Business Crimes Hotline

New York

Required Code of Conduct Condition of Resolution in Student Lending Investigation

The New York and Florida Attorney General's Offices jointly entered into an Assurance of Discontinuance Agreement with another student lender, this time a Florida-based company having agreements with approximately 63 colleges and universities. While the company did not admit, and in fact expressly denied, any violation of law, the agreement calls for the institution of a detailed code of conduct resulting in the discontinuation of certain marketing practices, referral techniques and business relationships with universities and/or university athletic departments, as well as continued cooperation with the on-going investigation. According to the New York Attorney General's Office, this investigation has resulted in
previous agreements with twelve other student loan companies. See Attorneys General of New York and Florida, Assurance of Discontinuance Agreement, In the matter of Student Fin. Servs., et al., Dec. 11, 2007 (available at http://www.oag.state.ny.us/ press/2007/dec/SFS%20AOD%20FINAL%20EXECUTED.pdf); see also, Press Release, Office of the New York State Attorney General, Cuomo Establishes New Code of Conduct to Prevent False and Misleading Direct Marketing of Student Loans, Dec. 11, 2007 (available at http://www.oag.state.ny.us/press/2007/dec/dec11b07.html).

Oregon

Individual Enforcement Actions a Priority in FCPA Prosecution

Over a year after Schnitzer Steel paid in excess of $15 million to resolve concurrent FCPA, DOJ and SEC enforcement actions, the Commission reminds executives that a corporate settlement can be just the beginning. On Dec. 13, 2007, the former Schnitzer Chairman and CEO resolved a Commission Section 13 enforcement action, and agreed to pay $169,863.79 in disgorgement, over $16,000 in prejudgment interest, as well as a $75,000 civil penalty. Compl. SEC v. Robert W. Philip, No. CV 07-1836 (MO) (D. Or. Dec. 13, 2007); SEC v. Robert W. Philip, Litigation Release No. 20397 (Dec. 13, 2007) (available at http://www.sec. gov/itigation/litreleases/2007/lr20397. htm).

International: Germany

European Enforcement

Gets Tough

A joint investigation into allegations of corruption and bribery by the Munich Office of Public Prosecution and Germany tax authorities ended this fall with the imposition of a 201- million euro fine and 179-million euro tax charge against Siemens AG. Siemens accepted the settlement as imposed by the Munich District Court and waived its right to appeal. This settlement does not include the potential U.S. charges that may result from the company's continuing internal investigation and disclosures to U.S. authorities. See Press Release, Siemens AG Investor Relations, Ad-hoc Announcement According to ' 15 WpHG (Securities Trading Act), Oct. 4, 2007 (available at http://w1.siemens. com/pool/en/investor_relations/financial_publications/ad_hoc_announcements/071004_siemens_ad_hoc_mes sage_com_settlement_e_1464784.pdf).

Florida

SEC and FBI Join Forces in Kickback Sting Operation

The U.S. Attorney's Office for the Southern District of Florida, FBI and the SEC joined forces in a recent sting operation targeting illegal kickbacks to hedge fund managers. Authorities used an under cover FBI agent, posing as a hedge fund manager to gather evidence in the matter, which has resulted in five indictments, and five Commission complaints. Defedants are alleged to have violated securities laws, including Section 17(a)(1) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Indictments include securities fraud, wire fraud and mail fraud allegations. See Compl. SEC v. Vincent Cammarata, No. 07-81163- KAM (S.D.F.L. Dec. 7, 2007); Compl. SEC v. William L. Haynes, No. 07-81165-DMM (S.D.F.L. Dec. 7, 2007); Compl. SEC v. Mark Foglia, No. 07-81162 -DMM (S.D.F.L. Dec. 7, 2007); Compl. SEC v. Virgil G. Williams, No. 07-81161-WJZ (S.D.F.L. Dec. 7, 2007); Compl. SEC v. Sean P. Sheehan, No. 07-81164-KAM (S.D.F.L. Dec. 7, 2007); see, e.g., Indictment, U.S. v. Gjonbalaj and Haynes, 07-CR-80177-KLR, (S.D.F.L. Dec. 4, 2007); Indictment, U.S. v. Folgia, 07-CR-80178-KLR, (S.D.F.L. Dec. 4, 2007); Indictment, U.S. v. Williams, 07-CR-80180-KLR, (S.D.F.L. Dec. 4, 2007).

New York

Required Code of Conduct Condition of Resolution in Student Lending Investigation

The New York and Florida Attorney General's Offices jointly entered into an Assurance of Discontinuance Agreement with another student lender, this time a Florida-based company having agreements with approximately 63 colleges and universities. While the company did not admit, and in fact expressly denied, any violation of law, the agreement calls for the institution of a detailed code of conduct resulting in the discontinuation of certain marketing practices, referral techniques and business relationships with universities and/or university athletic departments, as well as continued cooperation with the on-going investigation. According to the New York Attorney General's Office, this investigation has resulted in
previous agreements with twelve other student loan companies. See Attorneys General of New York and Florida, Assurance of Discontinuance Agreement, In the matter of Student Fin. Servs., et al., Dec. 11, 2007 (available at http://www.oag.state.ny.us/ press/2007/dec/SFS%20AOD%20FINAL%20EXECUTED.pdf); see also, Press Release, Office of the New York State Attorney General, Cuomo Establishes New Code of Conduct to Prevent False and Misleading Direct Marketing of Student Loans, Dec. 11, 2007 (available at http://www.oag.state.ny.us/press/2007/dec/dec11b07.html).

Oregon

Individual Enforcement Actions a Priority in FCPA Prosecution

Over a year after Schnitzer Steel paid in excess of $15 million to resolve concurrent FCPA, DOJ and SEC enforcement actions, the Commission reminds executives that a corporate settlement can be just the beginning. On Dec. 13, 2007, the former Schnitzer Chairman and CEO resolved a Commission Section 13 enforcement action, and agreed to pay $169,863.79 in disgorgement, over $16,000 in prejudgment interest, as well as a $75,000 civil penalty. Compl. SEC v. Robert W. Philip, No. CV 07-1836 (MO) (D. Or. Dec. 13, 2007); SEC v. Robert W. Philip, Litigation Release No. 20397 (Dec. 13, 2007) (available at http://www.sec. gov/itigation/litreleases/2007/lr20397. htm).

International: Germany

European Enforcement

Gets Tough

A joint investigation into allegations of corruption and bribery by the Munich Office of Public Prosecution and Germany tax authorities ended this fall with the imposition of a 201- million euro fine and 179-million euro tax charge against Siemens AG. Siemens accepted the settlement as imposed by the Munich District Court and waived its right to appeal. This settlement does not include the potential U.S. charges that may result from the company's continuing internal investigation and disclosures to U.S. authorities. See Press Release, Siemens AG Investor Relations, Ad-hoc Announcement According to ' 15 WpHG (Securities Trading Act), Oct. 4, 2007 (available at http://w1.siemens. com/pool/en/investor_relations/financial_publications/ad_hoc_announcements/071004_siemens_ad_hoc_mes sage_com_settlement_e_1464784.pdf).