ATTORNEY FOR KENNETH IRA STAR CHARGED BY SEC

This is an expansion of the case brought earlier against Kenneth Ira Star. This time the charges were brought against his attorney who is alleged to have helped Mr. Star by allowing him to use attorney trust accounts to allegedly steal money from clients. Please take a look at the following case which was excerpted from the SEC web site:

Washington, D.C., Dec. 16, 2010 — The Securities and Exchange Commission today charged Jonathan Star Bristol, attorney for former financial advisor Kenneth Ira Starr, with aiding and abetting Starr's multi-million dollar fraud by allowing Starr to use his attorney trust accounts as conduits when Starr stole money from advisory clients.

The SEC alleges that more than $25 million belonging to Starr's clients flowed through Bristol's attorney trust accounts. Without his clients' authorization, Starr would transfer their funds into the attorney trust accounts, and then Bristol would transfer the stolen funds to Starr and his two companies for personal use.
The SEC alleges that Bristol never disclosed the existence of the attorney trust accounts to the prominent international law firm where he worked at the time. Monthly account statements clearly listing the names of Starr's clients as the source of the incoming transfers were sent directly to Bristol's home address instead of the law firm. Meanwhile, Bristol touted his relationship with Starr to his colleagues and others, claiming that Starr managed $70 billion in assets. In fact, Starr managed only a fraction of that amount.
"Bristol had a legal and professional responsibility not to assist Ken Starr in conduct that he knew was unlawful," said George S. Canellos, Director of the SEC's New York Regional Office. "Bristol crossed the line from lawyer to conspirator when he failed to safeguard funds entrusted to him, helped Starr steal client money, and lied to the victims to perpetuate the scheme."
The SEC previously charged Starr, Starr Investment Advisors LLC, and Starr & Company LLC with violating securities laws pertaining to custody of clients' assets and misusing client funds to buy a multi-million dollar luxury condominium on Manhattan's Upper East Side among other things.
The SEC's amended complaint, filed today in federal court in Manhattan, adds Bristol as a defendant, alleging that beginning around November 2008 and continuing until Starr's arrest in May 2010, Bristol repeatedly allowed Starr to use his attorney trust accounts to funnel money stolen from Starr clients. Notwithstanding his personal role in the scheme, Bristol represented Starr and his companies throughout the SEC's investigation and in an investment advisory examination by SEC staff.
According to the SEC's amended complaint, Bristol was confronted by one of Starr's victims about an unauthorized $1 million transfer from the victim's account. Bristol lied to the victim that the funds were being bundled with other clients' funds for an investment with UBS Financial Services. In fact, Bristol had already used the misappropriated funds to pay a multi-million dollar legal settlement with one of Starr's former clients. Bristol subsequently sought to represent that same victim after the victim was contacted by SEC staff in its investigation. In addition to the fact that such representations violated the ethical obligations of lawyers, Bristol's clear intent was to obstruct and undermine the SEC's investigation in order to conceal the wrongdoing.
The SEC's amended complaint charges Bristol with aiding and abetting the Starr Parties' violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with pre-judgment interest and financial penalties. The SEC also will seek an order barring Bristol from practicing before the Commission pursuant to Rule 102(e) of the Commission's Rules of Practice.”

It is hard to perpetrate a fraud alone. The only problem is that complicated plans will often fall apart and all the participants will have their part in the conspiracy brought to light.

SEC INFORMS INVESTORS REGARDING TRADING SUSPENSIONS

The following information is from the SEC web site. It helps to define the parameters the SEC uses when suspending the trading in a particular security. The excerpt from the SEC page also tries to answer questions regarding the suspension of a security. If you have questions regarding SEC supensions please read the following:

"The federal securities laws allow the SEC to suspend trading in any stock for up to ten trading days. This document answers some of the typical questions we receive from investors about trading suspensions.


When can the SEC suspend a stock from trading?
When it serves the public interest and will protect investors, the SEC may suspend trading. For instance, the SEC may act when public information about a company is not current, accurate, or adequate. The SEC has acted when serious questions arose about a company's assets, operations, or other financial information.


Why couldn't the SEC forewarn me that it was about to suspend trading before I bought the security in the first place?
The SEC cannot announce that it's working on a suspension. We conduct this work confidentially to maintain our effectiveness and to guard against the destruction of evidence if our work becomes widely known. Confidentiality also protects a company and its shareholders if the SEC ultimately decides not to issue a trading suspension. Mindful of the seriousness of suspensions, the SEC moves as quickly as possible when it considers a trading suspension.


What happens when the ten-day suspension period ends? Will the SEC issue a statement about the status of the company after the suspension has ended?
No. The SEC will not comment publicly on the status of a company when the ten-day suspension ends because the company may still have serious legal problems. For instance, the SEC may continue to investigate a company to determine whether it has defrauded investors. The public will not know if the SEC is continuing its investigation until the SEC publicly announces an enforcement action against the company.


Will trading automatically resume after ten days?
It depends on the market where the stock trades. Different rules apply in different markets.

For stocks that trade in the OTC or the over-the-counter market, trading does not automatically resume when a suspension ends. (The OTC market includes the Bulletin Board and the Pink Sheets.) Before trading can resume for OTC stocks, SEC regulations require a broker-dealer to review information about a company before publishing a quote. If a broker-dealer does not have confidence that a company's financial statements are current and accurate, especially in light of the questions raised by the SEC, then a broker-dealer may not publish a quote for the company's stock.

In contrast to OTC stocks, stocks that trade on an exchange or Nasdaq resume trading as soon as an SEC suspension ends.


If the suspended stock resumes trading, why is it trading at a much lower price?
The trading suspension may raise serious questions and cast doubts about the company in the minds of investors. While some investors may be willing to buy the company's stock, they will do so only at significantly lower prices.


Why would the SEC take such action when it knows it will hurt current shareholders?
Because a suspension often causes a dramatic decline in the price of the security, the SEC suspends trading only when it believes the public may be making investment decisions based on false or misleading information. Suspensions give notice to current and potential investors that we have serious concerns about a company. A suspension may prevent potential investors from being victimized by a fraud.


How can I find out if the stock will trade again after a suspension?
You can contact the broker-dealer who sold you the stock or a broker-dealer who quoted the stock before the suspension. Ask the broker-dealer if it intends to resume publishing a quote in the company's stock.


If there is no market to sell my security, what can I do with my shares?
If there is no market to trade the shares, they may be worthless. You may want to contact your financial or tax adviser to determine how to treat such a loss on your tax return.


What can I do if the company acted wrongfully and I have lost money?
To get your money back, you will need to consider taking legal action on your own. The SEC cannot act as your lawyer. You must continue to pursue all of your legal remedies. For more information about how to protect your legal rights, including finding a lawyer who specializes in securities laws, read our flyer, How the SEC Handles Your Complaint or Inquiry.

To learn how to file an arbitration action against a broker-dealer, you can contact the Director of Arbitration at FINRA or the New York Stock Exchange. FINRA and the NYSE also offer mediation as an option before going to arbitration.


Where can I get information about trading suspensions?
You can find a list of companies whose stocks have been suspended by the SEC since October 1995 on our Web site.


How can I learn more?
We offer educational materials so that you can understand how the securities industry works and how you can avoid costly mistakes and fraud. Our educational materials also provide tips on how you can invest wisely. You can order our free publications by calling (800) SEC-0330, or read them on our Web site. For specific information about the risks of investing in low-priced stocks, see our publication, Microcap Stock: A Guide for Investors."

