FROM: U.S. JUSTICE DEPARTMENT
WASHINGTON — Two former derivatives brokers and a former cash broker employed by London-based brokerage firm ICAP were charged as part of the ongoing criminal investigation into the manipulation of the London Interbank Offered Rate (LIBOR), the Justice Department announced today.
Darrell Read, who resides in New Zealand, and Daniel Wilkinson and Colin Goodman, both of England, were charged with conspiracy to commit wire fraud and two counts of wire fraud in a criminal complaint unsealed in Manhattan federal court earlier today. They each face a maximum penalty of 30 years in prison for each count upon conviction.
“By allegedly participating in a scheme to manipulate benchmark interest rates for financial gain, these defendants undermined the integrity of the global markets,” said Attorney General Eric Holder. “They were supposed to be honest brokers, but instead, they put their own financial interests ahead of that larger responsibility. And as a result, transactions and financial products around the world were compromised, because they were tied to a rate that was distorted due to the brokers’ dishonesty. These charges underscore the Justice Department’s determination to hold accountable all those whose conduct threatens the integrity of our financial markets.”
“These three men are accused of repeatedly and deliberately spreading false information to banks and investors around the world in order to fraudulently move the market and help their client fleece his counterparties,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division. “Our criminal investigation of the manipulation of LIBOR by some of the largest banks in the world has led us from New York to London, to Tokyo, and other financial hubs around the globe. These important charges are just the latest law-enforcement action in the Criminal Division and Antitrust Division’s global LIBOR investigation, and reflect the Department’s continued dedication to detecting, and prosecuting, financial fraudsters who affect U.S. markets, whether they work at a bank, or a brokerage, and whether they carry out their fraud from a desk in the United States, or abroad.”
“The complaint unsealed today charges Colin Goodman, Daniel Wilkinson and Darrell Read for conspiring to manipulate benchmark interest rates that determined the profitability of their client’s trades,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “In exchange for bigger bonus checks, the three defendants undermined financial markets around the world by compromising the integrity of globally used interest rate benchmarks. The Department continues to demonstrate its commitment to protecting the interest of American citizens in free and fair financial markets.”
“Corporate and securities fraud involving the manipulation of these rates causes a worldwide impact on trading positions and erodes the integrity of the market and confidence in Wall Street,” said Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office. “Unraveling such complex financial schemes is difficult and time consuming. Today’s charges are the result of the hard work of the FBI special agents and forensic accountants who dedicated significant time and resources to investigating this case.”
According to the criminal complaint, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks. LIBOR is published by the British Bankers’ Association (BBA), a trade association based in London. At the time relevant to the criminal complaint, LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year. The published LIBOR “fix” for a given currency at a specific maturity is the result of a calculation based upon submissions from a panel of banks for that currency (the contributor panel) selected by the BBA.
LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were estimated at approximately $450 trillion.
According to allegations in the criminal complaint filed in this case, between July 2006 and September 2010, Wilkinson was a desk director employed in the London office of ICAP, where he supervised a group of derivatives brokers – including Read – specializing in Yen-based financial products. Generally, the desk’s clients were derivatives traders at large financial institutions, and the transactions brokered by Wilkinson, Read and others on the desk essentially consisted of bets between traders on the direction in which Yen LIBOR would move. Between July 2006 and September 2009, the desk’s largest client was a senior trader at UBS (UBS Trader) in Tokyo, to whom Read spoke almost daily. Because of the large size of the client’s trading positions, even slight moves of a fraction of a percent in Yen LIBOR could generate large profits. For example, UBS Trader once told Read that a 0.01 percent – or one basis point – movement in the final Yen LIBOR fixing on a specific date could result in $3 million profit for his trading positions. A significant part of both Read’s and Wilkinson’s compensation was tied to the brokerage fees generated by UBS Trader and paid to ICAP.
Goodman was a cash broker at ICAP’s London office during the relevant time period. In addition to brokering cash transactions, Goodman distributed a daily email to individuals outside of ICAP, including derivatives traders at several large banks as well as those responsible for providing the BBA with LIBOR submissions at certain banks. Goodman’s email contained what was termed his “SUGGESTED LIBORS,” purported predictions of where Yen LIBOR ultimately would fix each day across eight specified borrowing periods. Read and Wilkinson, along with Goodman himself, often referred to Goodman as “lord libor.”
The complaint alleges that Read, Wilkinson and Goodman, together with UBS Trader, executed a sustained and systematic scheme to move Yen LIBOR in a direction favorable to UBS Trader’s trading positions.
According to the criminal complaint, the primary strategy employed by Read, Wilkinson and Goodman to execute the scheme was to use Goodman’s “SUGGESTED LIBORS” email to disseminate misinformation to Yen LIBOR panel banks in hopes that the banks would rely on the misinformation when making their own respective Yen LIBOR submissions to the BBA for inclusion in the published fix. Rather than providing good faith predictions as to where Yen LIBOR would fix, Goodman instead often used his daily email to set forth predictions which benefitted UBS Trader’s trading positions.
Beginning in or about June 2007, Goodman was paid a bonus through the desk Wilkinson supervised, allegedly intended, at least in part, to reward Goodman for his role in their effort to influence and manipulate the published Yen LIBOR fix.
As a second strategy, Read and Wilkinson allegedly further agreed to contact interest rate derivatives traders and submitters employed at Yen LIBOR panel banks in an effort to cause them to make false and misleading submissions to the BBA at UBS Trader’s behest.
As alleged in the charging document, Read, Wilkinson, Goodman, UBS Trader, and other co-conspirators often executed their scheme through electronic chats and email exchanges. For example, on June 28, 2007, in an email message, Read told Wilkinson: “DAN THIS IS GETTING SERIOUS [UBS TRADER] IS NOT HAPPY WITH THE WAY THINGS ARE PROGRESSING . . . CAN YOU PLEASE GET HOLD OF COLIN AND GET HIM TO SEND OUT 6 MOS LIBOR AT 0.865 AND TO GET HIS BANKS SETTING IT HIGH. THIS IS VERY IMPORTANT BECAUSE [UBS TRADER] IS QUESTIONING MY (AND OUR) WORTH.”
The complaint alleges that the defendants were aware of the effects that Goodman’s false and fraudulent “SUGGESTED LIBORS” had on submissions by Yen LIBOR panel banks. For example, on Nov. 20, 2008, Read asked UBS Trader, “you have a really big fix tonight I believe? if Colin sends out 6m at a more realistic level than 1.10 [%] i reckon [the two panel banks] will parrot him, it might mean 6m coming down a bit.” On the following day, Nov. 21, 2008, Goodman moved his suggestion for 6-month Yen LIBOR down by nine basis points. The two other banks mirrored Goodman’s suggestion, moving their 6-month Yen LIBOR submissions down by nine basis points.
