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Dell financing arm finds deficiencies
Securities | 2007/04/04 08:11

Dell Financial Services (DFS) has found and reported several operational deficiencies in its business, including the way it has posted customer payments, collected on delinquent accounts and failed to reconcile some accounts on a timely basis, according to filings with the Securities and Exchange Commission by the company's primary financing partner.

The report filed by CIT Group's collateral unit, which has funded some DFS operations, is among the first under new, more stringent rules enacted by the SEC that are designed to provide greater detail to investors in asset-backed securities, securities that provide cash for many credit and leasing operations.

The items spelled out do not involve accounting issues.

Gavan Goss, DFS' chief financial officer, told CRN the issues involved have either been fixed or are in the process of being fixed.

DFS is a joint venture between Dell and CIT Group and has become Dell's US$6 billion-a-year financing arm. According to CIT Group's disclosure, DFS fell short of complying with its role under the financing terms in a US$1 billion asset-backed securitization sale, including the following:

A failure to make sure its third-party "lockbox vendors" - like banks - completely and accurately met compliance reporting requirements. DFS reported this as a "material deficiency" in this aspect of its operation, according to the CIT filing.

DFS reported "certain loss mitigation or recovery actions that were not initiated, conducted or concluded in accordance with the required time frames established under the transaction agreement," according to the CIT disclosure.

DFS took more than an allotted 90 days to reconcile certain accounts last year.

Through the middle of last year, DFS had about US$6 billion in assets under management, and the unit has become strategic to Dell's long-term plans. In addition to providing credit and financing so customers can buy its products, Dell executives have said DFS offers a competitive advantage to rivals because it gives the company an ongoing touch point with customers during the life of a product or a financing agreement.

As of Dell's most recent financial reports last year, computer and service sales through DFS accounted for more than 10 percent of Dell's total revenue. And while Dell owns 70 percent of the joint venture with CIT, it has an agreement to buy the rest of DFS outright as early as next year.

DFS executives told financial analysts in a teleconference last year that about half of its financing activity was conducted with commercial customers, and about half through consumers.



Rubin CEO Pleads Guilty to Securities Fraud
Securities | 2007/03/29 09:47

The chief executive of investment bank Rubin Investment Group pleaded guilty to securities fraud in connection with the acquisition and sale of shares of small-cap companies, U.S. prosecutors said on Thursday.

Dan Rubin, who was also the CEO of attorney referral service 1-800-ATTORNEY Inc., agreed to forfeit $2 million and pleaded guilty in a federal court on Wednesday, making it the final plea by the senior management of the investment bank that once had offices in Los Angeles, Manhattan and Florida, the U.S. Attorney's Office in Brooklyn said in a statement.

Three other former employees of the firm have already pleaded guilty to securities and conspiracy charges. Each defendant faces a maximum sentence of 25 years, prosecutors said.

Under Rubin's direction, a group of employees at 1-800-ATTORNEY induced several companies, or their big shareholders, to sell large blocks of stock to Rubin Investment Group at discounted prices, the prosecutors said.


After acquiring stock from dozens of small-cap public companies, Rubin sold the stock in the open market at a substantial profit, while simultaneously driving down the price of the stock, prosecutors said.

The fraudulent acquisition and sale of shares occurred between August 2002 and October 2003, prosecutors said.

Rubin admitted that he told his staff to promise the small-cap companies that he would recommend their stock to Rubin Investment Group's investors and that he would not sell their stock in the open market, prosecutors said.

"The defendants profited by victimizing small, publicly-held companies and the investing public," U.S. Attorney Roslynn Mauskopf said.



Mark Tepper Retains NewsMark PR for Fraud Campaign
Securities | 2007/03/26 09:53
FL, March 26 - As a key contributor to the enforcement of investors' statutory rights under provisions of the Florida Investor Protection Act, Securities Fraud Attorney Mark Tepper has retained NewsMark Public Relations to underscore his campaign against abusive broker sale practices.

