Stock options backdating rules
These are the identified priority crime problem areas of the Financial Crimes Section (FCS) of the FBI.
The mission of the FCS is to oversee the investigation of financial fraud, and to facilitate the forfeiture of assets from those engaging in federal crimes.
In addition, before these companies’ stocks rapidly declined in value, executives with insider information sold their equity positions and profited illegally. However, the current financial crisis resulted in the exposure of several large Ponzi schemes perpetrated not on an individual community level, but on a corporate national level by executives of what were once considered legitimate investment brokerages, i.e., Bernard L. Corporate fraud remains the highest priority of the Financial Crimes Section and the FBI is committed to dealing with this significant crime problem.
As of the end of FY 2008, 545 corporate fraud cases are being pursued by FBI field offices throughout the U.
The FBI has placed greater emphasis on investigating allegations of these frauds by working closely with the SEC, Financial Industry Regulation Authority, Internal Revenue Service (IRS), Department of Labor, Federal Energy Regulatory Commission, Commodity Futures Trading Commission, and U. The FBI has also worked with numerous organizations in the private industry to increase public awareness about combating corporate fraud, to include: Public Company Accounting Oversight Board, American Institute of Certified Public Accountants, and the North American Securities Administrator’s Association, Inc.
These organizations have been able to provide referrals for expert witnesses and other technical assistance regarding accounting and securities issues.
The Health Care Fraud Unit oversees investigations targeting individuals and/or organizations who are defrauding public and private health care systems.
Areas investigated under health care fraud include: billing for services not rendered, billing for a higher reimbursable service than performed (upcoding), performing unnecessary services, kickbacks, unbundling of tests and services to generate higher fees, durable medical equipment fraud, pharmaceutical drug diversion, outpatient surgery fraud, and Internet pharmacy sales.
Although the FSP’s mission is closely tied to that of AF/MLU, it does have a separate mission statement which is documented as follows: The mission of the FSP is to support the forfeiture component of all major FBI investigations through data entry and analysis of financial documents, forensic accounting, and tracing assets subject to forfeiture.
In fiscal year (FY) 2009, the FCS is comprised of the Asset Forfeiture/Money Laundering Unit, the Economic Crimes Unit, the Health Care Fraud Unit, and the National Mortgage Fraud Team.
The Economic Crimes Unit is responsible for significant frauds targeted against individuals, businesses, and industries to include: corporate fraud, insurance fraud (non-health care related), securities and commodities fraud, mass marketing fraud, telemarketing fraud, high yield investment schemes, Ponzi schemes, advance fees schemes, and pyramid schemes.
Through the manipulation of financial data, the share price of a corporation remains artificially inflated based on fictitious performance indicators provided to the investing public. While the number of cases involving the falsification of financial information remains relatively stable, the FBI has recently observed a spike in the number of corporate fraud cases involving sub prime lending institutions, brokerage houses, home building firms, hedge funds, and financial institutions, as a result of the financial crisis partly caused by the collapse of the sub-prime market in the fall of 2007.
In addition to significant financial losses to investors, corporate fraud has the potential to cause immeasurable damage to the U. As a result of the current financial crisis, trillions of dollars in shareholder value has been lost; several prominent companies, i.e., Lehman Brothers, have gone out of business; several prominent banks, i.e., Indy Mac Bank and Washington Mutual, have failed; and the federal government has provided over a trillion dollars in relief to keep other companies from failing, i.e., American Insurance Group, General Motors, and Citi Group.