According to allegations in the complaint, Read counseled UBS Trader how to most effectively manipulate Yen LIBOR. For example, UBS Trader told Read in a July 22, 2009, electronic chat that “11th aug is the big date...i still have lots of 6m fixings till the 10th.” Read responded to UBS Trader, “if you drop [UBS’s] 6m dramatically on the 11th mate, it will look v fishy... . I’d be v careful how you play it, there might be cause for a drop as you cross into a new month but a couple of weeks in might get people questioning you.” UBS Trader replied, “don’t worry will stagger the drops...ie 5bp then 5bp,” and Read told UBS Trader, “ok mate, don’t want you getting into [expletive].” UBS Trader again assured Read that UBS and two additional panel banks would stagger their drops in coordination, and Read concluded, “great the plan is hatched and sounds sensible.”
A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.
The investigation is being conducted by special agents, forensic accountants, and intelligence analysts of the FBI’s Washington Field Office. The prosecution is being handled by Deputy Chief William Stellmach and Trial Attorney Sandra L. Moser of the Criminal Division’s Fraud Section and Trial Attorneys Eric Schleef and Kristina Srica of the Antitrust Division. Trial Attorneys Alexander Berlin and Thomas B.W. Hall, Law Clerk Andrew Tyler, and Paralegal Specialist Kevin Sitarski of the Criminal Division’s Fraud Section, along with Assistant Chief Elizabeth Prewitt and Trial Attorney Richard Powers of the Antitrust Division, and former Trial Attorney Luke Marsh have also provided valuable assistance. The Criminal Division’s Office of International Affairs has provided assistance in this matter as well.
The broader investigation relating to LIBOR and other benchmark rates has required, and has greatly benefited from, a diligent and wide-ranging cooperative effort among various enforcement agencies both in the United States and abroad. The Justice Department acknowledges and expresses its deep appreciation for this assistance. In particular, the Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the Department and, along with the U.K. Financial Conduct Authority, has played a major role in the investigation. The Securities and Exchange Commission has also provided valuable assistance for which the Department is grateful. The Department also expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation, and the Department is grateful for their cooperation and assistance as well.
Finally, the Department acknowledges ICAP’s continuing cooperation in the Department’s ongoing investigation.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.
Friday, September 27, 2013
HHS ON DIABETES RESEARCH
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Fruits of the diabetes research
From the U.S. Department of Health and Human Services, I’m Ira Dreyfuss with HHS HealthBeat.
Like sweets? Fruits are sweet, and a study indicates these sweets can lower the risk of diabetes. At the Harvard School of Public Health, researcher Qi Sun saw signs of this in data from 1984 to 2008 on more than 187,000 people.
He compared people who ate at least two servings a week of certain whole fruits – particularly blueberries, grapes and apples – with people who ate less than one serving a month. The fruit eaters had a 23 percent lower risk of diabetes.
So Sun says:
“We recommend people to increase consumption of whole fruits intake to facilitate prevention of type 2 diabetes.”
The study in the journal BMJ was supported by the National Institutes of Health.
Learn more at healthfinder.gov.
HHS HealthBeat is a production of the U.S. Department of Health and Human Services. I’m Ira Dreyfuss.
Fruits of the diabetes research
From the U.S. Department of Health and Human Services, I’m Ira Dreyfuss with HHS HealthBeat.
Like sweets? Fruits are sweet, and a study indicates these sweets can lower the risk of diabetes. At the Harvard School of Public Health, researcher Qi Sun saw signs of this in data from 1984 to 2008 on more than 187,000 people.
He compared people who ate at least two servings a week of certain whole fruits – particularly blueberries, grapes and apples – with people who ate less than one serving a month. The fruit eaters had a 23 percent lower risk of diabetes.
So Sun says:
“We recommend people to increase consumption of whole fruits intake to facilitate prevention of type 2 diabetes.”
The study in the journal BMJ was supported by the National Institutes of Health.
Learn more at healthfinder.gov.
HHS HealthBeat is a production of the U.S. Department of Health and Human Services. I’m Ira Dreyfuss.
SECRETARY OF DEFENSE HAGEL MEETS WITH GULF LEADERS IN NEW YORK
FROM: U.S. DEFENSE DEPARTMENT
Hagel Meets with Lebanese President, Gulf Leaders in New York
American Forces Press Service
WASHINGTON, Sept. 26, 2013 - Defense Secretary Chuck Hagel met in New York today with Lebanese President Michel Sleiman on the sidelines of the U.N. General Assembly and took part in a meeting of the U.S.-Gulf Cooperation Council Strategic Cooperation Forum, Pentagon Spokesman George Little said.
In a statement issued after the meeting, Little said Hagel joined Secretary of State John F. Kerry in meeting with the foreign ministers of the six-member GCC for the third iteration of the SCF, a consultative body formed in 2012 to enhance multilateral cooperation between the United States and the GCC on a range of common issues.
During the SCF, Little said "Secretary Hagel reiterated the United States' commitment to the region and underscored how collaborative approaches toward regional defense made the Middle East more secure and stable, a shared interest of the United States and the GCC."
Hagel, he said, detailed recent progress on several areas of defense cooperation, including the success of the May 2013 International Mine Countermeasures Exercise and multinational engagement on ballistic missile defense at the Gulf Combined Air Operations Center, while urging further collaboration in these defense initiatives. The SCF concluded with Secretary Kerry moderating a discussion on regional issues, including Syria, Iran, and Yemen, Little added.
Hagel also met with Lebanese President Sleiman "to affirm the strength of the U.S.-Lebanon partnership and our shared view of the importance of the Lebanese Armed Forces as Lebanon's sole legitimate defense force to Lebanon's stability and unity," Little said.
Hagel Meets with Lebanese President, Gulf Leaders in New York
American Forces Press Service
WASHINGTON, Sept. 26, 2013 - Defense Secretary Chuck Hagel met in New York today with Lebanese President Michel Sleiman on the sidelines of the U.N. General Assembly and took part in a meeting of the U.S.-Gulf Cooperation Council Strategic Cooperation Forum, Pentagon Spokesman George Little said.
In a statement issued after the meeting, Little said Hagel joined Secretary of State John F. Kerry in meeting with the foreign ministers of the six-member GCC for the third iteration of the SCF, a consultative body formed in 2012 to enhance multilateral cooperation between the United States and the GCC on a range of common issues.
During the SCF, Little said "Secretary Hagel reiterated the United States' commitment to the region and underscored how collaborative approaches toward regional defense made the Middle East more secure and stable, a shared interest of the United States and the GCC."
