Former SEC counsel Becker says ethics officer cleared him

Former Securities and Exchange Commission General Counsel David Becker has been criticized for making decisions on how victims of Madoff’s Ponzi scheme would recover assets because his family once had investment with Madoff’s firm. However, Becker said he disclosed the possible conflict of interest to the SEC chairman as well as the regulator’s ethics officer. Both cleared him to participate in the Madoff matter.

Chinese reverse mergers a growing problem

The number of lawsuits against Chinese reverse merger companies nearly tripled since 2010, according to a study by Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research. "Securities Class Action Filings: 2011 Mid-Year Assessment," reports that 24 class action lawsuits were filed against Chinese reverse merger companies in 2011. Reverse mergers work as follows: a Chinese business is acquired by an American shell company that is publicly traded. The board then resigns, a Chinese-appointed board takes control and changes the company name. Voila: it now can issue new stock to investors, all without IPO costs and paperwork.

Whistleblower protections

Talking with some investigators who attended a qui tam conference, and one highlighted a good breakdown of protections and substantial cash rewards available to whistleblowers who provide the Securities and Exchange Commission with information relating to corporate and securities fraud.  So remember, if you have evidence that a Wall Street boy is a dirty rogue, call the SEC and help yourself to a chunk of his year end bonus.