Crime

Review: Steven Cohen’s enduring edge

24 Feb 2017

Sheelah Kolhatkar’s “Black Edge” is a compelling tale of the U.S. government’s decade-long failed attempt to charge the billionaire fund boss with insider trading. As Cohen prepares to open a new firm and politicians embrace deregulation, the epic struggle is clearly in the past.

Rodrigo Rato jailing is weak crisis coda

23 Feb 2017

The ex-IMF chief has been sentenced to over four years in prison for fiddling expenses while head of Spain's Bankia. It's a rare instance of severe banker punishment. For investors globally, though, this case will offer little satisfaction and even less deterrent value.

Korea fraud electrifies case for ABB spinoff

22 Feb 2017

The Swiss group suspects its South Korean treasurer helped steal $100 million. Fraud equivalent to a fifth of 2015 local sales was only uncovered after the executive absconded. This plays into the hands of activist investors who wanted ABB to become less complex.

Deutsche Boerse board makes a rod for its own back

2 Feb 2017

A bespoke pay package has led to insider trading allegations against the exchange’s CEO. Deutsche Boerse’s board didn’t have to incentivise Carsten Kengeter to buy shares worth 4.5 mln euros in 2015. It could have avoided the mess by structuring the award differently.

Kaspersky finds fighting cybercrime leaves bruises

30 Jan 2017

The Russian group's jump in 2015 earnings shows protecting corporate clients from hacking is a growth industry. Post-U.S. election, it should be in line for a further spurt. Yet the arrest of one of its experts by Moscow suggests reputational risk is its real challenge.

Hong Kong suit leaves Hanergy riddle unsolved

24 Jan 2017

Hong Kong regulators want to ban executives at scandal-hit Hanergy from management for up to 15 years for malfeasance. The move is welcome. But it doesn't solve the riddle of how it built a $40 bln market cap, then bombed. A firmer hand would do more to restore investor trust.

Samsung leads Elliott outside its comfort zone

19 Jan 2017

A graft scandal and ongoing probe of heir Jay Y. Lee cast uncertainty over the U.S. fund's second big showdown in South Korea. Elliott wants to restructure Samsung Electronics, where it has a $1.2 bln stake. But the activist may now have limited power to influence the outcome.

Samsung arrest spells trouble for Korea’s chaebol

16 Jan 2017

Prosecutors are seeking an arrest warrant for heir Jay Y. Lee. It could disrupt a long-running succession plan for South Korea's biggest group. By rattling a conglomerate that drives national fortunes, Seoul raises hopes that real corporate reform could come thick and fast.

Brexit could derail UK’s anti-corruption push

6 Jan 2017

Britain's keenly awaited anti-graft strategy has been delayed. The UK had looked to be making headway in reducing the billions of pounds laundered through London. The risk is this gets lost in the rush to quit the EU - or even that UK shadiness is seen as worth clinging to.

Volkswagen’s legal risk is rising in two ways

5 Jan 2017

U.S. investors can sue the German carmaker for Dieselgate damages on their home soil, a domestic judge has ruled. The first problem: VW’s 8 bln euros of unprovisioned legal liabilities will go up. The second: American litigation may have a lower bar to success than in Germany.

Bank fine-fighting begins to have some logic

5 Jan 2017

Barclays is battling U.S. authorities over charges it mis-sold mortgage bonds. UBS has contested accusations it aided tax evasion in France. With fewer outstanding legal bills and regulators habitually levying huge penalties, lenders have more to gain from pushing back.

Korea scandal shows risk of pension giant

29 Dec 2016

Prosecutors detained the head of South Korea's $450 bln pension fund over suspicion that it voted for a Samsung merger under government pressure. The case highlights how the country's largest investor could be manipulated at shareholders' expense. Korea could use a safeguard.

Deutsche wins biggest in U.S. regulatory casino

23 Dec 2016

The German bank can weather a $7.2 bln hit for mortgage bond mis-selling. Credit Suisse's settlement means it and Deutsche now have similar capital ratios, but the latter had more to lose. Barclays' lack of a deal reflects its pluck - but possibly a bigger balance sheet thwack.

Nokia’s new patents war dials up disappointment

22 Dec 2016

The Finnish group is countersuing Apple for patent abuse after antitrust accusations. Recent cost cuts have boosted Nokia's margins, but drawn-out lawsuits could hurt a business that is a third of operating profit. With network sales weak ahead of 5G adoption, it's a bad signal.

South African debt will be downgraded before Zuma

21 Dec 2016

After legal and political setbacks, the country’s president is more vulnerable than ever. Yet Jacob Zuma’s power base makes removing him difficult. The longer he clings to office, the bigger the chance that South Africa loses its investment-grade credit rating in 2017.

Turkey-Russia pact can survive Ankara flashpoint

20 Dec 2016

Moscow’s ambassador in the Turkish capital has been shot dead by a policeman seeking revenge for Aleppo. In 2015, Recep Tayyip Erdogan and Vladimir Putin were at loggerheads. Now mutual self-interest over Syria and a perceived common enemy mean the shock can be smoothed over.

Hot Platinum returns turn into alleged fool’s gold

19 Dec 2016

U.S. prosecutors arrested top executives of Platinum Partners on fraud charges. The $1.7 bln hedge-fund firm posted years of outsized gains on illiquid investments before seeking bankruptcy protection for two funds in October. Like Madoff, the case screams caveat emptor.

Abject RBS gives handy $1 bln show of legal pluck

5 Dec 2016

The UK bank's deal with three out of five groups suing over a 2008 rights issue comes after stress tests branded it class dunce. RBS already has the 800 mln pounds offered. Although holdouts should still go to court, it's a timely reminder that the worst may not materialise.

Presidential scandal can spur reform at Korea Inc

24 Nov 2016

Popular fury over a corruption scandal in South Korea could give President Park Geun-hye’s successor a mandate for sweeping political and corporate changes. For investors, that could mean better governance at the likes of Samsung – and a revaluation of Seoul-listed shares.

Review: Hubris opens door to white-collar crime

11 Nov 2016

In "Why They Do It," Harvard professor Eugene Soltes seeks to find out what propels executives like Bernie Madoff to do wrong. Each culprit has their own particular story. The clubby and entitled atmosphere of executive culture, however, is a common catalyst for bad behavior.