Hagel, he said, detailed recent progress on several areas of defense cooperation, including the success of the May 2013 International Mine Countermeasures Exercise and multinational engagement on ballistic missile defense at the Gulf Combined Air Operations Center, while urging further collaboration in these defense initiatives. The SCF concluded with Secretary Kerry moderating a discussion on regional issues, including Syria, Iran, and Yemen, Little added.
Hagel also met with Lebanese President Sleiman "to affirm the strength of the U.S.-Lebanon partnership and our shared view of the importance of the Lebanese Armed Forces as Lebanon's sole legitimate defense force to Lebanon's stability and unity," Little said.
SEC CHARGES FORMER CEO OF EDUCATION SERVICES PROVIDER WITH STEALING TENS OF MILLIONS
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged the former CEO of an education services provider based in China with stealing tens of millions of dollars from investors in a U.S. public offering, and charged another executive with illegally dumping his stock in the company after he helped steal valuable company assets.
The SEC alleges that ChinaCast Education Corporation’s former CEO and chairman of the board Chan Tze Ngon illicitly transferred $41 million out of the $43.8 million raised from investors to a purported subsidiary in which he secretly held a controlling 50 percent ownership stake. From there, Chan transferred investor funds to another entity outside ChinaCast’s control. Chan also secretly pledged $30.4 million of ChinaCast’s cash deposits to secure the debts of entities unrelated to ChinaCast. None of the transactions were disclosed in the periodic and other reports signed by Chan and filed with the SEC.
The SEC further alleges that Jiang Xiangyuan, ChinaCast’s former president for operations in China, avoided more than $200,000 in losses by illegally selling approximately 50,000 ChinaCast shares after participating in the ownership transfer of one of company’s revenue-generating colleges before it was publicly disclosed by a new management team. ChinaCast had a market capitalization of more than $200 million before these alleged frauds came to light. After Chan and Jiang were terminated and their misconduct was publicly disclosed by new management, ChinaCast’s market capitalization dropped to less than $5 million.
“The massive fraud perpetrated by Chan destroyed hundreds of millions of dollars in market value, and Jiang’s brazen insider trading allowed him to profit by dumping his own shares on the market before the fraud was exposed,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
According to the SEC’s complaint filed in federal court in Manhattan, ChinaCast entered the U.S. capital markets through a reverse merger in December 2006, and its common stock was listed on the NASDAQ from Oct. 29, 2007 to June 25, 2012. ChinaCast conducted multiple public stock offerings in the U.S., with the second one occurring in December 2009 when ChinaCast represented that the proceeds would be used for “working capital, future acquisitions, and general corporate purposes.” Chan instead directed and engaged in the transactions that moved investor funds outside ChinaCast’s corporate structure for his personal benefit. He did so without seeking or obtaining the approval of ChinaCast’s board of directors, and the transactions were not publicly disclosed until ChinaCast’s new management prompted the company to file a Form 8-K on Dec. 21, 2012, disclosing Chan’s misconduct.
The SEC alleges that ChinaCast falsely stated in multiple SEC filings signed by Chan that the company indirectly owned 98.5 percent of ChinaCast Technology (HK) Limited – the purported subsidiary to which Chan first transferred investor funds. However, ChinaCast actually held only an indirect 49.2 percent interest while Chan personally owned 50 percent. Chan also signed a number of periodic reports falsely stating that offering proceeds were under ChinaCast’s control and falsely including those funds in amounts that ChinaCast reported as cash and cash equivalents. Chan also defrauded shareholders and prospective investors by secretly pledging ChinaCast’s existing term cash deposits as collateral to secure debts incurred by various third parties that had nothing to do with ChinaCast’s business. Chan signed periodic reports falsely stating that ChinaCast’s cash and cash equivalents were completely unencumbered.
“Chan orchestrated the systematic looting of ChinaCast and hid his misconduct by repeatedly lying to investors about the company’s assets until he lost control of the board and was terminated,” said Sanjay Wadhwa, Senior Associate Director for Enforcement in the SEC’s New York office. “Officers and directors who misuse their access to the U.S. capital markets will be held accountable for their insidious behavior.”
According to the SEC’s complaint, Jiang was a member of the senior management group headed by Chan. Jiang engaged in illegal trading based on inside information by selling his shares on March 28, 2012, at $4.59 per share. After Chan’s management group lost control of the board, they transferred ownership of ChinaCast’s three profitable brick-and-mortar colleges away from ChinaCast to Jiang and the dean of one of the colleges. They were later sold to others. At least one of the colleges was transferred to Jiang and the dean three weeks before Jiang’s March 28 stock sale. Jiang was terminated on March 29, and NASDAQ suspended trading in ChinaCast on April 2 due to its failure to file an annual report for 2011. ChinaCast was later delisted. When over-the-counter trading resumed on June 25 after multiple disclosures made by new management about former management’s misconduct, the stock opened at 55 cents per share and closed at 82 cents. ChinaCast’s stock is currently trading at 10 cents per share.
Chan is charged with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 as well as violations of various corporate reporting, recordkeeping, and internal controls provisions. Jiang is charged with illegal insider trading in violations of the same antifraud provisions. The SEC seeks disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, permanent injunctions, and officer-and-director bars.
The SEC’s investigation, which is continuing, has been conducted by Dominick Barbieri and George Stepaniuk in the SEC’s New York office. The SEC’s litigation will be led by Nancy Brown. Assisting in the investigation was the SEC’s Cross Border Working Group, which has representatives from each of the agency’s major divisions and offices and focuses on U.S. companies with substantial foreign operations.
The Securities and Exchange Commission today charged the former CEO of an education services provider based in China with stealing tens of millions of dollars from investors in a U.S. public offering, and charged another executive with illegally dumping his stock in the company after he helped steal valuable company assets.
The SEC alleges that ChinaCast Education Corporation’s former CEO and chairman of the board Chan Tze Ngon illicitly transferred $41 million out of the $43.8 million raised from investors to a purported subsidiary in which he secretly held a controlling 50 percent ownership stake. From there, Chan transferred investor funds to another entity outside ChinaCast’s control. Chan also secretly pledged $30.4 million of ChinaCast’s cash deposits to secure the debts of entities unrelated to ChinaCast. None of the transactions were disclosed in the periodic and other reports signed by Chan and filed with the SEC.
The SEC further alleges that Jiang Xiangyuan, ChinaCast’s former president for operations in China, avoided more than $200,000 in losses by illegally selling approximately 50,000 ChinaCast shares after participating in the ownership transfer of one of company’s revenue-generating colleges before it was publicly disclosed by a new management team. ChinaCast had a market capitalization of more than $200 million before these alleged frauds came to light. After Chan and Jiang were terminated and their misconduct was publicly disclosed by new management, ChinaCast’s market capitalization dropped to less than $5 million.