SEC SAYS COMPANY DIRECTLY BOUGHT DISCOUNTED SECUITES AND DUMPED THEM ON THE PUBLIC

A few people in the media have been claiming that the securities market is rigged in favor of a few investors who have an inside track with exchanges and companies for the purpose of manipulating markets and swindling the public. If the following alleged crimes took place then this case is one that certainly proves that investing in securities based upon price moves and company information can be very dangerous for small investors. The following details are from the SEC web site:

Washington, D.C., Jan. 6, 2011 — The Securities and Exchange Commission today charged Gendarme Capital Corporation and its two executives with engaging in an illegal stock distribution scheme.

The SEC alleges that Gendarme repeatedly acquired deeply discounted shares from penny stock issuers under the pretense of a long-term investment and then dumped the shares into the market, essentially effecting public stock distributions without complying with the disclosure requirements of the federal securities laws. Through its two principals — CEO Ezat Rahimi of Elk Grove, Calif., and vice president Ian Lamphere of Lawrenceville, Vt. — Gendarme sold more than 15 billion shares of at least a dozen companies, netting illicit profits of more than $1.6 million.

"The federal securities laws are designed to ensure that buyers of stock in the open market have access to information about the companies in which they are investing," said Marc Fagel, Director of the SEC's San Francisco Regional Office. "Gendarme and its executives created a novel, but illegal, business plan to make an end-run around these investor protection laws, supposedly buying billions of shares of penny stock for investment purposes but instead turning around and dumping those shares into the market."
According to the SEC's complaint, filed today in federal district court in Sacramento, Gendarme began entering into agreements with penny stock issuers in early 2008. The agreements gave Gendarme the right to purchase stock at 30 to 50 percent discounts to the market price. The SEC alleges that, in an effort to avoid the registration and disclosure obligations of the federal securities laws, Gendarme falsely represented to issuers that it was purchasing shares for "investment purposes only." Contrary to those representations, Gendarme quickly dumped most of these shares on the public markets, profiting by more than $1.6 million from its unregistered stock distributions.

The SEC also alleges that Gendarme's outside attorney — Cassandra Armento of Greenwich, N.Y. — violated the securities laws by issuing more than 50 false legal opinion letters in support of Gendarme's activities. Armento repeatedly informed stock transfer agents that Gendarme was not an "underwriter" and thus had no intent to sell the stock. Thus, shares could be obtained by Gendarme without trading restrictions. However, the SEC alleges Armento made no inquiry into whether Gendarme intended to resell the stock, and was aware of information showing that it was likely that Gendarme was dumping the stock into the market.

The SEC's complaint charges Gendarme, Rahimi, Lamphere and Armento with violating the registration provisions of the federal securities laws. Against Gendarme, Rahimi, and Lamphere, the SEC seeks injunctive relief, disgorgement of ill-gotten gains, monetary penalties, and an order barring them from participating in an offering of penny stock. The SEC seeks injunctive relief and monetary penalties against Armento.”

The above case concerns low priced stocks however; the same types of shenanigans outlined by the SEC in the above case can happen in the case of any investment. Buying discounted to market priced shares of stock and then directly dumping them in the public market is certainly a reason some people are very rich and others are not.

FDIC PARTIAL LIST OF FAILED BANS FOR 2010

The following is a list of failed banks for 2010 which has been excerpted from the FDIC website. This list may not be complete at the time of compelation:

