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SEC: ‘ Announces Charges Against Houston-Based Penny Stock Company Behind the Pump- and-Dump Scheme Misleading Investors on Environmentally Friendly Oil-Gas Production ‘


#AceFinanceNews – UNITED STATES – August 20 – The Securities and Exchange Commission on August 15 announced charges against a Houston-based penny stock company and four individuals behind a pump-and-dump scheme that misled investors to believe the company was on the brink of developing revolutionary technology to enable environmentally friendly oil-and-gas production.


The SEC alleges that Andrew I. Farmer orchestrated the scheme by creating a shell company called Chimera Energy, secretly obtaining control of all shares issued in an initial public offering (IPO) in late 2011, and launching an aggressive promotional campaign midway through 2012 to hype the stock to investors.

Chimera Energy issued around three dozen press releases in a two-month period about its supposed licensing and development of technology to extract shale oil without the perceived environmental impact of hydraulic fracturing known as fracking.


​However, Chimera Energy did not actually license or even possess the technology it touted and had not achieved the claimed results in commercially developing it. While the stock was being pumped by the false claims, entities controlled by Farmer dumped more than 6 million shares on the public markets for illicit proceeds of more than $4.5 million.

The SEC suspended trading in Chimera Energy stock in 2012 and prevented Farmer and his associates from dumping additional shares or misleading new investors into their scheme.

In addition to Chimera Energy and Farmer, the SEC’s complaint charges a pair of figurehead CEOs installed by Farmer. The SEC alleges that Charles E. Grob Jr. and Baldemar Rios approved the misleading press releases and operated Chimera Energy at the minimum level necessary to lend the company a veneer of legitimacy while concealing Farmer’s involvement altogether. The SEC’s complaint also charges Carolyn Austin with helping Farmer profit from his scheme by dumping shares of Chimera Energy stock in the midst of the promotional efforts.

“Farmer and his accomplices secretly rigged the market for Chimera Energy stock and illegally profited by exaggerating the company’s capabilities and technology,” said David Woodcock, director of the SEC’s Fort Worth Regional Office. “They seized on fracking as a topic of public discourse and aggressively touted an entirely fictitious business to attract unwitting investors.”

According to the SEC’s complaint filed in federal court in Houston, Farmer obtained control of all 5 million shares of Chimera Energy stock issued in the IPO by disguising his ownership through the use of nominee shareholders.

Farmer’s name and the nature of his control over the company were not disclosed to investors in any of Chimera Energy’s public filings. Following the IPO, Farmer directed the press release barrage along with an Internet advertising campaign designed to increase investor awareness of Chimera Energy’s claims.

The initial press release issued by the company on July 30, 2012, sported the headline: CHMR Unveils Breakthrough Shale Oil Extraction Method to Safely and Effectively Replace Hydraulic Fracturing.

The SEC alleges that Chimera Energy disclosed in public filings that an entity named China Inland had granted the company an “exclusive license to develop and commercialize cutting edge technologies related to Non-Hydraulic Extraction.”

The technology that China Inland purportedly licensed to Chimera Energy was described as an “environmentally friendly oil & gas extraction procedure for shale to replace hydraulic fracturing.”

The SEC’s investigation found that the purported acquisition of a license to develop such technology and the license agreement itself are entirely fictitious.

No legitimate entity known as China Inland even exists.

The SEC’s complaint charges Chimera Energy, Farmer, Grob, Rios, and Austin with securities fraud, registration violations, and reporting violations. The SEC seeks permanent injunctions, disgorgement with prejudgment interest and financial penalties, penny stock bars, and officer-and-director bars.

The SEC’s investigation, which is continuing, has been conducted by Nikolay Vydashenko and Eric Werner in the Fort Worth Regional Office. The SEC’s litigation will be led by Matthew Gulde and Mr. Vydashenko.

The SEC appreciates the assistance of the Financial Industry Regulatory Authority.

#AFN2014

NEW YORK: ‘ Unsecured Creditors of Lehman Brothers Holdings Brokerage Unit Will Receive $4.62 Billion Pay-Out Next Month After Five Years of Waiting ‘


#AceFinanceNews – UNITED STATES (New York) – August 15 – Unsecured creditors of Lehman Brothers Holdings’ brokerage unit who have waited nearly five years to recoup their money will begin receiving an initial $4.62 billion payout next month, the trustee liquidating the unit said Friday.


​Trustee James Giddens said distributions would begin on Sept. 10 and cover 17 percent of the $27.2 billion of unsecured claims associated with the Lehman Brothers unit.

About $3.47 billion will go to creditors whose claims have been deemed valid, and $1.15 billion will be set aside for pending claims.

The payout follows distributions of $105 billion to 111,000 former customers, who have been paid in full, and other creditors whose claims had higher priority.