“The massive fraud perpetrated by Chan destroyed hundreds of millions of dollars in market value, and Jiang’s brazen insider trading allowed him to profit by dumping his own shares on the market before the fraud was exposed,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
According to the SEC’s complaint filed in federal court in Manhattan, ChinaCast entered the U.S. capital markets through a reverse merger in December 2006, and its common stock was listed on the NASDAQ from Oct. 29, 2007 to June 25, 2012. ChinaCast conducted multiple public stock offerings in the U.S., with the second one occurring in December 2009 when ChinaCast represented that the proceeds would be used for “working capital, future acquisitions, and general corporate purposes.” Chan instead directed and engaged in the transactions that moved investor funds outside ChinaCast’s corporate structure for his personal benefit. He did so without seeking or obtaining the approval of ChinaCast’s board of directors, and the transactions were not publicly disclosed until ChinaCast’s new management prompted the company to file a Form 8-K on Dec. 21, 2012, disclosing Chan’s misconduct.
The SEC alleges that ChinaCast falsely stated in multiple SEC filings signed by Chan that the company indirectly owned 98.5 percent of ChinaCast Technology (HK) Limited – the purported subsidiary to which Chan first transferred investor funds. However, ChinaCast actually held only an indirect 49.2 percent interest while Chan personally owned 50 percent. Chan also signed a number of periodic reports falsely stating that offering proceeds were under ChinaCast’s control and falsely including those funds in amounts that ChinaCast reported as cash and cash equivalents. Chan also defrauded shareholders and prospective investors by secretly pledging ChinaCast’s existing term cash deposits as collateral to secure debts incurred by various third parties that had nothing to do with ChinaCast’s business. Chan signed periodic reports falsely stating that ChinaCast’s cash and cash equivalents were completely unencumbered.
“Chan orchestrated the systematic looting of ChinaCast and hid his misconduct by repeatedly lying to investors about the company’s assets until he lost control of the board and was terminated,” said Sanjay Wadhwa, Senior Associate Director for Enforcement in the SEC’s New York office. “Officers and directors who misuse their access to the U.S. capital markets will be held accountable for their insidious behavior.”
According to the SEC’s complaint, Jiang was a member of the senior management group headed by Chan. Jiang engaged in illegal trading based on inside information by selling his shares on March 28, 2012, at $4.59 per share. After Chan’s management group lost control of the board, they transferred ownership of ChinaCast’s three profitable brick-and-mortar colleges away from ChinaCast to Jiang and the dean of one of the colleges. They were later sold to others. At least one of the colleges was transferred to Jiang and the dean three weeks before Jiang’s March 28 stock sale. Jiang was terminated on March 29, and NASDAQ suspended trading in ChinaCast on April 2 due to its failure to file an annual report for 2011. ChinaCast was later delisted. When over-the-counter trading resumed on June 25 after multiple disclosures made by new management about former management’s misconduct, the stock opened at 55 cents per share and closed at 82 cents. ChinaCast’s stock is currently trading at 10 cents per share.
Chan is charged with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 as well as violations of various corporate reporting, recordkeeping, and internal controls provisions. Jiang is charged with illegal insider trading in violations of the same antifraud provisions. The SEC seeks disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, permanent injunctions, and officer-and-director bars.
The SEC’s investigation, which is continuing, has been conducted by Dominick Barbieri and George Stepaniuk in the SEC’s New York office. The SEC’s litigation will be led by Nancy Brown. Assisting in the investigation was the SEC’s Cross Border Working Group, which has representatives from each of the agency’s major divisions and offices and focuses on U.S. companies with substantial foreign operations.
SEC CHARGES 10 BROKERS IN $125 MILLION INVESTMENT SCHEME
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today announced charges against 10 former brokers at an Albany, N.Y.-based firm at the center of a $125 million investment scheme for which the co-owners have received jail sentences.
The SEC filed an emergency action in 2010 to halt the scheme at McGinn Smith & Co. and freeze the assets of the firm and its owners Timothy M. McGinn and David L. Smith, who were later charged criminally by the U.S. Attorney’s Office for the Northern District of New York and found guilty.
The SEC’s Enforcement Division alleges that 10 brokers who recommended the unregistered investment products involved in the scheme made material misrepresentations and omissions to their customers. The registered representatives ignored red flags that should have led them to conduct more due diligence into the securities they were recommending to their customers.
“As securities professionals, these brokers had an important duty to determine whether the securities they recommended to customers were suitable, especially when red flags were apparent. These registered representatives performed inadequate due diligence and failed to fulfill their duties,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
The SEC’s order names 10 former McGinn Smith brokers in the administrative proceeding:
Donald J. Anthony, Jr. of Loudonville, N.Y.
Frank H. Chiappone of Clifton Park, NY.
Richard D. Feldmann of Delmar, N.Y.
William P. Gamello of Rexford, N.Y.
Andrew G. Guzzetti of Saratoga Springs, N.Y.
William F. Lex of Phoenixville, Pa.
Thomas E. Livingston of Slingerlands, N.Y.
Brian T. Mayer of Princeton, N.J.
Philip S. Rabinovich of Roslyn, N.Y.
Ryan C. Rogers of East Northport, N.Y.
According to the SEC’s order, the scheme victimized approximately 750 investors and led to $80 million in investor losses. Guzzetti was the managing director of McGinn Smith’s private client group from 2004 to 2009, and he supervised brokers who recommended the firm’s offerings. The SEC’s Enforcement Division alleges that despite his knowledge of serious red flags, Guzzetti failed to take any action to investigate the offerings and instead encouraged the brokers to sell the notes to McGinn Smith customers.
The SEC’s Enforcement Division alleges that the other nine brokers charged in the administrative proceeding should have conducted a searching inquiry prior to recommending the products to their customers. The brokers continued to sell McGinn Smith notes even after being told that customers placed in some of the firm’s offerings could only be redeemed if a replacement customer was found. This was contrary to the offering documents. In January 2008, the brokers learned that four earlier offerings that raised almost $90 million had defaulted, yet they failed to conduct any inquiry into subsequent offerings and continued to recommend McGinn Smith notes.
The SEC’s order alleges that the misconduct of Anthony, Chiappone, Feldmann, Gamello, Lex, Livingston, Mayer, Rabinovich, and Rogers resulted in violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The order alleges that Guzzetti failed to reasonably supervise the nine brokers, giving rise to liability under Section 15(b)(6) of the Exchange Act, incorporating by reference Section 15(b)(4).
