Story first appeared in Bloomberg.
Kenneth Lay, the deceased chief executive officer of Enron Corp., defeated the Internal Revenue Service in the agency’s bid to collect $3.9 million from his estate and his wife, the U.S. Tax Court ruled.
The case decided yesterday involved transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to Lay if he worked a 4.25-year term. The company didn’t survive that long, and it filed for bankruptcy protection in December 2001.
The IRS contested the Lays’ contention that the annuities were sold to Enron for no gain, according to the Tax Court decision by Judge Joseph Goeke. In 2009, the IRS filed a notice of tax deficiency for $3.9 million, arguing that the Lays should have reported the $10 million as income in 2001. Instead, they reported that they sold the annuities to Enron at their cost basis, generating no taxable income.
Goeke wrote in the decision that the agency’s position was incorrect, and he ruled for Linda Lay and for Kenneth Lay’s estate. The transactions, he wrote, were legitimate, and neither of the Lays nor the estate received any distributions or death benefit from the annuity.
He said the annuities transaction is well documented, and all actions of the parties to the transaction reflect that Enron purchased the annuity contracts for $10 million, and the Lays properly reported the transaction on their 2001 tax return as a sale of the annuity contracts.
Tax Dispute
Charles Egerton, the attorney who represented the estate and Linda Lay in the tax case, said in a telephone interview today that the dispute over the annuity lingered after other issues regarding the Lays’ taxes were resolved. He described his client as delighted.
Lay, who died in 2006 at age 64, was convicted in May 2006 by a federal jury in Houston. He and the company’s former CEO, Jeffrey Skilling, were found guilty of deceiving shareholders about Enron’s financial condition by hiding debt and losses in a series of off balance-sheet entities.
More than 5,000 jobs and $1 billion in employee retirement funds were wiped out when the world’s largest energy trading company plunged into bankruptcy, following revelations of widespread accounting fraud.
Conviction Thrown Out
Lay’s convictions were later thrown out because he didn’t have a chance to appeal the cases before he died.
Enron’s creditors, the government, Lay’s estate and Linda Lay have been involved in a variety of lawsuits since the company’s demise.
The U.S government continues to pursue a $12.6 million civil forfeiture case against Linda Lay, which was initiated three months after her husband’s death. The Justice Department sued to recover $10.1 million from a family investment partnership, as well as $22,680 in cash and at least $2.5 million from the couple’s penthouse condominium in Houston.
Linda Lay has been trying to sell the 12,827-square-foot, Italian Renaissance-inspired condo unit since 2009. The property is now priced at $7.99 million, according to a Houston real estate-listings website, a significant increase from the $4.75 million valuation it carried on local tax rolls in 2007, the year after Ken Lay died.
Alisa Fanelli, a Justice Department spokeswoman, didn’t immediately respond to a request for the status of the government’s forfeiture case against Linda Lay.
‘Criminal Proceeds’
The government claims Lay derived more than $95 million in criminal proceeds from trading Enron stock, manipulating his Enron line of credit and receiving an incentive bonus as the company was spiraling into insolvency, according to court filings in the forfeiture case.
An FBI agent who investigated Lay claimed Enron’s founder paid off the remainder of his Houston mortgage with million- dollar payments of criminal proceeds less than a week after Enron’s bankruptcy.
Tuesday, September 6, 2011
New Reporting For Counterfeit Goods
Story first appeared in Bloomberg News.
The State of Mississippi, through the Office of the Attorney General, has set up a website that is part of a campaign against counterfeit goods.
The website for the Mississippi Intellectual Property Crime Center -- mipcc.ago.state.ms.us/ -- was established with the assistance of a grant from the U.s. Department of Justice. Aim of the site is to inform the public about IP crimes and their effects on the world.
The site has a section on fakes, with photos of counterfeit goods. It also provides citizens with a place to which they can give anonymous tips about sale of possible counterfeit items.
According to the Mississippi Intellectual Property Crime Center, the sale of counterfeit goods can be linked to drug trafficking, organized crime, terrorist activity, gang violence, child labor and life-threatening health issues.
Thailand, Cambodia Both Claim Dance Gesture as Cultural Icon
Both Thailand and Cambodia are laying claim to a hand gesture used in traditional dance and shadow places as an intangible culture heritage item, the Bangkok Post reported.
The gesture, known as the “jeeb” and created by touching the thumb with the index finger and splaying the other three fingers, has been registered by Cambodia with the United Nations Educational Scientific and Cultural Organization, according to the Bangkok Post.
Because it hasn’t ratified the Convention for Safeguarding Intangible Cultural Heritage allowing it to submit cultural heritage items to UNESCO for listing as cultural treasures, Thailand has, so far, only begun compiling a list, according to the Bangkok Post.
Thailand’s Culture Minister Sukumol Khunploem told the Bangkok Post that Cambodia hasn’t stolen the jeeb to claim it exclusively because it is normal for countries in the same region to share similar cultural traits.