Bank Name City State CERT # Acquiring Institution Closing Date Updated Date

Woodlands Bank Bluffton SC 32571 Bank of the Ozarks July 16, 2010 November 1, 2010
Williamsburg First National Bank Kingstree SC 17837 First Citizens Bank and Trust Company, Inc. July 23, 2010 October 22, 2010
Wheatland Bank Naperville IL 58429 Wheaton Bank & Trust April 23, 2010 August 26, 2010
Westsound Bank Bremerton WA 34843 Kitsap Bank May 8, 2009 August 26, 2010
Westernbank Puerto Rico
En Español Mayaguez PR 31027 Banco Popular de Puerto Rico April 30, 2010 August 26, 2010
Western Commercial Bank Woodland Hills CA 58087 First California Bank November 5, 2010 November 12, 2010
WestBridge Bank and Trust Company Chesterfield MO 58205 Midland States Bank October 15, 2010 October 20, 2010
Waterford Village Bank Williamsville NY 58065 Evans Bank, N.A. July 24, 2009 August 27, 2010
Waterfield Bank Germantown MD 34976 No Acquirer March 5, 2010 August 27, 2010
Washington Mutual Bank
(Including its subsidiary Washington Mutual Bank FSB) Henderson NV 32633 JP Morgan Chase Bank September 25, 2008 November 9, 2010
Washington First International Bank Seattle WA 32955 East West Bank June 11, 2010 November 30, 2010
Warren Bank Warren MI 34824 The Huntington National Bank October 2, 2009 August 26, 2010
Wakulla Bank Crawfordville FL 21777 Centennial Bank October 1, 2010 October 7, 2010
Vineyard Bank Rancho Cucamonga CA 23556 California Bank & Trust July 17, 2009 August 27, 2010
Venture Bank Lacey WA 22868 First-Citizens Bank & Trust Company September 11, 2009 August 26, 2010
Vantus Bank Sioux City IA 27732 Great Southern Bank September 4, 2009 August 26, 2010
Valley Capital Bank, N.A. Mesa AZ 58399 Enterprise Bank & Trust December 11, 2009 August 27, 2010
USA Bank Port Chester NY 58072 New Century Bank July 9, 2010 October, 2010
Universal Federal Savings Bank Chicago IL 29355 Chicago Community Bank June 27, 2002 April 9, 2008
Unity National Bank Cartersville GA 34678 Bank of the Ozarks March 26, 2010 August 27, 2010
United Security Bank Sparta GA 22286 Ameris Bank November 6, 2009 August 27, 2010
United Commercial Bank San Francisco CA 32469 East West Bank November 6, 2009 August 27, 2010
Union Bank, National Association Gilbert AZ 34485 MidFirst Bank August 14, 2009 August 26, 2010
Turnberry Bank Aventura FL 32280 NAFH National Bank July 16, 2010 October 22, 2010
Towne Bank of Arizona Mesa AZ 57697 Commerce Bank of Arizona May 7, 2010 August 26, 2010
Town Community Bank & Trust Antioch IL 34705 First American Bank January 15, 2010 August 26, 2010
Tifton Banking Company Tifton GA 57831 Ameris Bank November 12, 2010 November 19, 2010
TierOne Bank Lincoln NE 29341 Great Western Bank June 4, 2010 September 10, 2010
Thunder Bank Sylvan Grove KS 10506 The Bennington State Bank July 23, 2010 October 22 2010
The Tattnall Bank Reidsville GA 12080 Heritage Bank of the South December 4, 2009 August 27, 2010
The Peoples Bank Winder GA 182 Community & Southern Bank September 17, 2010 October 29, 2010
The Park Avenue Bank New York NY 27096 Valley National Bank March 12, 2010 August 27, 2010
The La Coste National Bank La Coste TX 3287 Community National Bank February 19, 2010 November 3, 2010
The Gordon Bank Gordon GA 33904 Morris Bank October 22, 2010 October 27, 2010
The First National Bank of Barnesville Barnesville GA 2119 United Bank, Zebulon October 22, 2010 October 22, 2010
The Cowlitz Bank Longview WA 22643 Heritage Bank July 30, 2010 November 1, 2010
The Buckhead Community Bank Atlanta GA 34663 State Bank and Trust Company December 4, 2009 August 27, 2010
The Bank of Bonifay Bonifay FL 14246 First Federal Bank of Florida May 7, 2010 August 26, 2010
Temecula Valley Bank Temecula CA 34341 First-Citizens Bank & Trust Company July 17, 2009 August 27, 2010
TeamBank, NA Paola KS 4754 Great Southern Bank March 20, 2009 August 27, 2010
Tamalpais Bank San Rafael CA 33493 Union Bank, N.A. April 16, 2010 August 26, 2010
Superior Bank, FSB Hinsdale IL 32646 Superior Federal, FSB July 27, 2001 August 27, 2010
Sun West Bank Las Vegas NV 34785 City National Bank May 28, 2010 November 1, 2010
Sun American Bank Boca Raton FL 27126 First-Citizens Bank & Trust Company March 5, 2010 August 27, 2010
Suburban FSB Crofton MD 30763 Bank of Essex January 30, 2009 August 27, 2010
Strategic Capital Bank Champaign IL 35175 Midland States Bank May 22, 2009 August 27, 2010
Sterling Bank Lantana FL 32536 IBERIABANK July 23, 2010 July 30, 2010
Statewide Bank Covington LA 29561 Home Bank March 12, 2010 August 27, 2010
State Bank of Aurora Aurora MN 8221 Northern State Bank March 19, 2010 August 27, 2010
St. Stephen State Bank St. Stephen MN 17522 First State Bank of St. Joseph January 15, 2010 November 2, 2010
SouthwestUSA Bank Las Vegas NV 35434 Plaza Bank July 23, 2010 October 29, 2010
Southwest Community Bank Springfield MO 34255 Simmons First National Bank May 14, 2010 October 28, 2010
Southern Pacific Bank Torrance CA 27094 Beal Bank, SSB. February 7, 2003 October 20, 2008
Southern Community Bank Fayetteville GA 35251 United Community Bank June 19, 2009 August 27, 2010
Southern Colorado National Bank Pueblo CO 57263 Legacy Bank October 2, 2009 August 26, 2010
Sonoma Valley Bank Sonoma CA 27259 Westamerica Bank August 20, 2010 August 26, 2010
SolutionsBank Overland Park KS 4731 Arvest Bank December 11, 2009 August 27, 2010
Sinclair National Bank Gravette AR 34248 Delta Trust & Bank September 7, 2001 February 10, 2004
Silverton Bank, NA Atlanta GA 26535 No Acquirer May 1, 2009 August 27, 2010
Silver State Bank
En Español Henderson NV 34194 Nevada State Bank September 5, 2008 August 27, 2010
Silver Falls Bank Silverton OR 35399 Citizens Bank February 20, 2009 August 27, 2010
Shoreline Bank Shoreline WA 35250 GBC International Bank October 1, 2010 October 7, 2010
ShoreBank Chicago IL 15640 Urban Partnership Bank August 20, 2010 October 22, 2010
Sherman County Bank Loup City NE 5431 Heritage Bank February 13, 2009 August 27, 2010
Security Savings Bank, F.S.B. Olathe KS 30898 Simmons First National Bank October 15, 2010 October 20, 2010
Security Savings Bank Henderson NV 34820 Bank of Nevada February 27, 2009 August 27, 2010
Security Pacific Bank Los Angeles CA 23595 Pacific Western Bank November 7, 2008 August 27, 2010
Security Bank of North Metro Woodstock GA 57105 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of North Fulton Alpharetta GA 57430 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Jones County Gray GA 8486 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Houston County Perry GA 27048 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Gwinnett County Suwanee GA 57346 State Bank and Trust Company July 24, 2009 August 27, 2010
Security Bank of Bibb County Macon GA 27367 State Bank and Trust Company July 24, 2009 August 27, 2010
Satilla Community Bank Saint Marys GA 35114 Ameris Bank May 14, 2010 August 26, 2010
Sanderson State Bank
En Español Sanderson TX 11568 The Pecos County State Bank December 12, 2008 August 27, 2010
San Joaquin Bank Bakersfield CA 23266 Citizens Business Bank October 16, 2009 August 26, 2010
San Diego National Bank San Diego CA 23594 U.S. Bank N.A. October 30, 2009 August 26, 2010
RockBridge Commercial Bank Atlanta GA 58315 No Acquirer December 18, 2009 August 27, 2010
Rock River Bank Oregon IL 15302 The Harvard State Bank July 2, 2009 August 27, 2010
Riverview Community Bank Otsego MN 57525 Central Bank October 23, 2009 August 26, 2010
Riverside National Bank of Florida Fort Pierce FL 24067 TD Bank, N.A. April 16, 2010 August 26, 2010
Riverside Bank of the Gulf Coast Cape Coral FL 34563 TIB Bank February 13, 2009 August 27, 2010