The SEC’s civil case continues against the firm as well as McGinn and Smith, who were sentenced to 15 and 10 years imprisonment respectively in the criminal case.
The SEC’s investigation was conducted by David Stoelting, Kevin P. McGrath, Lara Shalov Mehraban, Haimavathi V. Marlier, Joshua Newville, Kerri Palen, Michael Paley, and Roseann Daniello of the New York office. Mr. Stoelting, Ms. Marlier and Michael Birnbaum will lead the Enforcement Division’s litigation.
The Securities and Exchange Commission today announced charges against 10 former brokers at an Albany, N.Y.-based firm at the center of a $125 million investment scheme for which the co-owners have received jail sentences.
The SEC filed an emergency action in 2010 to halt the scheme at McGinn Smith & Co. and freeze the assets of the firm and its owners Timothy M. McGinn and David L. Smith, who were later charged criminally by the U.S. Attorney’s Office for the Northern District of New York and found guilty.
The SEC’s Enforcement Division alleges that 10 brokers who recommended the unregistered investment products involved in the scheme made material misrepresentations and omissions to their customers. The registered representatives ignored red flags that should have led them to conduct more due diligence into the securities they were recommending to their customers.
“As securities professionals, these brokers had an important duty to determine whether the securities they recommended to customers were suitable, especially when red flags were apparent. These registered representatives performed inadequate due diligence and failed to fulfill their duties,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
The SEC’s order names 10 former McGinn Smith brokers in the administrative proceeding:
Donald J. Anthony, Jr. of Loudonville, N.Y.
Frank H. Chiappone of Clifton Park, NY.
Richard D. Feldmann of Delmar, N.Y.
William P. Gamello of Rexford, N.Y.
Andrew G. Guzzetti of Saratoga Springs, N.Y.
William F. Lex of Phoenixville, Pa.
Thomas E. Livingston of Slingerlands, N.Y.
Brian T. Mayer of Princeton, N.J.
Philip S. Rabinovich of Roslyn, N.Y.
Ryan C. Rogers of East Northport, N.Y.
According to the SEC’s order, the scheme victimized approximately 750 investors and led to $80 million in investor losses. Guzzetti was the managing director of McGinn Smith’s private client group from 2004 to 2009, and he supervised brokers who recommended the firm’s offerings. The SEC’s Enforcement Division alleges that despite his knowledge of serious red flags, Guzzetti failed to take any action to investigate the offerings and instead encouraged the brokers to sell the notes to McGinn Smith customers.
The SEC’s Enforcement Division alleges that the other nine brokers charged in the administrative proceeding should have conducted a searching inquiry prior to recommending the products to their customers. The brokers continued to sell McGinn Smith notes even after being told that customers placed in some of the firm’s offerings could only be redeemed if a replacement customer was found. This was contrary to the offering documents. In January 2008, the brokers learned that four earlier offerings that raised almost $90 million had defaulted, yet they failed to conduct any inquiry into subsequent offerings and continued to recommend McGinn Smith notes.
The SEC’s order alleges that the misconduct of Anthony, Chiappone, Feldmann, Gamello, Lex, Livingston, Mayer, Rabinovich, and Rogers resulted in violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The order alleges that Guzzetti failed to reasonably supervise the nine brokers, giving rise to liability under Section 15(b)(6) of the Exchange Act, incorporating by reference Section 15(b)(4).
The SEC’s civil case continues against the firm as well as McGinn and Smith, who were sentenced to 15 and 10 years imprisonment respectively in the criminal case.
The SEC’s investigation was conducted by David Stoelting, Kevin P. McGrath, Lara Shalov Mehraban, Haimavathi V. Marlier, Joshua Newville, Kerri Palen, Michael Paley, and Roseann Daniello of the New York office. Mr. Stoelting, Ms. Marlier and Michael Birnbaum will lead the Enforcement Division’s litigation.
SEC CHARGES FORMER QUALCOMM INC EXECUTIVE WITH INSIDER TRADING
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged a former executive at Qualcomm Inc. and his former financial advisor with insider trading ahead of major announcements by the San Diego-based wireless technology company for more than a quarter-million dollars in profits.
The SEC alleges that Jing Wang, a former executive vice president and president of global business operations at Qualcomm, used a secret offshore brokerage account to make illegal trades based on confidential information that he learned on the job. Gary Yin, a former registered representative at Merrill Lynch, helped Wang set up the account. Yin also created a secret offshore account of his own and traded on the non-public information gleaned from Wang. When Wang eventually realized that insider trading in the offshore accounts still may be discovered by the SEC or other regulators, he concocted a plan to conceal his trading activity by claiming the trades were made by his brother. Wang even convinced Yin to travel to China and go over the account statements with Wang’s brother so he could explain the trades if asked by investigators.
“Wang violated his duty as an insider to protect confidential information when he made timely illegal trades ahead of major announcements to the detriment of other Qualcomm shareholders who did not have the same information,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. “Wang and Yin went to extraordinary lengths to conceal their trading and cover it up afterwards, but despite their expansive efforts they still wound up in law enforcement’s crosshairs.”
In a parallel action, the U.S. Attorney’s Office for the Southern District of California today announced criminal charges against Wang and Yin.
According to the SEC’s complaint, Wang and Yin became friends in 2005 as members of the same church. When Wang learned that Yin was a financial advisor at Merrill Lynch, he asked Yin to manage his money and opened a number of brokerage accounts at the firm’s San Diego branch office. Each account was disclosed to Qualcomm because, as a company officer, Wang was restricted in his ability to trade Qualcomm stock and required to pre-clear all Qualcomm trades with the company.
The SEC alleges that in early 2006, Wang approached Yin about hiding cash transactions. Yin suggested that Wang create an entity registered in the British Virgin Islands (BVI) and use the name of a non-U.S. citizen family member as the beneficial owner. Then he could open a brokerage account in the newly created entity’s name. Yin then helped Wang set up a secret account in the name of a BVI company called Unicorn Global Enterprises, and Wang’s older brother was listed as the owner. Yin similarly created his own BVI-registered entity named Pacific Rim and put it in his mother-in-law’s name. Yin opened a Merrill Lynch brokerage account for Pacific Rim and used it to hide funds that he was using for investments.