The State of Mississippi, through the Office of the Attorney General, has set up a website that is part of a campaign against counterfeit goods.
The website for the Mississippi Intellectual Property Crime Center -- mipcc.ago.state.ms.us/ -- was established with the assistance of a grant from the U.s. Department of Justice. Aim of the site is to inform the public about IP crimes and their effects on the world.
The site has a section on fakes, with photos of counterfeit goods. It also provides citizens with a place to which they can give anonymous tips about sale of possible counterfeit items.
According to the Mississippi Intellectual Property Crime Center, the sale of counterfeit goods can be linked to drug trafficking, organized crime, terrorist activity, gang violence, child labor and life-threatening health issues.
Thailand, Cambodia Both Claim Dance Gesture as Cultural Icon
Both Thailand and Cambodia are laying claim to a hand gesture used in traditional dance and shadow places as an intangible culture heritage item, the Bangkok Post reported.
The gesture, known as the “jeeb” and created by touching the thumb with the index finger and splaying the other three fingers, has been registered by Cambodia with the United Nations Educational Scientific and Cultural Organization, according to the Bangkok Post.
Because it hasn’t ratified the Convention for Safeguarding Intangible Cultural Heritage allowing it to submit cultural heritage items to UNESCO for listing as cultural treasures, Thailand has, so far, only begun compiling a list, according to the Bangkok Post.
Thailand’s Culture Minister Sukumol Khunploem told the Bangkok Post that Cambodia hasn’t stolen the jeeb to claim it exclusively because it is normal for countries in the same region to share similar cultural traits.
Metallurgist Charged With Industrial Espionage For Getting Married
Story first appeared in Bloomberg News.
A former employee of the London-based mining company Oxus Gold Plc has been sentenced to 12 years in prison for allegedly committing industrial espionage, the Voice of America reported.
Said Ashurov, chief metallurgist at a joint venture between Oxus Gold and Uzbekistan authorities, was convicted by a military court, following his arrest in March when he was trying to cross the border into Tajikistan, according to Voice of America. A Leeds Intellectual Property Lawyer reviewed the case.
A lawyer representing Oxus Gold said the charges against Ashurov are fabricated, and the metallurgist, who has health issues, could die in prison without proper health care, Voice of American reported.
Oxus Gold ended the operation of its joint venture in March following what the BBC said were months of tensions with Uzbekistan’s authorities.
Court Says Company Can’t Fire Employee Over Marriage, and a Athens Intellectual Property Lawyer agrees.
An employment tribunal in Germany’s state of Schleswig- Holsten has told a German company that its firing of an engineer for marrying a Chinese woman wasn’t justified by the company’s fear of resulting industrial espionage, the BBC reported.
The unnamed company, a supplier for the German military, suspended the engineer for security reasons three months after his December 2009 wedding, and fired him three months after that, according to the BBC.
The court said the employer violated the employee’s right to marry the person of his choice, and the alleged security risk posed by the marriage wasn’t supported by facts, the BBC reported.
Court reports don’t identify the engineer or his company, according to the BBC.
A former employee of the London-based mining company Oxus Gold Plc has been sentenced to 12 years in prison for allegedly committing industrial espionage, the Voice of America reported.
Said Ashurov, chief metallurgist at a joint venture between Oxus Gold and Uzbekistan authorities, was convicted by a military court, following his arrest in March when he was trying to cross the border into Tajikistan, according to Voice of America. A Leeds Intellectual Property Lawyer reviewed the case.
A lawyer representing Oxus Gold said the charges against Ashurov are fabricated, and the metallurgist, who has health issues, could die in prison without proper health care, Voice of American reported.
Oxus Gold ended the operation of its joint venture in March following what the BBC said were months of tensions with Uzbekistan’s authorities.
Court Says Company Can’t Fire Employee Over Marriage, and a Athens Intellectual Property Lawyer agrees.
An employment tribunal in Germany’s state of Schleswig- Holsten has told a German company that its firing of an engineer for marrying a Chinese woman wasn’t justified by the company’s fear of resulting industrial espionage, the BBC reported.
The unnamed company, a supplier for the German military, suspended the engineer for security reasons three months after his December 2009 wedding, and fired him three months after that, according to the BBC.
The court said the employer violated the employee’s right to marry the person of his choice, and the alleged security risk posed by the marriage wasn’t supported by facts, the BBC reported.
Court reports don’t identify the engineer or his company, according to the BBC.
Sports Event Streaming Questioned
Story first appeared in Bloomberg News.
Gannett Co., owner of television stations and 82 newspapers, lost its copyright claims over streaming-video presentation of Wisconsin high school sports programs. A Nashville Intellectual Property Lawyer commented that he had not experienced a case quite like this one.
The McLean, Virginia-based newspaper chain, was appealing a ruling from a trial court in Wisconsin that found the Wisconsin Interscholastic Athletic Association’s exclusive license agreements with a video production company didn’t violate Gannett’s First Amendment rights.