Tepper, a former New York Assistant Attorney General and Chief Trial Counsel at the Bureau of Investor Protection and Securities, representing the interests of investors in criminal and civil actions in over 30 years of practicing law, has completed examination of a five-year survey of Florida Arbitration Awards.

An author of numerous articles on securities arbitration, his findings, the latest in his efforts to determine whether Florida arbitrators have enforced the statutory rights provided to investment fraud victims, will be published next month in the PIABA Bar Journal of the Public Investors Arbitration Bar Association. "I'm appalled by the staggering percentage of times, over the years of the study that investors failed to reap full benefits of the excellent provisions of the Florida Investor Protection Act." Tepper said.

"Attorney Mark Tepper brings an integrity and passion to his mission to protect investors who have been victimized by aggressive broker sale tactics. We're considering a number of speaking platforms where he can share his invaluable legal insights with individual investors who feel their portfolios have been mishandled," said NewsMark CEO Mark Hopkinson. About Mark Tepper PA (http://www.MarkTepper.com)

Practicing law for over 30 years while representing the interests of investors in criminal and civil actions, attorney Mark Tepper has earned a reputation as "Investor Advocate." His clients include investors facing the sometimes volatile risks presented by financial products known as Collateralized Mortgage Obligations (CMOs) - a type of mortgage-backed security that in spite of AAA ratings or government guarantees, are not protected against interest rate risk. An elected Board Director of the Public Investors Arbitration Bar Association (PIABA) he is a former New York Assistant Attorney General and Chief Trial Counsel at the Bureau of Investor Protection and Securities. He has authored numerous legal articles on securities arbitration and lectured before the North American Securities Administrators Association (NASAA) which has presented him with an 'Outstanding Service Award.'

He addresses professional associations, local clubs and financial organizations in South Florida in an effort to educate the public on securities fraud. A member of the Florida, New York and California Bars he is AV(R)-rated, the highest rating of lawyers in the Martindale- Hubbell Law Directory.


Second Amendment Used to Dump Gun Law
Securities | 2007/03/18 09:16

Judge Laurence H. Silberman has written a landmark legal decision using the Second Amendment to overturn the DC gun ban. No court has ever used the Second Amendment to overthrow a gun law. The case is known as Parker v. District of Columbia.

With the overturn of the DC gun ban, the very restrictive law on the books before the 1976 ban is once again the law in D.C. But, people can at least once again buy a handgun and keep it in their house.

Judge Silberman’s decision provides a platform for the next challenge to other anti-gun laws in the District. No doubt that is what especially troubles the socialist politicians of the District. The thought of citizens empowered to protect themselves and not having to rely on the ineffective protection offered by the government terrorizes them.

Think about it – if people can protect themselves, they might start thinking for themselves. Isn’t that what is “wrong” with flyover country?

These are some of the highlights of the decision:

“[t]he Second Amendment protects an individual right to keep and bear arms.”

“The individual right facilitated militia service by ensuring that citizens would not be barred from keeping the arms they would need when called forth for militia duty.”

“Despite the importance of the Second Amendment’s civic purpose, however, the activities it protects are not limited to militia service, nor is an individual’s enjoyment of the right contingent upon his or her continued or intermittent enrollment in the militia.”
“With ‘a free State,’ we understand the framers to have been referring to republican government generally.”

“[t]he bar on carrying a pistol within the home [and the requirement to keep it disassembled] amounts to a complete prohibition on the lawful use of handguns for self-defense. As such, we hold it unconstitutional.”

Let me go back and expand on a couple of points in the list above. Silberman showed that the militia was compulsory, requiring men to enroll much as the Selective Service had men register for the draft. Fines were assessed on those who did NOT have their own militia guns, ammunition for them, and keep them in good repair. House to house searches were even conducted to insure that individuals were keeping, and thus able to bear, arms.

The word “state” in the Second Amendment is found this way: “A well-regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.” “State” was the word seized upon by anti-gunners to develop a novel theory (in the latter part of the 20th Century) that militias, and thus gun ownership, were strictly a matter of state privilege. Silberman showed that the founders’ use of the term “free State” was a reference to preserving limited, constitutional government – otherwise known as a republican form of government.