The SEC alleges that Wang and Yin used their secret offshore accounts to trade on material, non-public information that Wang learned as an executive at Qualcomm. In early 2010, Wang was aware that Qualcomm executives were planning a board proposal to increase Qualcomm’s quarterly dividends and request authority to initiate a stock repurchase program. Qualcomm informed Wang and all executives that they would not be permitted to trade Qualcomm stock. On March 1, Wang attended a Qualcomm board meeting where the quarterly dividend increase and stock repurchase were approved. Wang immediately instructed Yin to use all of the funds in the offshore Unicorn account to purchase Qualcomm stock. Yin knew that Wang did not pre-clear these trades and realized that the purchase was out of character for Wang because he previously never purchased Qualcomm stock on the open market in his Merrill Lynch accounts. Within the hour of executing the trades for Wang, Yin himself bought Qualcomm stock on the basis of the material, non-public information. The stock price increased 6.7 percent after Qualcomm publicly announced the quarterly cash dividend and stock repurchase program. Wang and Yin profited when they sold all of their shares.
According to the SEC’s complaint, Wang used the funds from that sale to conduct insider trading again – this time in the shares of San Jose-based Atheros Communications, which was the highly confidential target of a planned acquisition by Qualcomm. Wang was regularly briefed on the transaction internally tabbed as “Project Tango” to protect its confidentiality. Wang instructed Yin to sell all of his Qualcomm stock in the Unicorn account on Dec. 2, 2010, and prepare to buy as many shares of Atheros stock as possible with the funds in that account. He told Yin that he was leaving on a trip to China and would contact him to execute the Atheros trade. On December 6, Wang attended a Qualcomm board meeting in Hong Kong and a resolution was passed to pursue the acquisition. Wang learned that Qualcomm planned to acquire Atheros at $45 per share. Wang and Yin immediately communicated several times through phone calls and a text message, and Wang then purchased the maximum number of shares he could purchase with the existing funds in the Unicorn account at prices between $34 and $35 per share. At Wang’s encouragement, Yin also purchased Atheros stock for himself in his offshore account. When the news became public in early January, Atheros stock increased more than 20 percent. Yin sold all of his Atheros shares in the Pacific Rim account on January 12, and Wang sold his Atheros shares in the Unicorn account on January 25.
According to the SEC’s complaint, Wang took his next insider trading step merely four minutes after selling the Atheros stock, using the proceeds to purchase Qualcomm shares in advance of a company announcement that it would raise its revenue and earnings guidance for the 2011 fiscal year. Wang had learned the confidential information prior to the board meeting he attended in Hong Kong, where Qualcomm’s better-than-expected first quarter financial performance was further discussed. Wang learned that Qualcomm planned to announce its earnings results on January 26, and thus purchased his Qualcomm shares the day before the announcement. After Qualcomm issued a press release to announcing its positive first quarter results, Qualcomm’s stock increased 5.9 percent.
The SEC alleges that Wang made more than $244,000 in illegal profits through the insider trading scheme, and Yin realized gains of more than $27,000. Wang eventually realized that his illegal trading may be detected by Merrill Lynch or others. Wang first asked Yin to delete records of the trades in the Unicorn account, but because they were permanent records in Merrill Lynch’s systems they could not be erased. Around January 2012, Wang directed Yin to establish a new BVI corporation named Clearview Resources and open a new account at Merrill Lynch to which they transferred the insider trading proceeds in the Unicorn account to further distance Wang from the suspicious trades. A few months later, Wang informed Yin that the trades may have been detected because the SEC had subpoenaed his e-mails. So Wang devised a cover story and convinced Yin if ever questioned to say that the Atheros trades were made by Wang’s brother. Because Yin had never communicated with Wang’s brother, Wang instructed him to travel to China with the Unicorn account statements and review the trades with his brother so he could explain the trading if asked. Yin did so in May 2012. To further hide Wang’s ownership of the Unicorn account and his link to the Atheros trades, Yin removed the Unicorn account from Wang’s “household” in Merrill Lynch’s computer system in July 2012. “Householding” is a function used by Merrill Lynch to link related accounts.
The SEC's complaint charges Wang, who lives in Del Mar, Calif., with violating Sections 10(b) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and 16a-3. Yin, who lives in San Diego, is charged with violating Section 10(b) of the Exchange Act and Rule 10b-5. The SEC’s complaint seeks disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, and permanent injunctions. The SEC also seeks an officer-and-director bar against Wang.
The SEC’s investigation has been conducted by Ann C. Kim, Wendy E. Pearson, Nina Yamamoto, and Finola H. Manvelian of the Los Angeles Regional Office. The SEC’s litigation will be led by Sam Puathasnanon. The SEC appreciates the assistance of the Department of Justice’s Criminal Division, the U.S. Attorney’s Office for the Southern District of California, and the Federal Bureau of Investigation.
The Securities and Exchange Commission today charged a former executive at Qualcomm Inc. and his former financial advisor with insider trading ahead of major announcements by the San Diego-based wireless technology company for more than a quarter-million dollars in profits.
The SEC alleges that Jing Wang, a former executive vice president and president of global business operations at Qualcomm, used a secret offshore brokerage account to make illegal trades based on confidential information that he learned on the job. Gary Yin, a former registered representative at Merrill Lynch, helped Wang set up the account. Yin also created a secret offshore account of his own and traded on the non-public information gleaned from Wang. When Wang eventually realized that insider trading in the offshore accounts still may be discovered by the SEC or other regulators, he concocted a plan to conceal his trading activity by claiming the trades were made by his brother. Wang even convinced Yin to travel to China and go over the account statements with Wang’s brother so he could explain the trades if asked by investigators.
“Wang violated his duty as an insider to protect confidential information when he made timely illegal trades ahead of major announcements to the detriment of other Qualcomm shareholders who did not have the same information,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. “Wang and Yin went to extraordinary lengths to conceal their trading and cover it up afterwards, but despite their expansive efforts they still wound up in law enforcement’s crosshairs.”
In a parallel action, the U.S. Attorney’s Office for the Southern District of California today announced criminal charges against Wang and Yin.
According to the SEC’s complaint, Wang and Yin became friends in 2005 as members of the same church. When Wang learned that Yin was a financial advisor at Merrill Lynch, he asked Yin to manage his money and opened a number of brokerage accounts at the firm’s San Diego branch office. Each account was disclosed to Qualcomm because, as a company officer, Wang was restricted in his ability to trade Qualcomm stock and required to pre-clear all Qualcomm trades with the company.
The SEC alleges that in early 2006, Wang approached Yin about hiding cash transactions. Yin suggested that Wang create an entity registered in the British Virgin Islands (BVI) and use the name of a non-U.S. citizen family member as the beneficial owner. Then he could open a brokerage account in the newly created entity’s name. Yin then helped Wang set up a secret account in the name of a BVI company called Unicorn Global Enterprises, and Wang’s older brother was listed as the owner. Yin similarly created his own BVI-registered entity named Pacific Rim and put it in his mother-in-law’s name. Yin opened a Merrill Lynch brokerage account for Pacific Rim and used it to hide funds that he was using for investments.