Republic Federal Bank, N.A. Miami FL 22846 1st United Bank December 11, 2009 August 27, 2010
Reliance Bank White Plains NY 26778 Union State Bank March 19, 2004 April 9, 2008
Ravenswood Bank Chicago IL 34231 Northbrook Bank and Trust Company August 6, 2010 October 29, 2010
Rainier Pacific Bank Tacoma WA 38129 Umpqua Bank February 26, 2010 August 27, 2010
R-G Premier Bank of Puerto Rico
En Español Hato Rey PR 32185 Scotiabank de Puerto Rico April 30, 2010 August 26, 2010
Pulaski Savings Bank Philadelphia PA 27203 Earthstar Bank November 14, 2003 July 22, 2005
Prosperan Bank Oakdale MN 35074 Alerus Financial, N.A. November 6, 2009 August 27, 2010
Progress Bank of Florida Tampa FL 32251 Bay Cities Bank October 22, 2010 October 27, 2010
Premier Bank Jefferson City MO 34016 Providence Bank October 15, 2010 October 20, 2010
Premier American Bank Miami FL 57147 Premier American Bank, N.A. January 22, 2010 August 26, 2010
Platinum Community Bank Rolling Meadows IL 35030 No Acquirer September 4, 2009 August 26, 2010
Pinnacle Bank of Oregon Beaverton OR 57342 Washington Trust Bank of Spokane February 13, 2009 August 27, 2010
Pinehurst Bank Saint Paul MN 57735 Coulee Bank May 21, 2010 August 26, 2010
Pierce Commercial Bank Tacoma WA 34411 Heritage Bank November 5, 2010 November 12, 2010
PFF Bank & Trust Pomona CA 28344 U.S. Bank, N.A. November 21, 2008 August 27, 2010
Peotone Bank and Trust Company Peotone IL 10888 First Midwest Bank April 23, 2010 August 26, 2010
Peoples First Community Bank Panama City FL 32167 Hancock Bank December 18, 2009 August 27, 2010
Peoples Community Bank West Chester OH 32288 First Financial Bank, N.A. July 31, 2009 August 27, 2010
Peninsula Bank Englewood FL 26563 Premier American Bank, N.A. June 25, 2010 September 22, 2010
Partners Bank Naples FL 57959 Stonegate Bank October 23, 2009 August 26, 2010
Park National Bank Chicago IL 11677 U.S. Bank N.A. October 30, 2009 August 26, 2010
Palos Bank and Trust Company Palos Heights IL 17599 First Midwest Bank August 13, 2010 November 1, 2010
Pacific State Bank Stockton CA 27090 Rabobank, N.A. August 20, 2010 November 30, 2010
Pacific National Bank San Francisco CA 30006 U.S. Bank N.A. October 30, 2009 August 26, 2010
Pacific Coast National Bank San Clemente CA 57914 Sunwest Bank November 13, 2009 August 27, 2010
Orion Bank Naples FL 22427 IBERIABANK November 13, 2009 August 27, 2010
Omni National Bank Atlanta GA 22238 No Acquirer March 27, 2009 August 27, 2010
Olde Cypress Community Bank Clewiston FL 28864 CenterState Bank of Florida July 16, 2010 November 29, 2010
Old Southern Bank Orlando FL 58182 Centennial Bank March 12, 2010 August 27, 2010
Ocala National Bank Ocala FL 26538 CenterState Bank of Florida January 30, 2009 August 27, 2010
Oakwood Deposit Bank Co. Oakwood OH 8966 The State Bank & Trust Company February 1, 2002 August 27, 2010
Northwest Bank & Trust Acworth GA 57658 State Bank and Trust Company July 30, 2010 November 29, 2010
North Houston Bank Houston TX 18776 U.S. Bank N.A. October 30, 2009 August 26, 2010
North County Bank Arlington WA 35053 Whidbey Island Bank September 24, 2010 September 29, 2010
NextBank, NA Phoenix AZ 22314 No Acquirer February 7, 2002 August 27, 2010
New South Federal Savings Bank Irondale AL 32276 Beal Bank December 18, 2009 August 27, 2010
New Liberty Bank Plymouth MI 35586 Bank of Ann Arbor May 14, 2010 August 26, 2010
New Frontier Bank Greeley CO 34881 No Acquirer April 10, 2009 August 27, 2010
New Century Bank Chicago IL 34821 MB Financial Bank, N.A. April 23, 2010 August 26, 2010
New Century Bank Shelby Township MI 34979 No Acquirer March 28, 2002 March 18, 2005
Nevada Security Bank Reno NV 57110 Umpqua Bank June 18, 2010 October 22, 2010
NetBank Alpharetta GA 32575 ING DIRECT September 28, 2007 August 27, 2010
Net 1st National Bank Boca Raton FL 26652 Bank Leumi USA March 1, 2002 April 9, 2008
Neighborhood Community Bank Newnan GA 35285 CharterBank June 26, 2009 August 27, 2010
National State Bank of Metropolis Metropolis IL 3815 Banterra Bank of Marion December 14, 2000 March 17, 2005
National Bank of Commerce Berkeley IL 19733 Republic Bank of Chicago January 16, 2009 August 27, 2010
Mutual Bank Harvey IL 18659 United Central Bank July 31, 2009 August 27, 2010
Mirae Bank Los Angeles CA 57332 Wilshire State Bank June 26, 2009 August 27, 2010
Millennium State Bank of Texas Dallas TX 57667 State Bank of Texas July 2, 2009 August 27, 2010
Midwest Bank and Trust Company Elmwood Park IL 18117 FirstMerit Bank, N.A. May 14, 2010 August 26, 2010
Michigan Heritage Bank Farmington Hills MI 34369 Level One Bank April 24, 2009 August 27, 2010
Miami Valley Bank Lakeview OH 16848 The Citizens Banking Company October 4, 2007 August 27, 2010
Metropolitan Savings Bank Pittsburgh PA 35353 Allegheny Valley Bank of Pittsburgh February 2, 2007 August 27, 2010
MetroPacific Bank Irvine CA 57893 Sunwest Bank June 26, 2009 August 27, 2010
Metro Bank of Dade County Miami FL 25172 NAFH National Bank July 16, 2010 October 29, 2010
Meridian Bank Eldred IL 13789 National Bank October 10, 2008 August 27, 2010
McIntosh Commercial Bank Carrollton GA 57399 CharterBank March 26, 2010 August 27, 2010
Marshall Bank, N.A. Hallock MN 16133 United Valley Bank January 29, 2010 August 26, 2010
Maritime Savings Bank West Allis WI 28612 North Shore Bank, FSB September 17, 2010 September 29, 2010
Marco Community Bank Marco Island FL 57586 Mutual of Omaha Bank February 19, 2010 August 27, 2010
Malta National Bank Malta OH 6629 North Valley Bank May 3, 2001 November 18, 2002
Mainstreet Savings Bank, FSB Hastings MI 28136 Commercial Bank July 16, 2010 July 22, 2010
Mainstreet Bank Forest Lake MN 1909 Central Bank August 28, 2009 August 26, 2010
Main Street Bank Northville MI 57654 Monroe Bank & Trust October 10, 2008 August 27, 2010
MagnetBank Salt Lake City UT 58001 No Acquirer January 30, 2009 September 22, 2010
Madisonville State Bank Madisonville TX 33782 U.S. Bank N.A. October 30, 2009 August 26, 2010
Los Padres Bank Solvang CA 32165 Pacific Western Bank August 20, 2010 October 22, 2010
Lincoln Park Savings Bank Chicago IL 30600 Northbrook Bank and Trust Company April 23, 2010 August 26, 2010
LibertyPointe Bank New York NY 58071 Valley National Bank March 11, 2010 August 27, 2010
LibertyBank Eugene OR 31964 Home Federal Bank July 30, 2010 August 6, 2010
Lakeside Community Bank Sterling Heights MI 34878 No Acquirer April 16, 2010 August 27, 2010
La Jolla Bank, FSB La Jolla CA 32423 OneWest Bank, FSB February 19, 2010 August 27, 2010
Key West Bank Key West FL 34684 Centennial Bank March 26, 2010 November 3, 2010
K Bank Randallstown MD 31263 Manufacturers and Traders Trust Company November 5, 2010 November 12, 2010
John Warner Bank Clinton IL 12093 State Bank of Lincoln July 2, 2009 August 27, 2010
Jennings State Bank Spring Grove MN 11416 Central Bank October 2, 2009 August 26, 2010
ISN Bank Cherry Hill NJ 57107 Customers Bank September 17, 2010 September 21, 2010
Irwin Union Bank, F.S.B. Louisville KY 57068 First Financial Bank, N.A. September 18, 2009 August 26, 2010
Irwin Union Bank and Trust Company Columbus IN 10100 First Financial Bank, N.A. September 18, 2009 August 26, 2010
Integrity Bank Jupiter FL 57604 Stonegate Bank July 31, 2009 August 27, 2010
Integrity Bank Alpharetta GA 35469 Regions Bank August 29, 2008 August 27, 2010
Innovative Bank Oakland CA 23876 Center Bank April 16, 2010 August 26, 2010
IndyMac Bank Pasadena CA 29730 OneWest Bank, FSB. July 11, 2008 August 27, 2010
Independent National Bank Ocala FL 27344 CenterState Bank of Florida, N.A. August 20, 2010 August 24, 2010
Independent Bankers' Bank Springfield IL 26820 The Independent BankersBank (TIB) December 18, 2009 August 27, 2010
