by T. GormanPosted on Posted in SECActions

It was the night before Christmas – well almost – and all the Wall Street players were tucked in their beds. Each was dreaming of what Santa might bring when he slides down the chimney and fills their stocking. Each had written Santa about how good they were and what the jolly old man could bring as a reward.

Santa of course never tells what is in the thousands of letters he receives each year. The Santa – recipient privilege is the best! Since knowing what Santa might bring could give a glimpse of next year, many are looking for insights. Those may be available from some elves who moonlighted in Washington last summer and learned about “leaks” and “unnamed sources.” Those elves met late last night and made available a few fragments of letters from Wall Street players:

Dear Santa,

I have been really good this year – and I mean really good. I wrote more rules than anyone could have imagined. We now have a rule for everything, anything and a couple for nothing. There are so many my enforcement director created a new specialty group devoted just to enforcing them. It is the “new rules” group. And, to be extra good I made sure they are printed on both sides of the page on 100% recycled paper!!! Now I just have one small request — just twelve months with no scandals. This is not for me. It is for my spin staff. They have done a great job. Just look at that Rakoff thing. A potential PR debacle. Just as it broke however they released that letter to Congress about bigger penalties. The media jumped right on it, although you and I both know it had nothing to do with Rakoff. But the spin staff needs a break Santa so please, just one scandal free year. Your biggest fan. Mary Schapiro, SEC Chairman.

. . . and Santa I have been very good. I brought more enforcement actions than anyone. How good is that!!! That reorganization you brought me is doing the job. I just need one little thing this year Santa. You know that wheel in the clerk’s office in the Southern District of New York? As it goes around could you have one of the elves put his thumb on it so it goes by Judge Rakoff? I know, I know you do not usually rig the game but gee, this Judge is well . . . it is been difficult. So please, just a little help here. Your friend, Rob Khuzami, Director, SEC Enforcement Division.

. . . . I have supported the boss 110%, just what a deputy does Santa. Now I am moving on to a big new job in the U.S. Attorney’s Office in Manhattan. I really do appreciate your help with that!! But here is the thing. This new job, well my predecessor has done everything. He caught the biggest of the big insider traders. I can’t figure out how I am going to do better. I thought about wire taps but they already bugged every trader on Wall Street! So maybe you could just point me in the direction of the next headline grabbing Wall Street scandal so I can stomp it out. I know you have great insights and this would be a good thing because I can help clean up that nasty Wall Street place. Thanks Santa, I know you will help me out. Lorin Reisner, former Deputy Director, SEC Enforcement, about to be Chief, Securities and Commodities Fraud Section, U.S. Attorney’s Office, Southern District of New York.

Dear Santa,

What you brought me last year was just great. You got me everything I asked for and more. Now I have jurisdiction over every derivative those guys on Wall Street create. I have just one request for this year – STAFF!!! I need someone to write the rules and enforce them. You know when I was at Goldman this was easy. I could make people work all night and all weekend and then send them home in a fancy car service cars and on vacation on Net Jets. But this is the government. I can’t do that. Last time my staff went to New York they had to ride the buss (Imagine those guys at Goldman doing that!). I need some help here Santa so please, a few new staff members!! Your best friend, Gary Gensler, Chairman, CFTC.

. . .. and yes we are doing just fine. We wanted profits and you helped us get them. We don’t quite know what the elves but it worked and we appreciate it. Just one little thing Santa – could you get the SEC to stop writing rules, even for just a few hours. Sure that loophole kit you gave us last year is working great. Not only have we created loopholes, we even have loopholes in the loopholes! But still, we are having trouble keeping up. Please, just a few hours off. Devotedly yours, The Wall Street Bankers Association.

And, so with visions of full stockings dancing in their heads, all the players on Wall Street fell fast asleep in their beds. Good nite to all!!

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by T. GormanPosted on Posted in SECActions

p>Aon Corporation, one of the largest insurance brokerage firms in the world, resolved FCPA charges with the Department of Justice and the Securities and Exchange Commission. The firm entered into a non-prosecution agreement with the DOJ. In connection with that agreement, the company admitted that its books and records did not accurately reflect the purpose of certain expenses and that it failed to devise an adequate system of internal controls as they relate to its foreign sales activities. Under the terms of the agreement the company will pay a $1.76 million criminal fine and adhere to rigorous compliance and internal control procedures.

The firm also settled with the SEC. Publically traded Aon consented to the entry of a permanent injunction prohibiting future violations of Exchange Act Sections 13(b)(2)(A) and 13(b)(2)(B) without admitting or denying the allegations in the complaint except as to jurisdiction. The firm also agreed to pay disgorgement of $11,416,814 along with prejudgment interest. SEC v. Aon Corporation, Civil Action No. 1:11-cv-02256 (D.D.C. Filed Dec. 20, 2011). Aon also paid a fine in the amount of ₤5.25 million to the UK’s Financial Services Authority.

The criminal investigation focused on payments made between 1997 and 2005 by Aon Limited, the firm’s United Kingdom subsidiary. That subsidiary administered certain training and education funds in connection with its reinsurance business with Instuto Nacional De Seguros or INS, Costa Rica’s state-owned insurance company. The supposed purpose of the payments was for the education and training of INS employees. In fact, significant portions of the money were used for other purposes, according to the DOJ. Those included travel with spouses to overseas tourist locations or for purposes which could not be determined. Many of the invoices did not specify a legitimate business purpose for the expenditure.

The Commission’s complaint focuses on the payments made in Costa Rica as well as those in Egypt, Vietnam, Indonesia, United Arab Emirates, Myanmar and Bangladesh. According to the SEC, a total of $3.6 million in improper payments were made by subsidiaries of the firm between 1983 and 2007. All of the payments were to either those who could award business or were in a position to influence others who could award business. The payments were made for travel and entertainment and to third-party facilitators.

The settlement in the criminal investigation is based on what criminal prosecutors termed the “extraordinary” cooperation of the firm with the DOJ and the SEC. That cooperation included timely and complete disclosure of the improper payments in Costa Rica. It also included disclosure of other improper payments discovered during a thorough investigation of Aon’s global operations. In addition, the DOJ considered the early and extensive remedial efforts taken by the firm as well as the fine paid to the SFA in the United Kingdom. The SEC did not disclose the predicate for its settlement.

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