The SEC alleges that Wang and Yin used their secret offshore accounts to trade on material, non-public information that Wang learned as an executive at Qualcomm. In early 2010, Wang was aware that Qualcomm executives were planning a board proposal to increase Qualcomm’s quarterly dividends and request authority to initiate a stock repurchase program. Qualcomm informed Wang and all executives that they would not be permitted to trade Qualcomm stock. On March 1, Wang attended a Qualcomm board meeting where the quarterly dividend increase and stock repurchase were approved. Wang immediately instructed Yin to use all of the funds in the offshore Unicorn account to purchase Qualcomm stock. Yin knew that Wang did not pre-clear these trades and realized that the purchase was out of character for Wang because he previously never purchased Qualcomm stock on the open market in his Merrill Lynch accounts. Within the hour of executing the trades for Wang, Yin himself bought Qualcomm stock on the basis of the material, non-public information. The stock price increased 6.7 percent after Qualcomm publicly announced the quarterly cash dividend and stock repurchase program. Wang and Yin profited when they sold all of their shares.
According to the SEC’s complaint, Wang used the funds from that sale to conduct insider trading again – this time in the shares of San Jose-based Atheros Communications, which was the highly confidential target of a planned acquisition by Qualcomm. Wang was regularly briefed on the transaction internally tabbed as “Project Tango” to protect its confidentiality. Wang instructed Yin to sell all of his Qualcomm stock in the Unicorn account on Dec. 2, 2010, and prepare to buy as many shares of Atheros stock as possible with the funds in that account. He told Yin that he was leaving on a trip to China and would contact him to execute the Atheros trade. On December 6, Wang attended a Qualcomm board meeting in Hong Kong and a resolution was passed to pursue the acquisition. Wang learned that Qualcomm planned to acquire Atheros at $45 per share. Wang and Yin immediately communicated several times through phone calls and a text message, and Wang then purchased the maximum number of shares he could purchase with the existing funds in the Unicorn account at prices between $34 and $35 per share. At Wang’s encouragement, Yin also purchased Atheros stock for himself in his offshore account. When the news became public in early January, Atheros stock increased more than 20 percent. Yin sold all of his Atheros shares in the Pacific Rim account on January 12, and Wang sold his Atheros shares in the Unicorn account on January 25.
According to the SEC’s complaint, Wang took his next insider trading step merely four minutes after selling the Atheros stock, using the proceeds to purchase Qualcomm shares in advance of a company announcement that it would raise its revenue and earnings guidance for the 2011 fiscal year. Wang had learned the confidential information prior to the board meeting he attended in Hong Kong, where Qualcomm’s better-than-expected first quarter financial performance was further discussed. Wang learned that Qualcomm planned to announce its earnings results on January 26, and thus purchased his Qualcomm shares the day before the announcement. After Qualcomm issued a press release to announcing its positive first quarter results, Qualcomm’s stock increased 5.9 percent.
The SEC alleges that Wang made more than $244,000 in illegal profits through the insider trading scheme, and Yin realized gains of more than $27,000. Wang eventually realized that his illegal trading may be detected by Merrill Lynch or others. Wang first asked Yin to delete records of the trades in the Unicorn account, but because they were permanent records in Merrill Lynch’s systems they could not be erased. Around January 2012, Wang directed Yin to establish a new BVI corporation named Clearview Resources and open a new account at Merrill Lynch to which they transferred the insider trading proceeds in the Unicorn account to further distance Wang from the suspicious trades. A few months later, Wang informed Yin that the trades may have been detected because the SEC had subpoenaed his e-mails. So Wang devised a cover story and convinced Yin if ever questioned to say that the Atheros trades were made by Wang’s brother. Because Yin had never communicated with Wang’s brother, Wang instructed him to travel to China with the Unicorn account statements and review the trades with his brother so he could explain the trading if asked. Yin did so in May 2012. To further hide Wang’s ownership of the Unicorn account and his link to the Atheros trades, Yin removed the Unicorn account from Wang’s “household” in Merrill Lynch’s computer system in July 2012. “Householding” is a function used by Merrill Lynch to link related accounts.
The SEC's complaint charges Wang, who lives in Del Mar, Calif., with violating Sections 10(b) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and 16a-3. Yin, who lives in San Diego, is charged with violating Section 10(b) of the Exchange Act and Rule 10b-5. The SEC’s complaint seeks disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, and permanent injunctions. The SEC also seeks an officer-and-director bar against Wang.
The SEC’s investigation has been conducted by Ann C. Kim, Wendy E. Pearson, Nina Yamamoto, and Finola H. Manvelian of the Los Angeles Regional Office. The SEC’s litigation will be led by Sam Puathasnanon. The SEC appreciates the assistance of the Department of Justice’s Criminal Division, the U.S. Attorney’s Office for the Southern District of California, and the Federal Bureau of Investigation.
SPANNING HALF A MILLION LIGHT YEARS
FROM: NASA
Clues to the Growth of the Colossus in Coma
A team of astronomers has discovered enormous arms of hot gas in the Coma cluster of galaxies by using NASA’s Chandra X-ray Observatory and ESA’s XMM-Newton. These features, which span at least half a million light years, provide insight into how the Coma cluster has grown through mergers of smaller groups and clusters of galaxies to become one of the largest structures in the universe held together by gravity.
A new composite image, with Chandra data in pink and optical data from the Sloan Digital Sky Survey appearing in white and blue, features these spectacular arms. In this image, the Chandra data have been processed so extra detail can be seen.
The X-ray emission is from multimillion-degree gas and the optical data shows galaxies in the Coma Cluster, which contain only about one-sixth the mass in hot gas. Only the brightest X-ray emission is shown here, to emphasize the arms, but the hot gas is present over the entire field of view.
Researchers think that these arms were most likely formed when smaller galaxy clusters had their gas stripped away by the head wind created by the motion of the cluster through the hot gas, in much the same way that the headwind created by a roller coaster blows the hats off riders.
Coma is an unusual galaxy cluster because it contains not one, but two giant elliptical galaxies near its center. These two giant elliptical galaxies are probably the vestiges from each of the two largest clusters that merged with Coma in the past. The researchers also uncovered other signs of past collisions and mergers in the data.
From their length, and the speed of sound in the hot gas (about four million km/hr), the newly discovered X-ray arms are estimated to be about 300 million years old, and they appear to have a rather smooth shape. This gives researchers some clues about the conditions of the hot gas in Coma. Most theoretical models expect that mergers between clusters like those in Coma will produce strong turbulence, like ocean water that has been churned by many passing ships. Instead, the smooth shape of these lengthy arms points to a rather calm setting for the hot gas in the Coma cluster, even after many mergers.