The dispute arose when some Gannett newspapers decided to stream four tournament games sponsored by the Wisconsin Interscholastic Athletic Association. The association then asked the federal court to declare it had the right to grant exclusive licenses. Gannet had argued unsuccessfully that WIAA can’t enter into exclusive contract with a private company to broadcast entire events online, or, to raise revenue.
The appeals court said in its August 24 opinion that the implications of Gannett’s arguments were staggering, and that if the media company was correct, then no state actor may ever earn revenue from something that the press might want to broadcast in its entirety.
If Gannett’s arguments were carried to their logical extreme, the appeals court said the patent licensing agreements executed by the University of Wisconsin through the Wisconsin Alumni Research Foundation -- and the $1.07 billion such licenses have brought the university since 21928 could be at risk. A Mexico Intellectual Property Lawyer agrees there is risk.
Gannett’s claim here would cast a shadow over the commercial licensees that WARF sells but implying that the First Amendment required it to dedicate its inventions to the public, the court said in its opinion. Likewise, the ability of high school students to record CDs and sell them to finance a school music program would also be at risk. These examples could be multiplied almost endlessly, the court said.
The court said that reporting on the event and streaming it aren’t the same thing. Everyone understands there is a difference between a description of an event like the Super Bowl, Women’s World Cup or the College World Series and the right both to videotape that entertainment and then to publish it as one sees fit, according tohttp://www.blogger.com/img/blank.gif the appeals court’s opinion.
As far as Gannett’s copyright claim is concerned, the appeals court said that the WIAA itself is functioning as the creator and disseminator of content, not the newspapers.
The court the lower court’s holding that the WIAA has the right to grant exclusive licenses. This was also the opinion of a Shanghai Intellectual Property Lawyer.
The lower court case is Wisconsin Interscholastic Athletic Association v. Wisconsin Newspaper Association Inc., 3:09-cv-00155-WMC, U.S. District Court, Western District of Wisconsin (Madison). The appeal is Wisconsin Interscholastic Athletic Association v. Gannett, 10-2627, U.S. Court of Appeals for the Seventh Circuit.
Gannett Co., owner of television stations and 82 newspapers, lost its copyright claims over streaming-video presentation of Wisconsin high school sports programs. A Nashville Intellectual Property Lawyer commented that he had not experienced a case quite like this one.
The McLean, Virginia-based newspaper chain, was appealing a ruling from a trial court in Wisconsin that found the Wisconsin Interscholastic Athletic Association’s exclusive license agreements with a video production company didn’t violate Gannett’s First Amendment rights.
The dispute arose when some Gannett newspapers decided to stream four tournament games sponsored by the Wisconsin Interscholastic Athletic Association. The association then asked the federal court to declare it had the right to grant exclusive licenses. Gannet had argued unsuccessfully that WIAA can’t enter into exclusive contract with a private company to broadcast entire events online, or, to raise revenue.
The appeals court said in its August 24 opinion that the implications of Gannett’s arguments were staggering, and that if the media company was correct, then no state actor may ever earn revenue from something that the press might want to broadcast in its entirety.
If Gannett’s arguments were carried to their logical extreme, the appeals court said the patent licensing agreements executed by the University of Wisconsin through the Wisconsin Alumni Research Foundation -- and the $1.07 billion such licenses have brought the university since 21928 could be at risk. A Mexico Intellectual Property Lawyer agrees there is risk.
Gannett’s claim here would cast a shadow over the commercial licensees that WARF sells but implying that the First Amendment required it to dedicate its inventions to the public, the court said in its opinion. Likewise, the ability of high school students to record CDs and sell them to finance a school music program would also be at risk. These examples could be multiplied almost endlessly, the court said.
The court said that reporting on the event and streaming it aren’t the same thing. Everyone understands there is a difference between a description of an event like the Super Bowl, Women’s World Cup or the College World Series and the right both to videotape that entertainment and then to publish it as one sees fit, according tohttp://www.blogger.com/img/blank.gif the appeals court’s opinion.
As far as Gannett’s copyright claim is concerned, the appeals court said that the WIAA itself is functioning as the creator and disseminator of content, not the newspapers.
The court the lower court’s holding that the WIAA has the right to grant exclusive licenses. This was also the opinion of a Shanghai Intellectual Property Lawyer.
The lower court case is Wisconsin Interscholastic Athletic Association v. Wisconsin Newspaper Association Inc., 3:09-cv-00155-WMC, U.S. District Court, Western District of Wisconsin (Madison). The appeal is Wisconsin Interscholastic Athletic Association v. Gannett, 10-2627, U.S. Court of Appeals for the Seventh Circuit.
Teva Patent Lawsuit Moves Forward
Story first appeared in Bloomberg News.
Mylan Inc.’s motion to dismiss a patent lawsuit by Teva Pharmaceutical Industries Ltd. over the multiple-sclerosis drug Copaxone was dismissed by a federal judge.
