Jumaat, 18 April 2014

The Star Online: Business

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The Star Online: Business

Mt. Gox suitors seek support to save bitcoin exchange

Posted: 18 Apr 2014 04:09 PM PDT

A group of investors seeking to buy Mt. Gox has launched a website to garner support from creditors of the bankrupt bitcoin exchange to prevent a liquidation of its assets.

"We need your help to stop a liquidation, which would be good neither for Mt. Gox creditors nor bitcoin's reputation with the general public and regulators," the investors wrote on the website. 

Mt. Gox, once the world's biggest bitcoin exchange, is likely to be liquidated after a Tokyo court dismissed the company's bid to resuscitate its business, the court appointed administrator said on Wednesday.

"The Tokyo district court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings," he said.

The investor group, which offered to take over the assets of Mt. Gox and revive it, has received backing from many creditors and hopes to convince the court to reconsider its rehabilitation proposal, the Wall Street Journal reported on Thursday. (http://r.reuters.com/keh68v)

Mt. Gox has about 127,000 creditors.

The exchange filed for bankruptcy protection in Japan in February, saying it may have lost nearly half a billion dollars worth of the virtual coins due to hacking.

Mark Karpeles, the chief executive of Mt. Gox, said he would not come to the United States to answer questions about the bankruptcy case, Mt. Gox lawyers told a U.S. federal judge on Monday.- Reuters

Brazil's richest man Batista investigated for financial crimes, report

Posted: 18 Apr 2014 04:03 PM PDT

RIO DE JANEIRO: Brazil´s federal police have opened an investigation into former billionaire Eike Batista for financial crimes, including insider trading, manipulation of markets and money laundering, Brazilian media reported on Friday.

If the police probe leads to criminal charges against Batista, it would be yet another major blow for a businessman once hailed as Brazil's model entrepreneur and symbol of its economic success.

Batista´s EBX oil, mining and logistics empire, which two years ago was valued at $60 billion, collapsed last year in a mountain of debt and massive filings for bankruptcy protection.

A week ago, Brazil's securities commission, CVM, announced that Batista was under investigation for insider trading as chairman of his now-bankrupt oil-producing company Óleo and Gás Participações SA <OGXP3.SA>, formerly known as OGX, and its sister company, shipbuilder OSX Brasil SA <OSXB3.SA>.

Batista is now being investigated by the police at the request of federal prosecutors in Rio de Janeiro for financial crimes involving the allegedly illegal sales of shares before his conglomerate fell apart, O Globo newspaper reported.

The police probe will focus on the sale of shares last year in oil producer OGX before the company informed the market that much of its reserves were not commercially viable, Folha de S. Paulo newspaper said.

The Federal Police would not comment.

A spokeswoman for Batista said his EBX group had not been officially notified by federal prosecutors or police and would provide the authorities with explanations in due course.

"Everything will be cleared up and Eike Batista's good faith will be proven," his lawyer Darwin Corrêa said.

Batista, Brazil's richest man for most of the past decade, could face up to 23 years in prison if convicted.

Securities watchdog CVM wants to determine whether Batista withheld information that was unfavorable to some of his businesses while encouraging investors to buy more stock in his companies at a time when he sold shares of OGX and OSX.

Among other probes, the regulator will look into whether Batista used his Twitter account to manipulate OGX share prices while hiding the company's problems. - Reuters

Rajaratnam&#39;s brother loses bid to dismiss insider trading charges

Posted: 18 Apr 2014 04:00 PM PDT

NEW YORK: Rengan Rajaratnam, the younger brother of imprisoned hedge fund manager Raj Rajaratnam, on Friday lost a bid to dismiss some of the insider trading charges leveled against him last year.

U.S. District Judge Naomi Reice Buchwald in Manhattan ruled that the indictment adequately alleged the essential elements of the crimes charged.

Buchwald agreed that four securities fraud counts were "internally inconsistent" with a conspiracy charge contained in the indictment.

But she withheld ruling on whether to dismiss them in order to allow the government to decide whether to proceed on those charges.

A lawyer for Rajaratnam did not respond to a request for comment. A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment.

The case, set for a June 17 trial, is one of a wave of insider trading prosecutions pursued by Bharara's office, resulting in 80 convictions since October 2009.

Raj Rajaratnam, founder of the hedge fund Galleon Group, received an 11-year prison sentence in October 2011 after a jury convicted him on charges related to insider trading.

A grand jury subsequently indicted Rengan Rajaratnam, a former portfolio manager at Galleon, in March 2013 on one conspiracy count and six counts of securities fraud.

Prosecutors alleged that Rengan Rajaratnam, 43, had conspired with his brother to trade on non-public information related to technology companies and Clearwire Corp and Advanced Micro Devices Inc <AMD.N>, netting $1.2 million in illegal profits.


Rajaratnam's lawyers had argued the indictment failed to charge that he knew two alleged tippers of non-public information received personal benefits in exchange for giving tips to Raj Rajaratnam.

The tippers, prosecutors said, were Rajiv Goel, an employee of Intel Corp <INTC.O>, and Anil Kumar, a former McKinsey director. Both admitted to providing tips to Rajaratnam and received probation in 2012 after pleading guilty and cooperating with the investigation.

In her ruling Friday, Buchwald said while the indictment did not explicitly state the tippers received benefits, it provided enough details to give Rajaratnam notice of the charges against him.

She added that the indictment's sufficiency was a separate issue from whether she would require prosecutors at trial to prove Rajaratnam knew of any benefits received by the tippers.

The issue is set to be considered Tuesday by the 2nd U.S. Circuit Court of Appeals in an appeal by insider trading defendants Todd Newman, a former portfolio manager at the hedge fund Diamondback Capital Management, and Anthony Chiasson, co-founder of the hedge fund Level Global Investors.

Newman and Chiasson were convicted in 2012 and subsequently sentenced to 4-1/2 years and 6-1/2 years in prison, respectively.


With regard to the four "inconsistent" securities fraud counts against Rajaratnam, Buchwald raised issue with how prosecutors could allege in one part of the indictment that Raj Rajaratnam caused Galleon funds to buy Clearwire stock and then later say Rengan caused those stock purchases.

Buchwald said she would dismiss those four counts unless the prosecutors offer "a coherent, logical theory as to how defendant aided and abetted the alleged securities fraud."

She gave the government until May 1 to decide whether to move forward on those counts.

The cases are U.S. v. Rajaratnam, U.S. District Court, Southern District of New York, No. 13-cr-00211; and SEC v. Rajaratnam in the same court, No. 13-01894.- Reuters

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