-social-media-lynch-mobs/

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A 700,000-year-old horse gets its genome sequenced

June 26, 2013 ? It is nothing short of a world record in DNA research that scientists at the Centre for GeoGenetics at the Natural History Museum of Denmark (University of Copenhagen) have hit. They have sequenced the so far oldest genome from a prehistoric creature. They have done so by sequencing and analyzing short pieces of DNA molecules preserved in bone-remnants from a horse that had been kept frozen for the last 700,000 years in the permafrost of Yukon, Canada. By tracking the genomic changes that transformed prehistoric wild horses into domestic breeds, the researchers have revealed the genetic make-up of modern horses with unprecedented details.

The spectacular results are now published in the international scientific journal Nature.

DNA molecules can survive in fossils well after an organism dies. Not as whole chromosomes, but as short pieces that could be assembled back together, like a puzzle. Sometimes enough molecules survive so that the full genome sequence of extinct species could be resurrected and over the last years, the full genome sequence of a few ancient humans and archaic hominins has been characterized. But so far, none dated back to before 70,000 years.

Now Dr. Ludovic Orlando and Professor Eske Willerslev from the Centre for GeoGenetics have beaten this DNA-record by about 10 times. Thereby the two researchers -- in collaboration with Danish and international colleagues -- have been able to track major genomic changes over the last 700.000 years of evolution of the horse lineage.

First, by comparing the genome in the 700,000 year old horse with the genome of a 43,000 year old horse, six present day horses and the donkey the researchers could estimate how fast mutations accumulate through time and calibrate a genome-wide mutation rate. This revealed that the last common ancestor of all modern equids was living about 4.0-4.5 million years ago. Therefore, the evolutionary radiation underlying the origin of horses, donkeys and zebras reaches back in time twice as long as previously thought. Additionally, this new clock revealed multiple episodes of severe demographic fluctuation in horse history, in phase with major climatic changes such as the Last Glacial Maximum, some 20,000 years ago.

The world's only wild horse

The results also put an happy end to a long discussion about the so-called Przewalski's Horse from the Mongolian steppes. This horse population was discovered by the Western world in the second half of the nineteenth century and rapidly became threatened. It almost became extinct in the wild by the 1970s but has survived until now following massive conservation efforts. The evolutionary origin of this horse, that shows striking physical differences compared to domesticated horses, as well as an extra-pair of chromosomes, remained a mystery.

The researchers reveal now that the Przewalski's horse population became isolated from the lineage leading to the present day domesticated horses about 50,000 years ago. As the scientists could detect similar levels of genetic diversity within the Przewalski's Horse genome than in the genomes of several domestic breeds, this suggests that the Przewalski's Horses are likely genetically viable and therefore worthy of conservation efforts.

True Single DNA Molecule Sequencing

The geological context and dating information available was very strong and was built on about ten years of field work. Additionally, cold conditions, such as those from the Arctic permafrost, are known to be favourable for DNA preservation. But even so:

"Sequencing the first genome from the Middle Pleistocene was by no means straightforward," says Dr Ludovic Orlando who, together with his team, spent the most of the last three years on this project.

The researchers first got excited when they detected the signature of those amino-acids that are most abundant in the collagen as this could indicate that proteins had survived in situ. They even got more excited when they succeeding in directly sequencing collagen peptides. When they detected blood proteins, it really started looking promising because those are barely preserved. At that stage, it could well be that ancient DNA could also be preserved.

And indeed DNA was present. In tiny amount as the vast majority of sequences generated actually originated from environmental micro-organisms living in the bone. But with Helicos true Single DNA Molecule Sequencing, the researchers managed to identify molecular preservation niches in the bone and experimental conditions that enabled finishing the full genome sequence.

"This was methodologically challenging but clearly some parameters worked better than others, says Professor Eske Willerslev. But sequencing was just half the way really." Professor Willerslev continues: "Because 700,000 years of evolution and damage, it is not something that does come without any modification to the DNA sequence itself. We had to improve our ability to identify modified and divergent ancient horse sequences by aligning them to the genome of present day horses. Quite a computational challenge, especially when the level of DNA modification outcompasses that seen in any other Arctic horses from the Late Pleistocene."

Dr. Orlando explains: "Levels of base modifications were extremely high, for some regions even so high that every single cytosine was actually damaged. This, and the phylogenetic position of the ancient horse outside the diversity of any horse ever sequenced, provided clear evidence that the data was real."