U.S. District Judge Barbara Jones dismissed Mylan’s claim that Teva’s patent for the drug was invalid, according to a filing yesterday in federal court. A trial on the patent infringement case in Manhattan is set to begin Sept. 7. A Salt Lake City Intellectual Property Lawyer agrees with the dismissal.
Teva, which licensed patents from Yeda Research and Development Co. for Copaxone, sued Novartis AG’s Sandoz in 2008 and Mylan in 2009 after they separately tried to win approvals from the U.S. Food and Drug Administration to market generic versions of the drug before its patents expired in 2014.
Jones consolidated the cases. An earlier motion by Sandoz to dismiss the patent claim as invalid was also rejected. The Sandoz case is Teva Phamaceutical Industries Ltd. v. Sandoz Inc., 08-7611, U.S. District Court, Southern District of New York (Manhattan). The Mylan case is Teva Pharmaceuticals Industries Ltd. v. Mylan Inc., 09-8824, U.S. District Court, Southern District of New York (Manhattan).
Mylan Inc.’s motion to dismiss a patent lawsuit by Teva Pharmaceutical Industries Ltd. over the multiple-sclerosis drug Copaxone was dismissed by a federal judge.
U.S. District Judge Barbara Jones dismissed Mylan’s claim that Teva’s patent for the drug was invalid, according to a filing yesterday in federal court. A trial on the patent infringement case in Manhattan is set to begin Sept. 7. A Salt Lake City Intellectual Property Lawyer agrees with the dismissal.
Teva, which licensed patents from Yeda Research and Development Co. for Copaxone, sued Novartis AG’s Sandoz in 2008 and Mylan in 2009 after they separately tried to win approvals from the U.S. Food and Drug Administration to market generic versions of the drug before its patents expired in 2014.
Jones consolidated the cases. An earlier motion by Sandoz to dismiss the patent claim as invalid was also rejected. The Sandoz case is Teva Phamaceutical Industries Ltd. v. Sandoz Inc., 08-7611, U.S. District Court, Southern District of New York (Manhattan). The Mylan case is Teva Pharmaceuticals Industries Ltd. v. Mylan Inc., 09-8824, U.S. District Court, Southern District of New York (Manhattan).
APPLE LOOSES LEGAL REPRESENTATION
A part of Apple Inc.’s legal team representing the Cupertino, California-based company in a trademark dispute with Samsung Electronics Ltd. has withdrawn from the case, according to a court filing.
Samsung asked the court in a July 11 court filing to discharge Bridges & Mavrakakis LLP, of Palo Alto, California, from the case because of the firm’s previous representation of Samsung. The firm filed papers with the court Aug. 25 saying it would withdraw from the representation of Apple in the dispute.
The Suwon, South Korea-based company said lawyers from Bridges & Mavrakakis represented Samsung in a different infringement case involving one of the patents at issue in the Apple dispute. Bridges & Mavrakakis lawyers have worked almost 9,000 hours on Samsung patent litigation, according to the court filing. A Pittsburgh Intellectual Property Lawyer commented that the hours will continue to rise as the case progresses.
In the past, Samsung said, lawyers from the firm received confidential information from Samsung that is substantially related to this action. As a result, an irreconcilable conflict of interest required Bridges & Mavrakakis to be disqualified from representing Apple in this case, Samsung said.
Samsung said it had, to no avail, met with the firm on multiple occasions to attempt to resolve the conflict issue. The Korean company had argued that it was concerned about whether Bridges & Mavrakakis had confidential information, not whether they would use it.
According to the case docket, Apple continues to be represented by lawyers from San Francisco-based Morrison & Foerster LLP. A Boston Intellectual Property Lawyer believes that they are the best firm for the case.
The case is Apple Inc. v. Samsung Electronics Co., 11-cv-1846, U.S. District Court, Northern District of California (San Jose).
Samsung asked the court in a July 11 court filing to discharge Bridges & Mavrakakis LLP, of Palo Alto, California, from the case because of the firm’s previous representation of Samsung. The firm filed papers with the court Aug. 25 saying it would withdraw from the representation of Apple in the dispute.
The Suwon, South Korea-based company said lawyers from Bridges & Mavrakakis represented Samsung in a different infringement case involving one of the patents at issue in the Apple dispute. Bridges & Mavrakakis lawyers have worked almost 9,000 hours on Samsung patent litigation, according to the court filing. A Pittsburgh Intellectual Property Lawyer commented that the hours will continue to rise as the case progresses.
In the past, Samsung said, lawyers from the firm received confidential information from Samsung that is substantially related to this action. As a result, an irreconcilable conflict of interest required Bridges & Mavrakakis to be disqualified from representing Apple in this case, Samsung said.
Samsung said it had, to no avail, met with the firm on multiple occasions to attempt to resolve the conflict issue. The Korean company had argued that it was concerned about whether Bridges & Mavrakakis had confidential information, not whether they would use it.
According to the case docket, Apple continues to be represented by lawyers from San Francisco-based Morrison & Foerster LLP. A Boston Intellectual Property Lawyer believes that they are the best firm for the case.