InBank Oak Forest IL 20203 MB Financial Bank September 4, 2009 August 26, 2010
Imperial Savings and Loan Association Martinsville VA 31623 River Community Bank, N.A. August 20, 2010 October 22, 2010
Imperial Capital Bank La Jolla CA 26348 City National Bank December 18, 2009 August 27, 2010
Ideal Federal Savings Bank Baltimore MD 32456 No Acquirer July 9, 2010 July 12, 2010
Hume Bank Hume MO 1971 Security Bank March 7, 2008 August 27, 2010
Horizon Bank Bradenton FL 35061 Bank of the Ozarks September 10, 2010 November 1, 2010
Horizon Bank Bellingham WA 22977 Washington Federal Savings and Loan Association January 8, 2010 November 04, 2010
Horizon Bank Pine City MN 9744 Stearns Bank N.A. June 26, 2009 August 27, 2010
Home Valley Bank Cave Junction OR 23181 South Valley Bank & Trust July 23, 2010 October 29, 2010
Home National Bank Blackwell OK 11636 RCB Bank July 9, 2010 November 4, 2010
Home Federal Savings Bank Detroit MI 30329 Liberty Bank and Trust Company November 6, 2009 August 27, 2010
Hillcrest Bank Florida Naples FL 58336 Stonegate Bank October 23, 2009 August 26, 2010
Hillcrest Bank Overland Park KS 22173 Hillcrest Bank, N.A. October 22, 2010 October 27, 2010
High Desert State Bank Albuquerque NM 35279 First American Bank June 25, 2010 November 1, 2010
Heritage Community Bank Glenwood IL 20078 MB Financial Bank, N.A. February 27, 2009 August 27, 2010
Haven Trust Bank Florida Ponte Vedra Beach FL 58308 First Southern Bank September 24, 2010 October 28, 2010
Haven Trust Bank Duluth GA 35379 Branch Banking & Trust Company, (BB&T) December 12, 2008 August 27, 2010
Hamilton Bank, NA
En Español Miami FL 24382 Israel Discount Bank of New York January 11, 2002 August 27, 2010
Gulf State Community Bank Carrabelle FL 20340 Centennial Bank November 19, 2010 November 24, 2010
Guaranty National Bank of Tallahassee Tallahassee FL 26838 Hancock Bank of Florida March 12, 2004 August 30, 2010
Guaranty Bank Austin TX 32618 BBVA Compass August 21, 2009 August 26, 2010
Greater Atlantic Bank Reston VA 32583 Sonabank December 4, 2009 August 27, 2010
Great Basin Bank of Nevada Elko NV 33824 Nevada State Bank April 17, 2009 November 30, 2010
Granite Community Bank, NA Granite Bay CA 57315 Tri Counties Bank May 28, 2010 November 1, 2010
Georgian Bank Atlanta GA 57151 First Citizens Bank and Trust Company, Inc. September 25, 2009 August 26, 2010
George Washington Savings Bank Orland Park IL 29952 FirstMerit Bank, N.A. February 19, 2010 August 27, 2010
Gateway Bank of St. Louis St. Louis MO 19450 Central Bank of Kansas City November 6, 2009 August 27, 2010
Frontier Bank Everett WA 22710 Union Bank, N.A. April 30, 2010 August 26, 2010
Freedom Bank of Georgia Commerce GA 57558 Northeast Georgia Bank March 6, 2009 August 27, 2010
Freedom Bank Bradenton FL 57930 Fifth Third Bank October 31, 2008 August 27, 2010
Franklin Bank, SSB Houston TX 26870 Prosperity Bank November 7, 2008 August 27, 2010
Founders Bank Worth IL 18390 The PrivateBank and Trust Company July 2, 2009 August 27, 2010
Florida Community Bank Immokalee FL 5672 Premier American Bank, N.A. January 29, 2010 August 26, 2010
Flagship National Bank Bradenton FL 35044 First Federal Bank of Florida October 23, 2009 August 26, 2010
FirstCity Bank Stockbridge GA 18243 No Acquirer March 20, 2009 August 27, 2010
FirstBank Financial Services McDonough GA 57017 Regions Bank February 6, 2009 August 27, 2010
First Vietnamese American Bank
In Vietnamese Westminster CA 57885 Grandpoint Bank November 5, 2010 November 12, 2010
First Suburban National Bank Maywood IL 16089 Seaway Bank and Trust Company October 22, 2010 October 27, 2010
First State Bank of Winchester Winchester IL 11710 The First National Bank of Beardstown July 2, 2009 August 27, 2010
First State Bank of Altus Altus OK 9873 Herring Bank July 31, 2009 August 27, 2010
First State Bank Flagstaff AZ 34875 Sunwest Bank September 4, 2009 August 26, 2010
First State Bank Sarasota FL 27364 Stearns Bank, N.A. August 7, 2009 September 23, 2010
First Security National Bank Norcross GA 26290 State Bank and Trust Company December 4, 2009 August 27, 2010
First Regional Bank Los Angeles CA 23011 First-Citizens Bank & Trust Company January 29, 2010 August 26, 2010
First Priority Bank Bradenton FL 57523 SunTrust Bank August 1, 2008 August 27, 2010
First Piedmont Bank Winder GA 34594 First American Bank and Trust Company July 17, 2009 August 27, 2010
First National Bank of the South Spartanburg SC 35383 NAFH National Bank July 16, 2010 November 1, 2010
First National Bank of Nevada Reno NV 27011 Mutual of Omaha Bank July 25, 2008 August 27, 2010
First National Bank of Georgia Carrollton GA 16480 Community and Southern Bank January 29, 2010 November 3, 2010
First National Bank of Danville Danville IL 3644 First Financial Bank, N.A. July 2, 2009 August 27, 2010
First National Bank of Blanchardville Blanchardville WI 11639 The Park Bank May 9, 2003 September 21, 2010
First National Bank of Anthony Anthony KS 4614 Bank of Kansas June 19, 2009 August 27, 2010
First National Bank Savannah GA 34152 The Savannah Bank, N.A. June 25, 2010 October 21, 2010
First National Bank Rosedale MS 15814 The Jefferson Bank June 4, 2010 August 26, 2010
First Lowndes Bank Fort Deposit AL 24957 First Citizens Bank March 19, 2010 November 03, 2010
First Integrity Bank, NA Staples MN 12736 First International Bank and Trust May 30, 2008 August 27, 2010
First Heritage Bank, NA Newport Beach CA 57961 Mutual of Omaha Bank July 25, 2008 August 27, 2010
First Georgia Community Bank Jackson GA 34301 United Bank December 5, 2008 August 27, 2010
First Federal Bank of North Florida Palatka FL 28886 TD Bank, N.A. April 16, 2010 August 27, 2010
First Federal Bank of California, F.S.B. Santa Monica CA 28536 OneWest Bank December 18, 2009 August 26, 2010
First DuPage Bank Westmont IL 35038 First Midwest Bank October 23, 2009 August 26, 2010
First Coweta Bank Newnan GA 57702 United Bank August 21, 2009 August 26, 2010
First Commerce Community Bank Douglasville GA 57448 Community & Southern Bank September 17, 2010 September 22, 2010
First Banking Center Burlington WI 5287 First Michigan Bank November 19, 2010 November 24, 2010
First BankAmericano Elizabeth NJ 34270 Crown Bank July 31, 2009 August 27, 2010
First Bank of Kansas City Kansas City MO 25231 Great American Bank September 4, 2009 August 26, 2010
First Bank of Jacksonville Jacksonville FL 27573 Ameris Bank October 22, 2010 October 27, 2010
First Bank of Idaho Ketchum ID 34396 U.S. Bank, N.A. April 24, 2009 August 27, 2010
First Bank of Beverly Hills Calabasas CA 32069 No Acquirer April 24, 2009 August 27, 2010
First Arizona Savings, A FSB Scottsdale AZ 32582 No Acquirer October 22, 2010 October 27, 2010
First Alliance Bank & Trust Co. Manchester NH 34264 Southern New Hampshire Bank & Trust February 2, 2001 February 18, 2003
Farmers Bank of Cheneyville Cheneyville LA 16445 Sabine State Bank & Trust December 17, 2002 October 20, 2004
Evergreen Bank Seattle WA 20501 Umpqua Bank January 22, 2010 August 26, 2010
Eurobank
En Español San Juan PR 27150 Oriental Bank and Trust April 30, 2010 August 26, 2010
Elizabeth State Bank Elizabeth IL 9262 Galena State Bank and Trust Company July 2, 2009 August 27, 2010
ebank Atlanta GA 34682 Stearns Bank, N.A. August 21, 2009 August 26, 2010
Dwelling House Savings and Loan Association Pittsburgh PA 31559 PNC Bank, N.A. August 14, 2009 August 26, 2010
Downey Savings & Loan Newport Beach CA 30968 U.S. Bank, N.A. November 21, 2008 August 27, 2010
Douglass National Bank Kansas City MO 24660 Liberty Bank and Trust Company January 25, 2008 August 27, 2010
