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Archive for September, 2011


SEC Charges NY Hedge Fund Manager

The Securities and Exchange Commission accused New York hedge-fund manager Corey Ribotsky and his firm of hiding losses and spending investors’ money on luxuries such as cars and a Rolex watch.

Mr. Ribotsky’s firm, NIR Group LLC, invested through so-called PIPE transactions, or private investment in public equity, which often involve deals with small companies desperate for cash. According to an SEC complaint filed Wednesday in U.S. District Court in New York, Mr. Ribotsky from 2004 to 2009 misappropriated more than $1 million in assets, at times writing checks to himself and telling employees to cash them for him.

Mr. Ribotsky, 40 years old, also made “false and misleading statements” to investors in 2007, 2008 and 2009 about his funds’ performance and ability to sell assets to raise cash, according to the SEC complaint. The hedge funds in question reported holding as much as $876 million in assets.

SEC Finds Failures at Credit Rating Firms

Securities and Exchange Commission staff found “apparent failures” at each of the 10 credit rating agencies they examined, including Standard & Poor’s, Moody’s, and Fitch, the agency said on Friday in its first annual report on credit raters.

The SEC sent letters outlining the staff’s concerns to each of the ratings firms and demanded a remediation plan with 30 days, an agency official said in a conference call with reporters.

The SEC staff said concerns include failures to follow ratings methodologies, failures in making timely and accurate disclosures and failures to manage conflicts of interest.

The SEC’s report was required by last year’s Dodd-Frank financial oversight law.

The staff report did not single out by name any credit-rating agency for questionable actions, but it did describe specific problems it found.

Two of the three largest firms, for example, did not have specific policies in place to manage conflicts of interest when rating an offering from an issuer who is also a large shareholder of the firm.

The industry is dominated by Moody’s Corp, Standard & Poor and Fitch.

One of the large firms, the report said, did not have effective procedures in place to prevent leaks of ratings before they are published, the report said.

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