The case is Apple Inc. v. Samsung Electronics Co., 11-cv-1846, U.S. District Court, Northern District of California (San Jose).
Intellectual Property: Samsung vs. Apple
Story first appeared in Bloomberg.
Samsung Electronics Co. agreed to push back the introduction of its newest tablet computer in Australia until the end of next month, the second delay in a month in its dispute with Apple Inc. in the country.
Samsung will defer the launch of the Galaxy 10.1 tablet computer pending a hearinhttp://www.blogger.com/img/blank.gifg scheduled the week of Sept. 26. on Apple’s request for an injunction, the Suwon, South Korea-based electronics maker said in a statement. David Catterns, an attorney representing Samsung, said his client is prepared to wait until the end of September. This was also the information received by a Washington DC Intellectual Property Lawyer.
The decision comes four weeks after Samsung first agreed to hold off on the Australian debut of the product. The two companies, the world’s two biggest makers of tablet computers, are also locked in legal disputes in markets including the U.S., Germany and South Korea according to a Frankfort Intellectual Property Lawyer.
Samsung will continue to push for the release of the product in Australia to ensure that consumers have a wider selection of innovative products to choose from.
Samsung agreed at an Aug. 2 hearing to hold off on sales of the 10.1 tablet after Apple claimed the device infringed 10 of its patents, including the look and feel of the iPad.
Samsung said the claim was based on a U.S. model and the Australian version was different. The company last week provided Apple’s legal team with three samples of the 10.1 version intended to be sold in Australia, Steven Burley, an attorney representing Apple, told Federal Court Justice Annabelle Bennett yesterday.
Burley said the Australian model, which has reduced functionality, still violates at least two of Apple’s patents. Samsung’s Catterns said the Australian model has different features” and doesn’t have reduced functionality.
The lawyers agreed to two days of hearings on Apple’s request for an injunction barring the sale of the 10.1 tablet in Australia until the resolution of the dispute, which may take months. The hearings are scheduled for Sept. 26 and 29. A San Francisco Intellectual Property Lawyer said this is normal procedure.
The agreement to halt advertising and the sale of the 10.1 tablet doesn’t affect any other Samsung tablet or smartphone available in Australia, or other countries, the company said following the Aug. 2 hearing.
A German judge said on Aug. 25 that Apple’s intellectual rights are probably strong enough to ban the sales of the 10.1 tablet in that country.
In the U.S., Samsung is arguing that the design for the iPad can be traced back to the Stanley Kubrick 1969 film “2001: A Space Odyssey.”
The case is Apple Inc. v. Samsung Electronics Co. NSD1243/2011. Federal Court of Australia (Sydney).
Samsung Electronics Co. agreed to push back the introduction of its newest tablet computer in Australia until the end of next month, the second delay in a month in its dispute with Apple Inc. in the country.
Samsung will defer the launch of the Galaxy 10.1 tablet computer pending a hearinhttp://www.blogger.com/img/blank.gifg scheduled the week of Sept. 26. on Apple’s request for an injunction, the Suwon, South Korea-based electronics maker said in a statement. David Catterns, an attorney representing Samsung, said his client is prepared to wait until the end of September. This was also the information received by a Washington DC Intellectual Property Lawyer.
The decision comes four weeks after Samsung first agreed to hold off on the Australian debut of the product. The two companies, the world’s two biggest makers of tablet computers, are also locked in legal disputes in markets including the U.S., Germany and South Korea according to a Frankfort Intellectual Property Lawyer.
Samsung will continue to push for the release of the product in Australia to ensure that consumers have a wider selection of innovative products to choose from.
Samsung agreed at an Aug. 2 hearing to hold off on sales of the 10.1 tablet after Apple claimed the device infringed 10 of its patents, including the look and feel of the iPad.
Samsung said the claim was based on a U.S. model and the Australian version was different. The company last week provided Apple’s legal team with three samples of the 10.1 version intended to be sold in Australia, Steven Burley, an attorney representing Apple, told Federal Court Justice Annabelle Bennett yesterday.
Burley said the Australian model, which has reduced functionality, still violates at least two of Apple’s patents. Samsung’s Catterns said the Australian model has different features” and doesn’t have reduced functionality.
The lawyers agreed to two days of hearings on Apple’s request for an injunction barring the sale of the 10.1 tablet in Australia until the resolution of the dispute, which may take months. The hearings are scheduled for Sept. 26 and 29. A San Francisco Intellectual Property Lawyer said this is normal procedure.
The agreement to halt advertising and the sale of the 10.1 tablet doesn’t affect any other Samsung tablet or smartphone available in Australia, or other countries, the company said following the Aug. 2 hearing.
A German judge said on Aug. 25 that Apple’s intellectual rights are probably strong enough to ban the sales of the 10.1 tablet in that country.
In the U.S., Samsung is arguing that the design for the iPad can be traced back to the Stanley Kubrick 1969 film “2001: A Space Odyssey.”
