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Reuters – New York Attorney General Andrew Cuomo, probing illegal marketing and sales of auction rate securities (ARS), is likely to file a lawsuit on Monday against Charles Schwab Corp (SCHW.O) for civil fraud, the Wall Street Journal said, citing people familiar with the matter.
As a part of the lawsuit, Cuomo will likely present transcripts of recordings between Schwab brokers and customers that allegedly show how the ARS were misrepresented by brokers as easy-to-sell alternatives to cash, according to the paper.
HeraldTribune.com – An attorney representing newsletter writer Don Rowe, who strongly recommended Arthur G. Nadel’s hedge funds to some investors, is seeking to have a civil fraud suit against his client dismissed.
In an Aug. 3 filing in circuit court in Sarasota County, Tampa attorney Edward O. Savitz claims that Rowe was not the ultimate cause of the investors’ losses: He did not sell or offer any securities and some of the plaintiff’s claims are barred because too much time has passed.
Sarasota attorney Drew Clayton is representing 11 investors in Nadel’s failed hedge funds and seeking damages of $5.4 million. All his clients were subscribers to one of the publications Rowe published from Sarasota: ”Wall Street Digest” or ”Carnegie Asset Management Inc. Reports.”
Denver Post – J. Ezra Merkin, a hedge-fund manager who invested billions of dollars of clients’ money with swindler Bernard Madoff, has agreed to relinquish control of his funds to court-appointed trustees.
The attorney general’s office had requested the move in connection with its civil fraud lawsuit accusing Merkin of convincing clients he was managing their money when he was actually funneling $2.4 billion to Madoff’s Ponzi scheme.
The deal, which is expected to be approved by a judge Thursday, is not a settlement in the case, the attorney general’s office said.