Dollar Savings Bank Newark NJ 31330 No Acquirer February 14, 2004 April 9, 2008
Desert Hills Bank Phoenix AZ 57060 New York Community Bank March 26, 2010 August 27, 2010
Darby Bank & Trust Co. Vidalia GA 14580 Ameris Bank November 12, 2010 November 19, 2010
Crescent Bank and Trust Company Jasper GA 27559 Renasant Bank July 23, 2010 September 13, 2010
County Bank Merced CA 22574 Westamerica Bank February 6, 2009 August 27, 2010
Corus Bank, N.A. Chicago IL 13693 MB Financial Bank, N.A. September 11, 2009 August 26, 2010
Corn Belt Bank & Trust Co. Pittsfield IL 16500 The Carlinville National Bank February 13, 2009 August 27, 2010
Copper Star Bank Scottsdale AZ 35463 Stearns Bank, N.A. November 12, 2010 November 19, 2010
Cooperative Bank Wilmington NC 27837 First Bank June 19, 2009 August 27, 2010
Connecticut Bank of Commerce Stamford CT 19183 Hudson United Bank June 26, 2002 August 27, 2010
Community Security Bank New Prague MN 34486 Roundbank July 23, 2010 November 17, 2010
Community National Bank of Sarasota County Venice FL 27183 Stearns Bank, N.A. August 7, 2009 August 26, 2010
Community National Bank at Bartow Bartow FL 25266 CenterState Bank of Florida, N.A. August 20, 2010 October 22, 2010
Community First Bank Prineville OR 23268 Home Federal Bank August 7, 2009 August 26, 2010
Community Bank of West Georgia Villa Rica GA 57436 No Acquirer June 26, 2009 August 27, 2010
Community Bank of Nevada Las Vegas NV 34043 No Acquirer August 14, 2009 August 26, 2010
Community Bank of Lemont Lemont IL 35291 U.S. Bank N.A. October 30, 2009 August 26, 2010
Community Bank of Arizona Phoenix AZ 57645 MidFirst Bank August 14, 2009 August 26, 2010
Community Bank and Trust Cornelia GA 5702 SCBT National Association January 29, 2010 August 26, 2010
Community Bank Loganville GA 16490 Bank of Essex November 21, 2008 August 27, 2010
Commerce Bank of Southwest Florida Fort Myers FL 58016 Central Bank November 20, 2009 August 27, 2010
Columbian Bank & Trust Topeka KS 22728 Citizens Bank & Trust August 22, 2008 August 27, 2010
Columbia River Bank The Dalles OR 22469 Columbia State Bank January 22, 2010 November 2, 2010
Colorado National Bank Colorado Springs CO 18896 Herring Bank March 20, 2009 August 27, 2010
Colonial Bank Montgomery AL 9609 Branch Banking and Trust Company, (BB&T) August 14, 2009 August 26, 2010
Coastal Community Bank Panama City Beach FL 9619 Centennial Bank July 30, 2010 October 29, 2010
City Bank Lynnwood WA 21521 Whidbey Island Bank April 16, 2010 November 29, 2010
Citizens State Bank New Baltimore MI 1006 No Acquirer December 18, 2009 August 27, 2010
Citizens National Bank Teague TX 25222 U.S. Bank N.A. October 30, 2009 August 26, 2010
Citizens National Bank Macomb IL 5757 Morton Community Bank May 22, 2009 August 27, 2010
Citizens Community Bank Ridgewood NJ 57563 North Jersey Community Bank May 1, 2009 August 27, 2010
Citizens Bank and Trust Company of Chicago Chicago IL 34658 Republic Bank of Chicago April 23, 2010 November 4, 2010
Charter Bank Santa Fe NM 32498 Charter Bank January 22, 2010 August 26, 2010
Champion Bank Creve Coeur MO 58362 BankLiberty April 30, 2010 August 26, 2010
CF Bancorp Port Huron MI 30005 First Michigan Bank April 30, 2010 August 26, 2010
Century Security Bank Duluth GA 58104 Bank of Upson March 19, 2010 August 27, 2010
Century Bank, F.S.B. Sarasota FL 32267 IBERIABANK November 13, 2009 August 27, 2010
Centennial Bank Ogden UT 34430 No Acquirer March 5, 2010 August 27, 2010
Carson River Community Bank Carson City NV 58352 Heritage Bank of Nevada February 26, 2010 August 27, 2010
CapitalSouth Bank Birmingham AL 22130 IBERIABANK August 21, 2009 August 26, 2010
Cape Fear Bank Wilmington NC 34639 First Federal Savings and Loan Association April 10, 2009 August 27, 2010
California National Bank Los Angeles CA 34659 U.S. Bank N.A. October 30, 2009 August 26, 2010
Butte Community Bank Chico CA 33219 Rabobank, N.A. August 20, 2010 October 28, 2010
Butler Bank Lowell MA 26619 People's United Bank April 16, 2010 November 4, 2010
Broadway Bank Chicago IL 22853 MB Financial Bank, N.A. April 23, 2010 November 03, 2010
Brickwell Community Bank Woodbury MN 57736 CorTrust Bank N.A. September 11, 2009 August 26, 2010
Bramble Savings Bank Milford OH 27808 Foundation Bank September 17, 2010 October 22, 2010
Bradford Bank Baltimore MD 28312 Manufacturers and Traders Trust Company (M&T Bank) August 28, 2009 August 26, 2010
Benchmark Bank Aurora IL 10440 MB Financial Bank, N.A. December 4, 2009 August 27, 2010
Beach First National Bank Myrtle Beach SC 34242 Bank of North Carolina April 9, 2010 August 27, 2010
BC National Banks Butler MO 17792 Community First Bank April 30, 2010 November 4, 2010
Bayside Savings Bank Port Saint Joe FL 57669 Centennial Bank July 30, 2010 October 22, 2010
Bay National Bank Baltimore MD 35462 Bay Bank, FSB July 9, 2010 July 19, 2010
Barnes Banking Company Kaysville UT 1252 No Acquirer January 15, 2010 August 26, 2010
BankUnited, FSB Coral Gables FL 32247 BankUnited May 21, 2009 November 12, 2010
BankFirst Sioux Falls SD 34103 Alerus Financial, N.A. July 17, 2009 August 27, 2010
Bank USA, N.A. Phoenix AZ 32218 U.S. Bank N.A. October 30, 2009 August 26, 2010
Bank of Wyoming Thermopolis WY 22754 Central Bank & Trust July 10, 2009 August 27, 2010
Bank of Sierra Blanca Sierra Blanca TX 22002 The Security State Bank of Pecos January 18, 2002 November 6, 2003
Bank of Lincolnwood Lincolnwood IL 17309 Republic Bank of Chicago June 5, 2009 August 27, 2010
Bank of Leeton Leeton MO 8265 Sunflower Bank, N.A. January 22, 2010 August 26, 2010
Bank of Illinois Normal IL 9268 Heartland Bank and Trust Company March 5, 2010 August 27, 2010
Bank of Honolulu Honolulu HI 21029 Bank of the Orient October 13, 2000 March 17, 2005
Bank of Hiawassee Hiawassee GA 10054 Citizens South Bank March 19, 2010 August 27, 2010
Bank of Florida - Tampa Tampa FL 57814 EverBank May 28, 2010 August 26, 2010
Bank of Florida - Southwest Naples FL 35106 EverBank May 28, 2010 August 26, 2010
Bank of Florida - Southeast Fort Lauderdale FL 57360 EverBank May 28, 2010 August 26, 2010
Bank of Ephraim Ephraim UT 1249 Far West Bank June 25, 2004 April 9, 2008
Bank of Elmwood Racine WI 18321 Tri City National Bank October 23, 2009 August 26, 2010
Bank of Ellijay Ellijay GA 58197 Community & Southern Bank September 17, 2010 September 23, 2010
Bank of Clark County Vancouver WA 34959 Umpqua Bank January 16, 2009 August 27, 2010
Bank of Alamo Alamo TN 9961 No Acquirer November 8, 2002 March 18, 2005
Arcola Homestead Savings Bank Arcola IL 31813 No Acquirer June 4, 2010 August 26, 2010
Appalachian Community Bank Ellijay GA 33989 Community & Southern Bank March 19, 2010 August 27, 2010
ANB Financial, NA Bentonville AR 33901 Pulaski Bank and Trust Company May 9, 2008 August 27, 2010
AmTrust Bank Cleveland OH 29776 New York Community Bank December 4, 2009 August 27, 2010
AmTrade International Bank
En Español Atlanta GA 33784 No Acquirer September 30, 2002 September 11, 2006
AmericanFirst Bank Clermont FL 57724 TD Bank, N.A. April 16, 2010 November 8, 2010
American United Bank Lawrenceville GA 57794 Ameris Bank October 23, 2009 August 26, 2010
American Sterling Bank Sugar Creek MO 8266 Metcalf Bank April 17, 2009 August 27, 2010
American Southern Bank Kennesaw GA 57943 Bank of North Georgia April 24, 2009 August 27, 2010
American National Bank Parma OH 18806 The National Bank and Trust Company March 19, 2010 November 4, 2010
American Marine Bank Bainbridge Island WA 16730 Columbia State Bank January 29, 2010 August 26, 2010
America West Bank Layton UT 35461 Cache Valley Bank May 1, 2009 August 26, 2010
Ameribank Northfork WV 6782 The Citizens Savings Bank