The case is Apple Inc. v. Samsung Electronics Co. NSD1243/2011. Federal Court of Australia (Sydney).
DRIMAL SENT TO PRISON FOR ILLEGAL TRADING
Story first appeared in USA TODAY.
A hedge fund worker who made more than $11 million through illegal trades was sentenced Wednesday to 5½ years in prison by a judge who complained that Wall Street wasn't hearing the message that insider trading is a crime that ruins careers and leads to time behind bars.
U.S. District Judge Richard Sullivan said as he sentenced Craig Drimal for his role in what prosecutors described as the biggest hedge fund insider trading case in history, that there has to be a message sent to hedge fund managers, traders and lawyers that this is not going to be tolerated.
Drimal was among more than two dozen hedge fund workers and corrupt employees of public companies convicted in a scheme prosecutors say reaped more than $50 million in profits and resulted in the convictions of more than two dozen people, including one-time billionaire Raj Rajaratnam, who awaits sentencing. Drimal pleaded guilty in April.
Drimal said he was deeply sorry for the pain that he caused, and he understands that he committed a crime and deserves to pay a price.
Drimal, who is in his mid-50s, sometimes shared office space at Rajaratnam's Manhattan-based Galleon Group of hedge funds, though he was not an employee. Drimal, the first securities trader to be wiretapped by federal authorities in the probe, was caught in a phase of the investigation that found several securities traders relying on tips from two corrupt lawyers at a Manhattan law firm who had information about pending mergers and acquisitions.
The judge said he was disappointed at the cavalier attitude displayed by participants in the securities fraud, including an arrogance that caused some of them to view insider trading as just another tool to gain an edge.
The judge said he thought that he was confident he wasn't going to be caught. He rejected requests by Drimal's lawyer for leniency because of his charitable works and his devotion to his family and friends.
The judge noted that Drimal played a key role in bribing lawyers to accept tens of thousands of dollars to supply tips that would reap millions of dollars for him and others.
During the sentencing hearing, the judge noted that Drimal spent $17,000 monthly and owned a 3,500-square-foot home while declaring no taxable income for several years, a fact his lawyer blamed on trading losses balancing out his gains.
A hedge fund worker who made more than $11 million through illegal trades was sentenced Wednesday to 5½ years in prison by a judge who complained that Wall Street wasn't hearing the message that insider trading is a crime that ruins careers and leads to time behind bars.
U.S. District Judge Richard Sullivan said as he sentenced Craig Drimal for his role in what prosecutors described as the biggest hedge fund insider trading case in history, that there has to be a message sent to hedge fund managers, traders and lawyers that this is not going to be tolerated.
Drimal was among more than two dozen hedge fund workers and corrupt employees of public companies convicted in a scheme prosecutors say reaped more than $50 million in profits and resulted in the convictions of more than two dozen people, including one-time billionaire Raj Rajaratnam, who awaits sentencing. Drimal pleaded guilty in April.
Drimal said he was deeply sorry for the pain that he caused, and he understands that he committed a crime and deserves to pay a price.
Drimal, who is in his mid-50s, sometimes shared office space at Rajaratnam's Manhattan-based Galleon Group of hedge funds, though he was not an employee. Drimal, the first securities trader to be wiretapped by federal authorities in the probe, was caught in a phase of the investigation that found several securities traders relying on tips from two corrupt lawyers at a Manhattan law firm who had information about pending mergers and acquisitions.
The judge said he was disappointed at the cavalier attitude displayed by participants in the securities fraud, including an arrogance that caused some of them to view insider trading as just another tool to gain an edge.
The judge said he thought that he was confident he wasn't going to be caught. He rejected requests by Drimal's lawyer for leniency because of his charitable works and his devotion to his family and friends.
The judge noted that Drimal played a key role in bribing lawyers to accept tens of thousands of dollars to supply tips that would reap millions of dollars for him and others.
During the sentencing hearing, the judge noted that Drimal spent $17,000 monthly and owned a 3,500-square-foot home while declaring no taxable income for several years, a fact his lawyer blamed on trading losses balancing out his gains.
Friday, August 26, 2011
Voting Rights Act Is Up For Debate In Arizona
Story first appeared in Politico
The state of Arizona filed a lawsuit Thursday challenging the federal government’s authority to enforce part of the Voting Rights Act of 1965, becoming the first state to challenge the constitutionality of sections of the federal law that bars states from denying or limiting a person’s right to vote based on their race or color.
State Attorney General Tom Horne argues in the suit, which was filed in District of Columbia District Court, that a provision in the law that requires several states including Arizona to get approval from the Justice Department for changes in voting procedures is unconstitutional.
POLITICO 44
Horne said the portions of the Voting Rights Act requiring preclearance of all voting changes are either archaic, not based in fact, or subject to completely subjective enforcement based on the whim of federal authorities.
For close to four decades, Arizona and its municipalities have needed to get Justice Department approval for changes to voting procedures, driver’s licenses and school district boundaries. Importantly this year, the federal government must also approve the state’s redistricting efforts.
