Month: December 2010

Controlling Legal Fees and Expert Fees

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With the challenging economy we’ve had over the last couple of years, people are constantly asking me how business is going. The assumption is that people and companies don’t have money for litigation, and so my business is probably suffering. Fortunately, that is not the case, as my business has been growing tremendously over the last few years.

It is true that businesses and individuals don’t have as much money for litigation, but they still have money and they still have to litigate some things to keep their businesses and lives intact.  However, there is a legitimate concern about the legal fees and expert fees that are going to be incurred, and so consumers are choosing wisely.

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How to Screw Up a Mortgage Modification, Bank of America Style

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I don’t often feel a lot of pity for people who get themselves into debt that they can’t pay off. I was raised in a frugal family. You only buy what you can afford. You save money for emergencies. And no matter what, you pay what you owe.

It’s easy to have no sympathy for those who got themselves deep into credit card debt because they’re irresponsible. (No, it’s not the credit card company’s fault for extending you the credit. It’s your fault for using it.) I don’t feel bad for people who bought houses they couldn’t afford, hoping that down the road they’d have enough equity to refinance and keep their payments “affordable.” That’s just dumb.

Read moreHow to Screw Up a Mortgage Modification, Bank of America Style

Securities Docket Webcast: 2010 Year in Review

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2010 has been a momentous year for securities enforcement, litigation and compliance issues–and there are still a few days left in 2010 for more crazy stuff to happen!

On December 29, 2010, Securities Docket will host its annual “Year in Review” webcast featuring many of the leading bloggers and commentators in the field. The panel will include Compliance Week editor Matt Kelly, Francine McKenna (re: The Auditors) , Mike Koehler (aka the “FCPA Professor“), Francis Pileggi (Delaware corporate law guru), Kevin LaCroix (The D&O Diary), Tracy Coenen (The Fraud Files), Lyle Roberts (The 10b-5 Daily) and Securities Docket’s Bruce Carton.

Read moreSecurities Docket Webcast: 2010 Year in Review

Webcast: Follow the Money – Using Technology to Find Fraud or Defend Financial Investigations

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Last week I presented a webcast for Securities Docket, Follow the Money – Using Technology to Find Fraud or Defend Financial Investigations. In this presentation geared toward attorneys, I gave an overview of some of the technology tools I’m currently using in my practice to provide better, faster financial investigations.

We looked at the process I’m using, as well as some of the results I’ve gotten for clients. This process is ideal for attorneys working on cases involving securities fraud, Ponzi schemes, white collar crime, divorce, tax fraud, and corporate fraud. The archived version of the webcast is available for viewing below.

Read moreWebcast: Follow the Money – Using Technology to Find Fraud or Defend Financial Investigations

Financial Analysis in FCPA Cases

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This week I recorded a podcast for the International Association for Asset Recovery (IAAR), which is accessible on the IAAR site. We talked a bit about where financial investigations are going, and how I am using technology to complete these investigations quicker and more effectively.

David Quinones, host of the podcast and Editorial Director for IAAR, asked how a private sector forensic accountant fits into a Foreign Corrupt Practices Act (FCPA) case.

I talked about two ways that forensic accountants and fraud investigators can be utilized:

Read moreFinancial Analysis in FCPA Cases

Deception About the History of Medifast and Take Shape For Life

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UPDATE: On February 17, 2010, Medifast Inc. filed suit in US District Court, Southern District of California, alleging defamation, violation of California Corporations Code, and unfair business practices. On March 29, 2011, Judge Janis Sammartino dismissed all of Medifast’s claims against me in her ruling on my anti-SLAPP motion.

Robert FitzPatrick filed an absolutely riveting anti-SLAPP motion in the case brought against us by Medifast Inc. (NYSE:MED) and its Take Shape For Life (TSFL) multi-level marketing division. Below is probably the most interesting part of the filing. It discusses at lengthy the shady past of the company, efforts to improperly conceal the prior bad acts, and current dishonesty about Medifast and TSFL. It seems that lying to the court has become routine for Medifast.

Proof that Medifast’s Complaint should be viewed as a SLAPP suit arises out of Plaintiffs’ false, self-serving and misleading allegations, devoid of any facts, as well as Plaintiffs’ fraudulent concealment of relevant facts that show what kind of history Medifast and its predecessor companies carry with them, but do not disclose to the public or its stockholders despite orders to do so by the FTC.

Read moreDeception About the History of Medifast and Take Shape For Life

Atlanta Newspaper Examines MLM Scheme Stream Energy / Ignite

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By Robert FitzPatrick of Pyramid Scheme Alert

In a feature report, a major metropolitan newspaper, the Atlanta Journal-Constitution, examined the MLM scheme, Stream Energy/Ignite, focusing on the question of whether the company is operating a disguised pyramid scheme. Stream is a reseller of utility services, gas and electricity, and operates in several states. Ignite is the multi-level marketing  sales division.  

Read moreAtlanta Newspaper Examines MLM Scheme Stream Energy / Ignite

Is “channel checking” illegal insider trading?

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Bruce Carton of Securities Docket wrote a very interesting article called Who’s Checking Your Channel? The article highlights the practice of “channel checking” which has been something investment analysts have done for a long time. Now it appears that our government is trying to decide whether channel checking is actually illegal insider trading.

I see channel checking as independent research. People are looking into a company, doing things like looking at customer, supplier, employer, and competitor data, in order to find out how the company is really doing. It’s a fact that most of the information about a company comes from the company itself, and that public companies have a vested interested in making things look rosy. It is only through independent research that outsiders have a chance of finding out some of the not-so-rosy things.

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Expert Witness Rule Changes Significant

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Written by Tracy L. Coenen, CPA, CFF

Wisconsin Law JournalStarting Dec. 1, there was a significant change to the Federal Rules of Civil Procedure for expert witness reports.

With this change, Rule 26 dictates that the draft reports of experts will no longer be discoverable, and will be protected under the work product doctrine. In addition, communications between the party’s attorney and the expert witness will be protected, except communications that: relate to the expert’s compensation; identify facts or data provided by the attorney and considered by the expert in forming opinions; or identify assumptions provided by the attorney and relied upon by the expert in forming opinions.

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A Victory For Free Speech in California: Will I Get My Victory?

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UPDATE: On February 17, 2010, Medifast Inc. filed suit in US District Court, Southern District of California, alleging defamation, violation of California Corporations Code, and unfair business practices. On March 29, 2011, Judge Janis Sammartino dismissed all of Medifast’s claims against me in her ruling on my anti-SLAPP motion.

A Swedish film maker, WG Film, won a victory for free speech in California. The documentary film producer made a movie about Dole Food, called “Bananas!”, detailing how the company was using pesticides and how it was treating its Nicaraguan workers. The film wasn’t flattering and, naturally, Dole sued the company for defamation.

The producers filed an anti-SLAPP motion in California, saying that the the movie was protected as free speech. Dole then dismissed the lawsuit, but did so without prejudice, which left an open threat that the lawsuit could be refiled at any time.

Read moreA Victory For Free Speech in California: Will I Get My Victory?