Pioneer Community Bank, Inc. September 19, 2008 August 27, 2010
Amcore Bank, National Association Rockford IL 3735 Harris N.A. April 23, 2010 August 26, 2010
Alpha Bank & Trust Alpharetta GA 58241 Stearns Bank, N.A. October 24, 2008 August 27, 2010
Alliance Bank Culver City CA 23124 California Bank & Trust February 6, 2009 August 27, 2010
Allegiance Bank of North America Bala Cynwyd PA 35078 VIST Bank November 19, 2010 November 24, 2010
Affinity Bank Ventura CA 27197 Pacific Western Bank August 28, 2009 August 26, 2010
Advanta Bank Corp. Draper UT 33535 No Acquirer March 19, 2010 September 16, 2010
Access Bank Champlin MN 16476 PrinsBank May 7, 2010 August 26, 2010
1st Pacific Bank of California San Diego CA 35517 City National Bank May 7, 2010 August 26, 2010
1st American State Bank of Minnesota Hancock MN 15448 Community Development Bank, FSB February 5, 2010 November 8, 2010
1st Centennial Bank Redlands CA 33025 First California Bank January 23, 2009 August 27, 2010

Last Updated 11/29/2010 cservicefdicdal@fdic.gov

HAPPY NEW YEAR

ALCATEL PAYS $137 MILLION IN FINES TO SETTLE BRIBERY CHARGES

Paying bribes is the antithesis of capitalism. It allows very large established and often wasteful companies with incompetent management to out-bid smaller streamlined organizations that will get a job done faster, more economically and with better quality than their larger counterparts.

The following case excerpt was published on the SEC web site. It alleges that a major U.S. corporation violated the Foreign Corrupt Practices Act by paying off foreign officials. Please take a look at the details of this case:

"The Securities and Exchange Commission filed a settled enforcement action on December 27, 2010, in the U.S. District Court for the Southern District of Florida to resolve charges that Alcatel-Lucent, S.A. (Alcatel) violated the anti-bribery, books and records, and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) by paying bribes to foreign government officials to obtain or retain business in Latin America and Asia.

Alcatel, the provider of telecommunications equipment and services, has offered to pay a total of $137.372 million in disgorgement and fines, including $45.372 million in disgorgement to the SEC. In a related action, Alcatel will pay a $92 million criminal fine to the U.S. Department of Justice.

The SEC’s complaint, filed in the Southern District of Florida, alleges that Alcatel’s bribes went to government officials in Costa Rica, Honduras, Malaysia, and Taiwan between December 2001 and June 2006. An Alcatel subsidiary provided at least $14.5 million to consulting firms through sham consulting agreements for use in the bribery scheme in Costa Rica. Various high-level government officials in Costa Rica received at least $7 million of the $14.5 million to ensure Alcatel obtained or retained three contracts to provide telephone services in Costa Rica.

The SEC alleges that the same Alcatel subsidiary bribed officials in the government of Honduras to obtain or retain five telecommunications contracts. Another Alcatel subsidiary made bribery payments to Malaysian government officials in order to procure a telecommunications contract. An Alcatel subsidiary also made illegal payments to various officials in the government of Taiwan to win a contract to supply railway axle counters to the Taiwan Railway Administration.

According to the SEC’s complaint, all of the bribery payments were undocumented or improperly recorded as consulting fees in the books of Alcatel’s subsidiaries and then consolidated into Alcatel’s financial statements. The leaders of several Alcatel subsidiaries and geographical regions, including some who reported directly to Alcatel’s executive committee, either knew or were severely reckless in not knowing about the misconduct.

The SEC’s complaint charges that Alcatel violated Section 30A of the Securities Exchange Act of 1934 by making illicit payments to foreign government officials, through its subsidiaries and agents, in order to obtain or retain business. Alcatel violated Section 13(b)(2)(B) of the Exchange Act by failing to have adequate internal controls to detect and prevent the payments. Alcatel violated Section 13(b)(2)(A) of the Exchange Act by improperly recording the payments in its books and records. Alcatel violated Section 13(b)(5) of the Exchange Act when its subsidiaries knowingly failed to implement a system of internal controls and knowingly falsified their books and records to camouflage bribes as consulting payments. Without admitting or denying the SEC’s allegations, Alcatel has consented to a court order permanently enjoining it from future violations of these statutory provisions; ordering the company to pay $45.372 million in disgorgement of wrongfully obtained profits, and ordering it to comply with certain undertakings, including an independent monitor for a three year term.

