Normal tech support phone call: "Press 1 for help with e-mail. Press 2 to have your password reset."

Madoff tech support phone call: "Hello, how can I help you dummy up some trading records today?"

The investigation of Bernie Madoff's fraudulent financial empire is leading to more arrests. Jerome O'Hara and George Perez, both computer programmers employed by the Ponzi schemer, were arrested by the FBI on Friday morning. The charges include conspiracy for falsifying books and records. They are accused of doing the deed for the boss and accepting hush money -- in the form of 25% raises and net bonuses of $60,000 -- to keep the scam afloat.

Continue reading Two more arrests in Madoff saga

Two more arrests in Madoff saga originally appeared on BloggingStocks on Fri, 13 Nov 2009 18:20:00 EST. Please see our terms for use of feeds.

Investors are calling for an inquiry into mutual fund fees, but the Supreme Court is reminding them that it isn't beholden to public opinion. The mutual fund industry is being accused of charging "excessive" fees, which could be particularly harsh on individual investors who use these tools as their primary way to access the market. Currently, the mutual fund industry has more than $10 trillion in assets under management, some of it through retirement and 529 college savings plans.

The Court doesn't seem inclined to step into the fray, saying that regulatory agencies are better equipped to address the situation. Chief Justice John Roberts, for example, said during arguments that "It makes a lot more sense to have the SEC regulate rates than to have courts do it, doesn't it?"

Continue reading Supreme Court pushes back on mutual fund issue

Supreme Court pushes back on mutual fund issue originally appeared on BloggingStocks on Tue, 03 Nov 2009 10:20:00 EST. Please see our terms for use of feeds.

David Friehling is only the second person to face criminal charges in the Bernard Madoff debacle. He served as Madoff's auditor from 1991 to 2008, though it's hard to say if they'll resume their relationship as cellies. For now, Friehling has only been charged (innocent until proven guilty, and such) with securities fraud, abetting investment adviser fraud and filing false reports with the SEC. On five of the six charges filed, he faces a 20-year maximum.

It's alleged that Friehling didn't conduct "meaningful" audits while in Madoff's employ, despite issuing reports saying that he'd done his job -- which paid close to $15,000 a month (no work for big pay . . . where do I sign up?). In particular, he's said to have not bothered to verify Madoff's business assets, revenue sources or bank accounts. This is no-brainer stuff for an auditor.

Continue reading Madoff bean-counter pleads not guilty

Madoff bean-counter pleads not guilty originally appeared on BloggingStocks on Sun, 19 Jul 2009 16:00:00 EST. Please see our terms for use of feeds.

Hedge fund manager Michael Regan has pleaded guilty to running a Ponzi scheme. Manager of the Massachusetts-based River Stream Fund, he admitted to defrauding around 70 investors. The fund held just shy of $20 million in assets ... despite the relatively meager $101,600 sitting in its accounts. The fund purported to return 20 percent a year since 2001, paying out $9 million in "profits" and returned capital.

Continue reading Ponzi manager pleads guilty and settles civil charges

Ponzi manager pleads guilty and settles civil charges originally appeared on BloggingStocks on Fri, 26 Jun 2009 15:00:00 EST. Please see our terms for use of feeds.

Matrixx Initiatives (NASDAQ: MTXX), maker of the allegedly scent-stealing Zicam nasal swabs, tumbled to a new annual low this morning on news that the Securities and Exchange Commission (SEC) is launching an informal inquiry. The SEC is requesting documents and other information regarding the warning letter issued to Matrixx by the U.S. Food and Drug Administration.

Last week, the FDA told consumers to stop using certain nasally administered Zicam products after the agency received more than 130 complaints from users who lost their sense of smell. Matrixx has defended its homeopathic, over-the-counter offerings, calling the safety concerns "erroneous," but the firm settled hundreds of lawsuits in 2006 with consumers making the same allegations.

Continue reading Matrixx Initiatives plummets to 11-year low on SEC inquiry

Matrixx Initiatives plummets to 11-year low on SEC inquiry originally appeared on BloggingStocks on Tue, 23 Jun 2009 13:00:00 EST. Please see our terms for use of feeds.