In a statement, Giddens said a payout to unsecured creditors had been "far from certain" when the brokerage liquidation began soon after Lehman went bankrupt on Sept. 15, 2008. More payments to unsecured creditors are expected, he said.

Giddens’ recovery efforts suffered a setback on Aug. 5 when a federal appeals court said Barclays Plc was entitled to retain $5.9 billion in disputed assets as part of its hurried purchase of much of Lehman’s brokerage unit.

Lehman was Wall Street’s fourth-largest investment bank before seeking Chapter 11 protection.

It reported $639 billion of assets, in what remains the largest U.S. bankruptcy.

By Reuters with Contributions CNBC

#AFN2014

UNITED STATES: ‘ Supreme Court in New York Rules Northern Rock Asset Management (NRAM) Can Sue Societe Generale for Allegedly Mis-Selling Financial Products ‘


#AceFinanceNews – UNITED STATES (New York) – August 14 – The Government has been told it can sue French banking giant Societe Generale for allegedly mis-selling financial products to Northern Rock that were partly to blame for UK lender’s collapse.

​A court in New York has ruled that Northern Rock Asset Management (NRAM), the UK taxpayer-owned institution salvaged from the ashes of the collapsed bank, should be allowed to take legal action against SocGen for mis-selling $34m of mortgage products in the run-up to the financial crisis, in a case which is expected to pave the way for a flurry of similar lawsuits.

SocGen has tried to have the case thrown out of court on the grounds that it warned Northern Rock in its small print that it could not be held accountable for many of the statements in its marketing material.

However, the New York Supreme Court has ruled that there was "no precedent for allowing an offerer of securities to use such a mechanic to amble away from liability for key misrepresentations".


​The products, which included collateralised debt obligations, were one of the factors which triggered Northern Rock’s implosion in 2007, and the start of the financial crisis in Britain.

Debt Obligations on PDF at this link

#AFN2014

UNITED STATES: ‘ Treasury Department Auctioned $24 Billion 10-Year Notes Amongst the Volatility of High Yield Bond Market ‘


#AceFinanceNews – UNITED STATES (Washington) – August 13 – The Treasury Department auctioned $24 billion in 10-year notes at a high yield of 2.439 percent. The bid-to-cover ratio, an indicator of demand, was 2.83.

Symbol Price Change %Change
US 3-MO 0.0355 0.006 0%
US 1-YR 0.0834 -0.011 0%
US 2-YR 0.4159 -0.02 0%
US 5-YR 1.5789 -0.036 0%
US 10-YR 2.4148 -0.027 0%
US 30-YR 3.2408 -0.026 0%

Treasury’s extended earlier gains on Wednesday after the government’s auction of 10-year notes, the second-set of this week’s $67 billion in U.S. debt supply.

The Treasury Department auctioned $24 billion in 10-year notes at a high yield of 2.439 percent, the lowest since June 2013. The bid-to-cover ratio, an indicator of demand, was 2.83, versus a recent average of 2.69.

By CNBC Staff With Reuters

#AFN2014

BRUSSELS: ‘ Anti-Fraud Office (OLAF) Steps Up Crack-Down on Cross-Border Smuggling of Tobacco to Avoid Taxation ‘


#AceFinanceNews – BRUSSELS – August 12 – Spain and British-run Gibraltar have been told to crack down on cross-border tobacco smuggling by the EU’s anti-fraud watchdog.

​The recommendation by the European Union anti-fraud office (Olaf) follows a year-long investigation conducted after a request from Spain.

In its report, which will not be made public, Olaf said that there had been "a significant increase in the size of the Gibraltar market for cigarettes over the past four years" and that there were “indications of the involvement of organised crime".

Olaf called on Spain and Gibraltar, which is classified as a British overseas territory, to "initiate judicial proceedings".

“As Olaf can carry out only administrative investigations, it is for those authorities to decide what further actions may be necessary," it said in a statement on Monday (11 August).

The investigation was requested by Madrid following a long-running dispute with Britain about border controls in Gibraltar.

The Spanish government stepped up its border operations last year, introducing random spot-checks, claiming that the extra surveillance was needed to combat rising levels of tobacco smuggling.

Cigarettes are around 40 percent cheaper on the British "Rock" than in Spain.

More than 139 million smuggled cigarettes from Gibraltar were seized by Spanish authorities in 2012.

Cross-border checks are now on the increase as UK has stepped up surveillance on vehicles.

#AFN2014

UNITED STATES: ‘ US Stocks Jump As Tensions in Russian-Ukraine Crisis With End of Military Exercises Near Ukrainian Border ‘


#AceFinanceNews – UNITED STATES – August 08 – U.S. stocks jumped on Friday, with benchmark indexes turning higher for the week, on signals of reduced tensions in the Russian-Ukraine crisis and as Wall Street viewed American military moves in Iraq as limited.