In other words, individual gun ownership was seen as essential to preserving individual liberty. Government is not, and was not, the source of those liberties because they predated the creation of the United States by its Constitution.

Justice Silberman is owed a debt of thanks from all Americans, because his opinion has gone a long way to clearing away the confusion around gun ownership and placing it in the proper context: no guns, no freedom.

It should be pointed out that all Silberman’s decision could do was throw out the DC gun ban of 1976. That was all the plaintiffs were able to challenge in court. However, all the prior registration and licensing laws are now fair game for challenge on the grounds that they also violate – “infringe,” to use the Second Amendment word – the individual right to keep and bear arms.

Congress has – and has had all along – the constitutional responsibility for legislation in DC. They can delegate that to the DC City Council, but they cannot remove themselves from the constitutional requirement that they be the final authority for legislation governing the federal enclave.

The elitists in DC are hardly likely to want to clean up the rest of their anti-gun, anti-self defense mess that is still on the books following the Parker decision. Their priorities can be clearly seen by contrasting their reaction to two events.

DC officials are outraged by the Parker decision. They are accusing the justices of judicial activism. The way to understand their double speak is this: A (rare) decision base on and upholding a constitutional principal is viewed by the socialists as activism. A liberal decision that assumes that judges can amend a “living” constitution is “settled law.”

Those same DC officials were totally unconcerned, however, when plaintiff Shelly Parker was being attacked in her home. She wanted to sue the District to get rid of the handgun ban because drug dealers in her neighborhood had tried to break into her home. When they did, one of them shouted: “I will kill you! And I live on this block, too.” Perhaps DC officials are afraid that the thug might have been shot if Ms. Parker had a gun?

It seems more than our elite rulers can understand. They have 24/7 police protection – armed police protection. They experience no crime problem. So, why should the rest of us need a gun?

Since the DC officials are not likely to “get it” regarding the problem the rest of us have with crime, Congress needs to step up to the plate and exercise its constitutional responsibility. Congress should get rid of the pre-ban gun control laws in DC and legislate a concealed carry law similar to the one in neighboring Virginia. I would like to see there be no permit required at all, as is the case now in Vermont and Alaska, but at least a fairly workable law such as Virginia’s would be a big step forward.

If DC residents could legally carry concealed firearms (the way crooks are already doing illegally), watch for crime to plummet. The only people who would really suffer from getting rid of the rest of DC’s gun laws would be the crooks.

Well, there would be some gnashing of teeth heard from City Hall, too.



SEC Sues 21 Year Old For Online Securities Fraud
Securities | 2007/01/27 07:37
The United States Securities and Exchange Commission today filed a complaint in the United States District Court for the Middle District of Florida charging twenty-one year old Aleksey Kamardin with participating in a fraudulent scheme to manipulate the prices of numerous stocks through the unauthorized use of other people’s online brokerage accounts.

The complaint alleges that between July 13 and August 25, 2006, Kamardin, or others acting in concert, commandeered the online trading accounts of unwitting investors at various broker-dealers, liquidated existing equity positions and, using the resulting proceeds, purchased thinly traded stocks in order to create the appearance of trading activity and pump up the price of the stocks. The complaint further alleges that in seventeen instances, Kamardin, in his own account, bought shares in the thinly traded issuer just prior to or at the same time that compromised accounts were made to buy shares, creating the false appearance of market activity. Shortly after the intrusions, Kamardin sold all of his shares at the inflated prices. In all but three of these instances, Kamardin realized a profit from his trading, netting a total profit of $82,960.

The Commission’s action charges Kamardin with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctive relief, disgorgement and civil money penalties.

The SEC’s Office of Investor Education and Assistance has previously issued an investor alert, available on the SEC’s website, which provides tips for avoiding becoming a victim of an online intrusion.

See http://www.sec.gov/investor/pubs/onlinebrokerage.htm.


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