To paraphrase our next Secretary of State, it takes a village to keep an investment scam going. It takes an entrepreneur who's hungry, amoral, and clever; investors eager to believe that what's too good to be true is real; auditors who get paid not to audit; politicians who take money to keep regulation away; and regulators who do what the politicians tell them to do.

All these factors were in play with the $50 billion Madoff Securities scandal. As I posted, Bernie Madoff was able to scam investors by creating false financial statements and using a tiny, unknown auditor to persuade investors hungry for membership in his club that they could get regular 10% annual returns in any market.

But Madoff's scam also benefited from a hands-off policy towards Wall Street thanks to help from politicians such as Chuck Schumer (D-NY) who raised millions from Wall Street to do its bidding. As head of the Democratic Senatorial Campaign Committee between 2004 and 2008, he raised $240 million while increasing donations from Wall Street by 50%. In return Wall Street got free-market, deregulatory policies that helped them cook up the scandals that have helped wipe out $30 trillion in global stock market value in the last year.

Continue reading It takes a village to pull off a $50 billion investment scam

It takes a village to pull off a $50 billion investment scam originally appeared on BloggingStocks on Sun, 14 Dec 2008 09:15:00 EST. Please see our terms for use of feeds.

Eighteen months ago, banks were throwing money around with very little discretion. Now we find that they made a lot of bad loans, took extreme risk and jeopardized the global economy and the well being of hundreds of millions of people.

All this was supported by a simple minded president, corrupt Congress and an over-confident, short sighted investment community maneuvering in and around a sleeping Securities and Exchange Commission.

Having invested in a broad range of real estate assets (as well as stocks), I am feeling the pain like most everyone else. Reduced values, tighter liquidity, and uncertainty rule the market place.

What has me steamed currently is that I think there is more capital in the marketplace than courage! The lack of courage along with a shortage of leadership and wisdom continues to exacerbate a bad situation. I am probably better off than many people having been able to close two loans in the past month. It was not easy. However, after dealing with many financial institutions that are now doing a better job in the review process, I see that they have swung too far to the conservative side.

Continue reading Banking stupidity, then and now

Banking stupidity, then and now originally appeared on BloggingStocks on Wed, 19 Nov 2008 13:30:00 EST. Please see our terms for use of feeds.

SEC wrings NEC's neck originally appeared on BloggingStocks on Thu, 26 Jun 2008 10:22:00 EST. Please see our terms for use of feeds.

Continue reading Why should investors lose a voice in who runs their companies?

Why should investors lose a voice in who runs their companies? originally appeared on BloggingStocks on Tue, 04 Dec 2007 18:01:00 EST. Please see our terms for use of feeds.

Bank of America (NYSE: BAC) volatility at 23 into 3Q net income decline of 32% to $3.7 billion. BAC is recently trading at $48.46 in pre-open trading, below Wednesday's close of $50.03. BAC reported Q3 EPS of 82 cents vs. consensus estimates of $1.05. BAC November option implied volatility of 23 is near 26-week average of 21 according to Track Data, suggesting non-directional risk.

Countrywide (NYSE: CFC), a U.S. home mortgage lender, closed Wednesday at $17.35. The Wall Street Journal says "The Securities and Exchange Commission has opened an informal investigation into stock sales by CFC's CEO, according to people familiar with the matter." CFC Chairman, CEO & founder is Angelo Mozilo. CFC is expected to report EPS on 10/26. CFC November option implied volatility of 74 is above its 26-week average of 59 according to Track Data, suggesting larger risk.

Apple (NASDAQ: AAPL) is recently down $1.24 to $171.51 in pre-open trading. AAPL will report Q4 EPS on October 22. AAPL November option implied volatility of 54 is above its 26-week average of 43 according to Track Data, suggesting larger price movement.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Visit AOL Money & Finance for more earnings coverage

Option update 10-18-07: Bank of America volatility up on earnings miss originally appeared on BloggingStocks on Thu, 18 Oct 2007 08:19:00 EST. Please see our terms for use of feeds.

Continue reading Feds to investigate Dow Jones insider trading

Feds to investigate Dow Jones insider trading originally appeared on BloggingStocks on Tue, 08 May 2007 08:30:00 EST. Please see our terms for use of feeds.