Reuters, citing Russia’s Interfax, reported that Russia had ended military exercises near the Ukrainian border.

The war games, which began Monday, were scheduled to end Friday, according to media reports including the Guardian.

"This is a good excuse to work off an oversold condition," said Peter Boockvar, chief market analyst at the Lindsey Group, who questioned whether the development truly shed any light on Russian President Vladimir Putin’s intentions.

#AFN2014

MOSCOW: ‘ Share Markets Rise As Stocks React to Russian Food Producers ‘


#AceFinanceNews – RUSSIA (Moscow) – August 08 – Markets react and stocks rise in certain Russian Food Producers.

Published time: August 08, 2014 09:45

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RIA Novosti/Alexey Kudenko

RIA Novosti/Alexey Kudenko

Tags

EU, Markets, Russia and the global economy, Sanctions

Shares in some of Russian food producers have added almost 40 percent by midday on Friday. The surge comes a day after Moscow imposed a one-year ban on imports of food products from the West.

Shares in one of Russia’s biggest agricultural holdings Razgulay shot up 39.87 percent by Friday afternoon, according to Moscow Stock Exchange data.

Stocks in the Russian Sea fish and Seafood producer surged 34.85 percent, GlavTorgProduct stocks also rose 35 percent.

Meat manufacturer Cherkizovo saw an 8.25 percent rise, the Ostankino meat processing plant had an 18.5 percent boost.

This increase has far outpaced the overall dynamics of Russia’s key indices, the RTS and MICEX, which were up 0.92 percent and 0.38 percent respectively.

On Thursday Russian Prime Minister Dmitry Medvedev signed a decree banning all imports of beef, pork, poultry meat, fish, cheese, milk, vegetables and fruit from Australia, Canada, the EU, the US and Norway.

READ MORE: Russia bans agricultural products from EU, USA, Australia, Norway, Canada

Russian farmers were mostly inspired by the decision, calling it a unique and historic opportunity to develop domestic production.

The value of Russian agricultural product production could grow by about $10.8 billion in the next 18 months, Agriculture Minister Nikolay Fyodorov, told ITAR–TASS on Thursday.

#AFN2014

MOSCOW: ‘ Dmitry Medvedev Promises 700 Billion Rubles Over Five Years for Development of Crimea and Sevastopol ‘


#AceFinanceNews – RUSSIA (Moscow) – August 07 – Russian Prime Minister Dmitry Medvedev has promised 700 billion rubles for the development of Crimea and Sevastopol.


​“The total volume of the program financing during the next five years will be almost 700 billion rubles, including 660 billion rubles from the federal budget,” he said at a Cabinet meeting on Thursday.

“The funds are huge, but our state budget can provide them he told Tass.

They, every ruble from them must be used with utmost efficiency to bring benefit to the Crimean residents and all other residents of our country,” the prime minister said.

Medvedev said that the federal target program “Socio-economic development of the Republic of Crimea and city of Sevastopol until 2020” should fully synchronize the life and further development of the new regions with the rest of Russia, he added.

#AFN2014

UNITED STATES: ‘ Bank of America Close to Settling Department of Justice Mortgage Probes Deal Valued at $16-17 Billion ‘


#AceFinanceNews – UNITED STATES – August 06 – Bank of America is close to settling with the Department of Justice over mortgage probes in a deal valued at $16 billion to $17 billion, Dow Jones reported.

​The tentative deal would also include about $9 billion in cash penalties for the bank, according to a Wall Street Journal report.

Bank of America CEO Brian Moynihan and Attorney General Eric Holderspoke on the phone Thursday, and the bank soon after agreed to the basics of a deal, the Journal reported, citing sources familiar with the matter.

The Justice Department has been seeking $17 billion, while Bank of America has pushed for $13 billion, according to the Journal.

#AFN2014

UNITED STATES: ‘ Federal Reserve Approve Capital Plan Under Financial Annual Stress of Bank’s Allowing Back-Door for Dividends to Increase ‘


#AceFinanceNews – UNITED STATES – August 06 – The U.S. Federal Reserve said on Wednesday it had approved a resubmitted capital plan from Bank of America, part of an annual stress test of banks’ financial robustness.


​In April, the Fed required Bank of America to resubmit its capital plan and to suspend planned increases in capital distributions after the bank disclosed it had incorrectly reported data used in its calculations.

The bank withdrew its previously planned increase in April after it found errors that reduced a key capital level by $4 billion.

Bank of America said it would increase its quarterly dividend to 5 cents per share from 1 cent per share, its first dividend hike in seven years.

Raising the dividend has been a top priority for Chief Executive BrianMoynihan. Prior to the 2008 financial crisis, the bank paid a quarterly dividend of as much as 64 cents per share.

#AFN2014

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