Horne says Arizona has been subjected to enforcement actions for problems that were either corrected nearly 40 years ago and have not been repeated, or penalized for alleged violations that have no basis in the Constitution, and that needs to stop. Horne has been leading the state’s fight to uphold its tough anti-illegal immigration laws alongside Republican Gov. Jan Brewer.
But Attorney General Eric Holder said that he plans to fight the suit because the Voting Rights Act continues to play a vital role in our society by ensuring that every American has the right to vote and to have that vote counted.
Holder said the Department of Justice will vigorously defend the constitutionality of the Voting Rights Act in this case, as it has done successfully in the past, noting that the provisions for preclearance — which Arizona is challenging as “archaic” — were reauthorized by Congress in 2006 with overwhelming and bipartisan support.
And some Democrats in the state support continued federal scrutiny of the state’s voting procedures and redistricting.
State Sen. Steve Gallardo, a Democrat from Phoenix said there is a reason Arizona is on the list, and that is because they have a history of discrimination, a history of unfairness.
A decade ago, during the last round of redistricting, the Justice Department required the state’s independent redistricting commission to redraw its maps after determining that the new lines would disadvantage Hispanic voters.
The state of Arizona filed a lawsuit Thursday challenging the federal government’s authority to enforce part of the Voting Rights Act of 1965, becoming the first state to challenge the constitutionality of sections of the federal law that bars states from denying or limiting a person’s right to vote based on their race or color.
State Attorney General Tom Horne argues in the suit, which was filed in District of Columbia District Court, that a provision in the law that requires several states including Arizona to get approval from the Justice Department for changes in voting procedures is unconstitutional.
POLITICO 44
Horne said the portions of the Voting Rights Act requiring preclearance of all voting changes are either archaic, not based in fact, or subject to completely subjective enforcement based on the whim of federal authorities.
For close to four decades, Arizona and its municipalities have needed to get Justice Department approval for changes to voting procedures, driver’s licenses and school district boundaries. Importantly this year, the federal government must also approve the state’s redistricting efforts.
Horne says Arizona has been subjected to enforcement actions for problems that were either corrected nearly 40 years ago and have not been repeated, or penalized for alleged violations that have no basis in the Constitution, and that needs to stop. Horne has been leading the state’s fight to uphold its tough anti-illegal immigration laws alongside Republican Gov. Jan Brewer.
But Attorney General Eric Holder said that he plans to fight the suit because the Voting Rights Act continues to play a vital role in our society by ensuring that every American has the right to vote and to have that vote counted.
Holder said the Department of Justice will vigorously defend the constitutionality of the Voting Rights Act in this case, as it has done successfully in the past, noting that the provisions for preclearance — which Arizona is challenging as “archaic” — were reauthorized by Congress in 2006 with overwhelming and bipartisan support.
And some Democrats in the state support continued federal scrutiny of the state’s voting procedures and redistricting.
State Sen. Steve Gallardo, a Democrat from Phoenix said there is a reason Arizona is on the list, and that is because they have a history of discrimination, a history of unfairness.
A decade ago, during the last round of redistricting, the Justice Department required the state’s independent redistricting commission to redraw its maps after determining that the new lines would disadvantage Hispanic voters.
Wednesday, August 24, 2011
MORE PEOPLE ASKING FOR DISABILITY
Story first appeared in the Associated Press.
Laid-off workers and aging baby boomers are flooding Social Security's disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.
Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can't find new ones in an economy that has shed nearly 7 million jobs.
The stampede for benefits is adding to a growing backlog of applicants - many wait two years or more before their cases are resolved - and worsening the financial problems of a program that's been running in the red for years.
New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security's much larger retirement fund is projected to run dry as well.
Much of the focus in Washington has been on fixing Social Security's retirement system. Proposals range from raising the retirement age to means-testing benefits for wealthy retirees. But the disability system is in much worse shape and its problems defy easy solutions.
The trustees who oversee Social Security are urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994. That would provide only short-term relief at the expense of weakening the retirement program.
Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can't find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That's 700,000 more than in 2008 and 1 million more than a decade ago.
The disability program is also being hit by an aging population - disability rates rise as people get older - as well as a system that encourages people to apply for more generous disability benefits rather than waiting until they qualify for retirement.
Retirees can get full Social Security benefits at age 66, a threshold gradually rising to 67. Early retirees can get reduced benefits at 62. However, if you qualify for disability, you can get full benefits, based on your work history, even before 62.
Also, people who qualify for Social Security disability automatically get Medicare after two years, even if they are younger than 65, the age when other retirees qualify for the government-run health insurance program.
Congress tried to rein in the disability program in the late 1970s by making it tougher to qualify. The number of people receiving benefits declined for a few years, even during a recession in the early 1980s. Congress, however, reversed course and loosened the criteria, and the rolls were growing again by 1984.
The disability program got into trouble first because of liberalization of eligibility standards in the 1980s, said Charles Blahous, one of the public trustees who oversee Social Security. Then it got another shove into bigger trouble during the recent recession.
Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income. Social Security is for people with substantial work histories, and monthly disability payments average $927. Supplemental Security Income does not require a work history but it has strict limits on income and assets. Monthly SSI payments average $500.
As policymakers work to improve the disability system, they are faced with two major issues: Legitimate applicants often have to wait years to get benefits while many others get payments they don't deserve.
Last year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress.
Congress is targeting overpayments.
The deficit reduction package enacted this month would allow Congress to boost Social Security's budget by about $4 billion over the next decade to invest in programs that identify people who no longer qualify for disability benefits. The Congressional Budget Office estimates that increased enforcement would save nearly $12 billion over the next decade.
At the same time, the application process can be a nightmare for legitimate applicants. About two-thirds of initial applications are rejected. Most of these people drop their claims, but for those willing go through an appeals process that can take two years or more, chances are good they eventually will get benefits.
Astrue has pledged to reduce processing times for applicants' appeals, and he has had some success, even as the number of claims skyrockets. The number of people waiting for decisions has increased, but their wait times are going down.
Astrue said it's ludicrous to say that the backlog problem is getting worse. Astrue says the backlog problem has gotten dramatically better.
Patricia L. Foster said she was working as a nurse in a hospital in Columbia, S.C., in 2005 when she was attacked by a patient who was suffering from a mental illness. Foster, 64, said she injured her neck so bad she had a plate inserted. She said she also suffers from post-traumatic stress disorder.
Foster was turned down twice for Social Security disability benefits before finally getting them in 2009, after hiring an Illinois-based company, Allsup, to represent her. She said she was awarded retroactive benefits, though the process was demeaning.
Laid-off workers and aging baby boomers are flooding Social Security's disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.
Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can't find new ones in an economy that has shed nearly 7 million jobs.
The stampede for benefits is adding to a growing backlog of applicants - many wait two years or more before their cases are resolved - and worsening the financial problems of a program that's been running in the red for years.
New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security's much larger retirement fund is projected to run dry as well.
Much of the focus in Washington has been on fixing Social Security's retirement system. Proposals range from raising the retirement age to means-testing benefits for wealthy retirees. But the disability system is in much worse shape and its problems defy easy solutions.
The trustees who oversee Social Security are urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994. That would provide only short-term relief at the expense of weakening the retirement program.
Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can't find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That's 700,000 more than in 2008 and 1 million more than a decade ago.
The disability program is also being hit by an aging population - disability rates rise as people get older - as well as a system that encourages people to apply for more generous disability benefits rather than waiting until they qualify for retirement.
Retirees can get full Social Security benefits at age 66, a threshold gradually rising to 67. Early retirees can get reduced benefits at 62. However, if you qualify for disability, you can get full benefits, based on your work history, even before 62.
Also, people who qualify for Social Security disability automatically get Medicare after two years, even if they are younger than 65, the age when other retirees qualify for the government-run health insurance program.
Congress tried to rein in the disability program in the late 1970s by making it tougher to qualify. The number of people receiving benefits declined for a few years, even during a recession in the early 1980s. Congress, however, reversed course and loosened the criteria, and the rolls were growing again by 1984.
The disability program got into trouble first because of liberalization of eligibility standards in the 1980s, said Charles Blahous, one of the public trustees who oversee Social Security. Then it got another shove into bigger trouble during the recent recession.
Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income. Social Security is for people with substantial work histories, and monthly disability payments average $927. Supplemental Security Income does not require a work history but it has strict limits on income and assets. Monthly SSI payments average $500.
As policymakers work to improve the disability system, they are faced with two major issues: Legitimate applicants often have to wait years to get benefits while many others get payments they don't deserve.
Last year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress.
Congress is targeting overpayments.
The deficit reduction package enacted this month would allow Congress to boost Social Security's budget by about $4 billion over the next decade to invest in programs that identify people who no longer qualify for disability benefits. The Congressional Budget Office estimates that increased enforcement would save nearly $12 billion over the next decade.
At the same time, the application process can be a nightmare for legitimate applicants. About two-thirds of initial applications are rejected. Most of these people drop their claims, but for those willing go through an appeals process that can take two years or more, chances are good they eventually will get benefits.
Astrue has pledged to reduce processing times for applicants' appeals, and he has had some success, even as the number of claims skyrockets. The number of people waiting for decisions has increased, but their wait times are going down.
Astrue said it's ludicrous to say that the backlog problem is getting worse. Astrue says the backlog problem has gotten dramatically better.
Patricia L. Foster said she was working as a nurse in a hospital in Columbia, S.C., in 2005 when she was attacked by a patient who was suffering from a mental illness. Foster, 64, said she injured her neck so bad she had a plate inserted. She said she also suffers from post-traumatic stress disorder.
Foster was turned down twice for Social Security disability benefits before finally getting them in 2009, after hiring an Illinois-based company, Allsup, to represent her. She said she was awarded retroactive benefits, though the process was demeaning.
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