Professor Willerslev adds: "The results of the studies and the applied techniques open up new doors for the exploration of prehistoric living creatures. Now with genomics and proteomics, we can reach ten times further back in time compared to before. And new knowledge about the horse's evolutionary history has been added -- a history which is considered as a classical example in evolutionary biology and a topic which is taught in high schools and universities."

Source: http://feeds.sciencedaily.com/~r/sciencedaily/top_news/top_science/~3/YTQsffF2E0Y/130626142938.htm

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Help for African rhino poaching survivors

June 21, 2013 ? In Africa hundreds of rhinos are shot or immobilised by poachers every year to supply ground up horn for the Asian medicine market. It is reputed to make men virile and treat anything from stomach ache to cancer -- all just a myth.

South Africa has more rhinos than most other African countries because conservation and breeding have been more successful there. Consequently it has become a major target of the poaching syndicates and many of the rhinos are slaughtered and maimed. Their horns are hacked off -- usually while still alive, leaving the injured animals to die.

Many of these rhinos are too badly maimed to survive but a group of vets has taken on the often heart-breaking task of trying to rescue and treat the animals that are not killed. Although many do not charge for this, the costs of immobilising, testing and treating these animals is still enormous requiring helicopters and trucks as well as large quantities of expensive drugs.

Thousands of miles away from this rhino bloodbath veterinary pathologist Professor Fred Reyers, from the School of Life Sciences, University of Lincoln (UK), has been interpreting laboratory blood analysis data, sent to him electronically, to guide the vets who are treating the badly injured survivors.

He said: "Poachers use two approaches: shooting the rhino, with the intention of killing which requires marksmanship and a heavy calibre rifle. Many rhino are just stunned and/or wounded sufficiently to make it possible to saw or hack the horn off. They often have serious shrapnel injuries which tend to become infected and, if left lying on one side for several hours, are disposed to muscles on the lower side dying off because the sheer mass of the animal prevents blood flow. The second approach is the use of an immobilising dart gun -- however the poacher does not give an antidote.

"The septic bullet tracts, septic horn-removal lesions and dying muscles all contribute to sepsis and this can lead to secondary damage to vital organs, like the kidney, lung and liver. These syndromes are well recognised in car crash victims, explosion injuries, battlefield wounded and burn patients. The actual lesions are almost impossible to assess accurately from the outside. So, to get an idea of how serious and/or advanced these injuries are and the resulting problems, we rely on measuring a number of blood parameters that reveal the extent and stage of inflammation and organ failure. Based on the interpretation of these blood tests, the attending veterinarian can adjust the treatment protocol."

Prof Reyers works closely with South Africa's top rhino vet Dr William Fowlds, trustee for Chipembere Rhino Foundation in South Africa.

Dr Fowlds travels all over South Africa attending to the rhino who have survived a poaching attack and helping other wildlife vets manage these cases.

He said: "This year alone South Africa has lost more than 2.5 rhino per day. Most of the poaching occurs in the northern Kruger National Park, a park the size of Israel. The park borders on Mozambique and there is a deluge of poachers crossing the river to get to the rhino. Trained rangers put their lives at risk, for very little salary.

"I count myself truly blessed to be able to live my dream as a wildlife vet in a part of Africa that satisfies my senses and fills my soul. One of my many privileges is that I get to work with rhino in the wild. These living dinosaurs are truly iconic symbols of our successes and failures as custodians of this planet. The current rhino situation is a dying testimony of our conservation efforts."

Dr Fowlds will be giving a talk at the Royal Geographical Society in London on Wednesday, 18th September. Entitled "The Changing Face of the Rhino," Dr Fowlds will be supported by Bear Grylls and Virginia McKenna OBE of Born Free Foundation.?

Source: http://feeds.sciencedaily.com/~r/sciencedaily/~3/WbGZEUB92lU/130621095510.htm

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RadioShack bundling $100 Google Play store credit with HTC One purchases

Loyal Engadget readers know that we don't normally trouble ourselves with promotions, but this one is too wild to ignore. Until June 30th, RadioShack is offering the HTC One to AT&T and Sprint customers with an added bonus -- a $100 credit for the Google Play store. Should you elect to sign up with Sprint, you'll basically get away like a bandit since RadioShack has slashed the price of the handset to $79.99 for new activations -- on two-year contracts, of course. After all is said and done, you would basically leave $20 richer than when you started (sort of). So, if you've been lusting after the HTC One but have held off on buying it, the universe might be trying to tell you something.

Filed under: Cellphones, Mobile, HTC, Sprint, AT&T

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Source: http://www.engadget.com/2013/06/21/radio-shack-htc-one-google-play-credit/?utm_medium=feed&utm_source=Feed_Classic&utm_campaign=Engadget

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