The SEC acknowledges the assistance of the U.S. Department of Justice, Fraud Section; the Federal Bureau of Investigation; the Office of the Attorney General in Costa Rica; the Fiscalía de Delitos Económicos, Corrupción y Tributarios in Costa Rica; and the Service Central de Prévention de la Corruption in France."

The current SEC seems to have done well in recovering monies in this case. Alleged crimes like this seldom see the light of day and it is good the SEC published it on their web page.

POLITICIANS, PENSION FUNDS AND THE COMMON KICKBACK

Below is the summary of a very complicated kickback scheme involving Quadrangle Group and the New York Sate Common Retirement Fund. It is a really good example of how politicians and businessmen work so well together in America. Luckily, the SEC performed it’s policing duties quite well in this case which brought about a very large fine for Steve Rattner of the Quadrangle Group. The following is an excerpt from the SEC web page:

“Washington, D.C., Nov. 18, 2010 — The Securities and Exchange Commission today charged former Quadrangle Group principal Steven Rattner with participating in a widespread kickback scheme to obtain investments from New York’s largest pension fund.

The SEC alleges that Rattner secured investments for Quadrangle from the New York State Common Retirement Fund after he arranged for a firm affiliate to distribute the DVD of a low-budget film produced by the Retirement Fund’s chief investment officer and his brothers. Rattner then caused Quadrangle to retain Henry Morris – the top political advisor and chief fundraiser for former New York State Comptroller Alan Hevesi – as a “placement agent” and pay him more than $1 million in sham fees even though Rattner was already dealing directly with then-New York State Deputy Comptroller David Loglisci and did not need an introduction to the Retirement Fund.
The SEC alleges that after receiving pressure from Morris, Rattner also arranged a $50,000 contribution to Hevesi’s re-election campaign. Just a month later, Loglisci increased the Retirement Fund’s investment with Quadrangle from $100 million to $150 million. As a result of the $150 million investment with Quadrangle, the Retirement Fund paid management fees to a Quadrangle subsidiary. By virtue of his partnership interest in Quadrangle and its affiliates, Rattner’s personal share of these fees totals approximately $3 million.
Rattner agreed to settle the SEC’s charges by paying $6.2 million and consenting to a bar from associating with any investment adviser or broker-dealer for at least two years.
“New York State retirees deserve investment advisers that are selected through a transparent, conflict-free process, not through payoffs, undisclosed financial arrangements and movie distribution deals,” said Robert Khuzami, Director of the SEC’s Division of Enforcement.
David Rosenfeld, Associate Director of the SEC’s New York Regional Office, added, “Rattner delivered special favors and conducted sham transactions that corrupted the Retirement Fund’s investment process. The assets of New York State workers were invested for the hidden purpose of enriching Morris and Loglisci’s brother.”
The SEC previously charged Morris and Loglisci for orchestrating the fraudulent scheme that extracted kickbacks from investment management firms seeking to manage the assets of the Retirement Fund. The SEC charged Quadrangle earlier this year.
According to the SEC’s complaint against Rattner filed in U.S. District Court for the Southern District of New York, Morris informed Rattner in the fall of 2003 that Loglisci’s brother was involved in producing a film called “Chooch.” Morris suggested that Rattner help Loglisci’s brother with the theatrical distribution of the film. Rattner met with Loglisci’s brother and agreed to assist him, but Rattner’s efforts did not lead to a distribution deal. Approximately one year later, Loglisci’s brother contacted Rattner about DVD distribution of “Chooch.” Within days of speaking to Loglisci’s brother, Rattner contacted Loglisci about investing in a new Quadrangle private equity fund being marketed by the firm. Rattner told Loglisci that he had arranged a meeting between Loglisci’s brother and a Quadrangle affiliate — GT Brands — to discuss a possible DVD distribution deal.
The SEC alleges that after Loglisci’s brother met with GT Brands and telephoned Rattner to complain about the treatment he had received from GT Brands, Rattner warned a GT Brands executive to treat Loglisci’s brother “carefully” because Quadrangle was trying to obtain an investment through Loglisci. After GT Brands made clear to Rattner that it was not interested in distributing the film, Rattner instructed the GT Brands executive to “dance along” with Loglisci’s brother. According to an e-mail, Rattner telephoned Morris to inquire whether “GT needs to distribute [the Chooch] video” in order to secure an investment from the Retirement Fund. Morris offered to “nose around” to determine how important the DVD distribution deal was to Loglisci. GT Brands ultimately reversed course and offered to manufacture and distribute the DVD at a discount from its standard fee. Rattner approved the proposed terms of the distribution deal.
The SEC’s complaint alleges that in late October 2004, after Rattner and others from Quadrangle had already met with Loglisci and the Retirement Fund’s private equity consultant and received encouraging feedback from both of them, Morris met with Rattner and offered his placement agent services to Quadrangle. Morris warned Rattner that Quadrangle’s negotiations with the Retirement Fund could always fall apart. Although Quadrangle was already working with a placement agent, Quadrangle agreed to pay Morris as well.
According to the SEC’s complaint, soon after Quadrangle retained Morris as a placement agent and Rattner had advised Morris that GT Brands was moving forward with the deal to distribute the Chooch DVD, Loglisci personally informed Rattner that the Retirement Fund would be making a $100 million investment in the Quadrangle fund.
The SEC alleges that Morris later contacted Rattner and pressed him for a financial contribution to Hevesi’s re-election campaign. Although Rattner purportedly had a personal policy that he would not make political contributions to politicians who have influence over public pension funds, Rattner agreed to find someone else to make the contribution. After speaking with Morris, Rattner asked a friend and the friend’s wife to each contribute $25,000 to Hevesi’s campaign. The day after these contributions were communicated to Hevesi’s campaign staff, Hevesi telephoned Rattner and left him a message thanking him for the contribution. In late May 2006, Rattner’s friend transmitted the promised campaign contributions to Rattner, who forwarded the two checks to Hevesi’s campaign. Approximately one month later, Loglisci committed the Retirement Fund to an additional $50 million investment in the Quadrangle fund.
In settling the SEC’s charges without admitting or denying the allegations, Rattner consented to the entry of a judgment that permanently enjoins him from violating Section 17(a)(2) of the Securities Act of 1933 and orders him to pay approximately $3.2 million in disgorgement and a $3 million penalty. The settlement is subject to court approval. Rattner also consented to the entry of a Commission order that will bar him from associating with any investment adviser or broker-dealer with the right to reapply after two years.”

Shake downs by state and local politicians is very common in America. I remember when my parents wanted a building permit to put up a cabin in Northern Michigan the local building inspector had to collect a fee for the permit which presumably went to the county and a bottle of Whiskey which most likely stayed with the inspector. No one cared about the little gratuity since once it was paid you could build anything and it would pass inspection. Today of course the price of paying off public officials is far more than a bottle of even one of the best bourbons distilled in Kentucky.

In the above case the SEC has again proved itself as an advocate for the people when businessmen and politicians work together against the interests of the general public. It is sad that so many people in America believe that giving and receiving bribes is just a part of capitalism. Indeed it is the way capitalism works in poor undeveloped regions of our planet. Real capitalism as practiced in the civilized world has more to do with competition between firms over the price and quality of goods and services; not competion over who will pay the biggest bribe.