Large-scale magnetic fields are likely responsible for the small amount of turbulence that is present in Coma. Estimating the amount of turbulence in a galaxy cluster has been a challenging problem for astrophysicists. Researchers have found a range of answers, some of them conflicting, and so observations of other clusters are needed.
Two of the arms appear to be connected to a group of galaxies located about two million light years from the center of Coma. One or both of these arms connects to a larger structure seen in the XMM-Newton data, and spans a distance or at least 1.5 million light years. A very thin tail also appears behind one of the galaxies in Coma. This is probably evidence of gas being stripped from a single galaxy, in addition to the groups or clusters that have merged there.
These new results on the Coma cluster, which incorporate over six days worth of Chandra observing time, will appear in the September 20, 2013, issue of the journal Science. The first author of the paper is Jeremy Sanders from the Max Planck Institute for Extraterrestrial Physics in Garching, Germany. The co-authors are Andy Fabian from Cambridge University in the UK; Eugene Churazov from the Max Planck Institute for Astrophysics in Garching, Germany; Alexander Schekochihin from University of Oxford in the UK; Aurora Simionescu from Stanford University in Stanford, CA; Stephen Walker from Cambridge University in the UK and Norbert Werner from Stanford University in Stanford, CA.
NASA's Marshall Space Flight Center in Huntsville, Ala., manages the Chandra Program for NASA's Science Mission Directorate in Washington. The Smithsonian Astrophysical Observatory controls Chandra's science and flight operations from Cambridge, Mass.
Credits: X-ray: NASA/CXC/MPE/J. Sanders et al; Optical: SDSS
Thursday, September 26, 2013
DOD SAYS RECRUITING GOALS BENG MET
FROM: U.S. DEFENSE DEPARTMENT
Active Services Meet Fiscal Year Recruiting Goals Through August
American Forces Press Service
WASHINGTON, Sept. 26, 2013 - All four active services met or exceeded their numerical accession goals for fiscal year 2013 through August, Pentagon officials announced yesterday.
Here are the numbers for the first 11 months of the fiscal year:
-- Army: 62,453 accessions, 101 percent of its goal of 61,620;
-- Navy: 36,565 accessions, 100 percent of its goal of 36,565;
-- Marine Corps: 28,128 accessions, 100 percent of its goal of 28,085; and
-- Air Force: 24,335 accessions, 100 percent of its goal of 24,335.
The Army, Air Force, and Marine Corps exhibited strong retention, officials said. The Navy's retention numbers were strong in the mid-career and career categories, they added, and its achievement of 85 percent retention in the initial category is a result of reduced accessions from four to six years ago.
Five of the six reserve components met or exceeded their numerical fiscal year accession goals through August. The Army Reserve remains 3,206 accessions short of its fiscal goal.
Here are the reserve component numbers:
-- Army National Guard: 45,539 accessions, 101 percent of its goal of 45,047;
-- Army Reserve: 24,114 accessions, 88 percent of its goal of 27,320;
-- Navy Reserve: 5,296 accessions, 101 percent of its goal of 5,241;
-- Marine Corps Reserve: 8,778 accessions, 100 percent of its goal of 8,744;
-- Air National Guard: 9,465 accessions, 100 percent of its goal of 9,465; and
-- Air Force Reserve: 7,040 accessions, 126 percent of its goal of 5,593.
All reserve components have met their attrition goals, and current trends are expected to continue, officials said, adding that this indicator lags behind accessions by a month due to data availability.
SECRETARY OF STATE KERRY'S REMARK'S AFTER P-5+1 MINISTERIAL ON IRAN
FROM: U.S. STATE DEPARTMENT
Remarks After the P-5+1 Ministerial on Iran
Remarks
John Kerry
Secretary of State
New York City
September 26, 2013
SECRETARY KERRY: First of all, I think you’ve heard some of the other ministers. We had a constructive meeting, and I think all of us were pleased that Foreign Minister Zarif came and made a presentation to us, which was very different in tone and very different in the vision that he held out with respect to possibilities of the future.
I have just met with him now on a side meeting, which we took a moment to explore a little further the possibilities of how to proceed based on what President Obama laid out in his speech to the General Assembly earlier this week. And so we’ve agreed to try to continue a process that we’ll try to make concrete, to find a way to answer the questions that people have about Iran’s nuclear program.
Needless to say, one meeting and a change in tone, which was welcome, doesn’t answer those questions yet, and there’s a lot of work to be done. So we will engage in that work, obviously, and we hope very, very much – all of us – that we can get concrete results that will answer the outstanding questions regarding the program. But I think all of us were pleased that the Foreign Minister came today, that he did put some possibilities on the table. Now it’s up to people to do the hard work of trying to fill out what those possibilities could do.
Finally, let me just say that prior to this meeting, I was pleased to have a meeting with Foreign Minister Sergey Lavrov, and we did reach agreement with respect to the resolution. We’re now doing the final work of pulling that language together, but it’s our hope that that process between the Organization for the Prevention of Chemical Weapons and the United Nations and its resolution can now move forward and give life, hopefully, to the removal and destruction of chemical weapons from Syria.
Thank you all very, very much.
Remarks After the P-5+1 Ministerial on Iran
Remarks
John Kerry
Secretary of State
New York City
September 26, 2013
SECRETARY KERRY: First of all, I think you’ve heard some of the other ministers. We had a constructive meeting, and I think all of us were pleased that Foreign Minister Zarif came and made a presentation to us, which was very different in tone and very different in the vision that he held out with respect to possibilities of the future.
I have just met with him now on a side meeting, which we took a moment to explore a little further the possibilities of how to proceed based on what President Obama laid out in his speech to the General Assembly earlier this week. And so we’ve agreed to try to continue a process that we’ll try to make concrete, to find a way to answer the questions that people have about Iran’s nuclear program.
Needless to say, one meeting and a change in tone, which was welcome, doesn’t answer those questions yet, and there’s a lot of work to be done. So we will engage in that work, obviously, and we hope very, very much – all of us – that we can get concrete results that will answer the outstanding questions regarding the program. But I think all of us were pleased that the Foreign Minister came today, that he did put some possibilities on the table. Now it’s up to people to do the hard work of trying to fill out what those possibilities could do.
Finally, let me just say that prior to this meeting, I was pleased to have a meeting with Foreign Minister Sergey Lavrov, and we did reach agreement with respect to the resolution. We’re now doing the final work of pulling that language together, but it’s our hope that that process between the Organization for the Prevention of Chemical Weapons and the United Nations and its resolution can now move forward and give life, hopefully, to the removal and destruction of chemical weapons from Syria.
Thank you all very, very much.
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