Ex-CFO of ArthroCare Gets Prison Term for $750M Securities Fraud
Michael Gluck, the ex-CFO of ArthroCare Corp., is sentenced to over four years in prison for his role in a $750M financial fraud. Gluk pleaded guilty to securities fraud and conspiracy to commit wire fraud last year.
Gluk, ex-ArthroCare CEO Michael Baker, and others are accused of artificially inflating revenue and sales in an effort to keep the medical device company’s stock price up. As a result, shareholders sustained more than $750M in losses.
Baker was sentenced to 20 years behind bars. Gluk had previously been sentenced to 10 years in prison after he was convicted in 2014 for his role in the scam. However, a federal appeals court overturned the conviction, hence his new plea agreement and sentence. He also must forfeit nearly $678K and pay a $50K fine.
Ex-Bankrate CFO Accused of Criminal Fraud
Edward DiMaria, the ex-CFO of Bankrate, is now facing criminal fraud charges. DiMaria is accused of rigging the financial service firm’s books in an effort to artificially raise the stock price and make a profit for himself and others. Among the tactics alleged are “cookie jar” accounting, which included leaving over $1M in expense accruals that were not supported on the firm’s books and then reversing some of the accruals later on to make earnings go up; making earnings and revenue modifications that were not supported; and lying about the firm’s financial state.
The US Justice Department contends that DiMaria fraudulently manipulated the firm’s revenue and earnings figures that were made public while making millions of dollars through the sale of his Bankrate shares at the inflated prices. DiMaria intends to fight the criminal charges in court.
Last year, the SEC ordered the former Bankrate CFO to pay more than $231K in penalties, disgorgement, plus interest over allegations that he fraudulently rigged Bankrate’s financial outcomes to satisfy the expectations of analysts.
Federal Jury Convicts Martin Shkreli’s Ex-Lawyer for Concealing Fraud
Evan Greebel, the ex-lawyer of Martin Shkreli, has been convicted of conspiring to commit securities fraud and wire fraud. Prosecutors contend that he assisted Shkreli, who was CEO of Retrophin, in stealing millions of dollars and then concealing the scam. They believe that Greebel, who was Retrophin’s outside counsel, conspired with Shkreli to misappropriate the pharmaceutical company’s assets to pay investors that had been bilked and also to defraud Retrophin investors and potential investors by attempting to illegally manipulate the company’s stock price and its trading volume.
Since Greebel’s conviction, however, one jury member is now saying that he wants to further view the evidence. It will be up to a federal judge to decide whether this warrants reopening the case.
Shkreli was convicted last year in an $11M Ponzi scam involving two hedge funds.
Please contact our securities law firm if you suspect that your losses are due to securities fraud. Over the years, our broker fraud lawyers at The SSEK Partners Group has helped thousands of investors in their financial recovery. We represent institutional investors and high net worth individual investors.
Former ArthroCare CFO sentenced to 4-plus years in prison for $750M fraud scheme, Business Journal, January 5, 2018
Ex-Bankrate CFO Charged With Criminal Fraud, WW2.CFO.Com, December 22, 2017
Martin Shkreli’s Ex-Lawyer Is Convicted of Fraud, NY Times, December 28, 2017
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Train Babcock Advisors Charged With $9M Fraud Against Charity Client, Institutional Investor Securities Blog, December 27, 2017
Ex-Illinois Mayor Accused in $5.2M Municipal Bond Fraud, Institutional Investor Securities Blog, November 30, 2017
SEC Orders 235 LLCs to Produce Documents Related to Its Woodbridge Fraud Probe, Stockbroker Fraud Blog, November 5, 2017