"Who Knew What When" is the focus of the legal mechanism now in full swing as investigators at the SEC and other federal regulators begin their forensic examinations and interviews. Eliot Spitzer is finally a back story after his demise in the FINCEN money laundering investigation:Angry Bear Stearns Co Inc shareholders have wasted no time in bringing legal claims following the company's stunning stock collapse and $2-a-share fire sale to JPMorgan Chase & Co.
At least one federal lawsuit in New York seeking class- action status for alleged securities fraud was filed on Monday by an investor contending the company hid its true financial condition from shareholders.
But what really snared Spitzer was a money laundering investigation that was flagged by suspicious activity reports (SARs) that banks have to file with the Treasury to surface everything from money laundering to terrorist activity. This network has been around for a while, but its importance escalated following the Sept. 11, 2001 terrorist attacks. According to the FBI’s charges the prostitution ring that counted Spitzer as a customer was investigated due to some shady bank accounts, checks and wire transfers with big totals ($39,000, $400,000 and others).
Even today at 2AM JP Morgan Chase was searching Google with the terms "information operations risk management" and landed here on this Operational Risk Management Blog. Then they "Out Clicked" to A Defensible Standard of Care in hopes of finding answers to their questions.
The law suits and the lawyers are busy these days with the Federal Rules of Civil Procedure (FRCP) as they defend ongoing data breaches and bad behavior by employees and interested 3rd parties:
A security breach at an East Coast supermarket chain exposed 4.2 million credit and debit card numbers and led to 1,800 cases of fraud, the Hannaford Bros. grocery chain announced Monday.
Hannaford said credit and debit card numbers were stolen during the card authorization process and about 4.2 million unique account numbers were exposed.
The breach affected all of its 165 stores in the Northeast, 106 Sweetbay stores in Florida and a smaller number of independent groceries that sell Hannaford products.
The company is aware of about 1,800 cases of fraud reported so far relating to the breach.
If the latest economic studies are correct, that's going to cost about $98.00 per record on the low side when it comes to the amount of money that these organizations will spend (unless insured) to clean up this operational risk related incident.
New York State has a new Governor at the same time the Bears are descending on Wall Street:
This month it's New York in the news but our prediction is that California will soon be next to capture the nations headlines. The legal buzzards are soaring overhead...