Executive Pleads Guilty to Insider Trading

   NEW YORK – 6/27/2017 - Tai Nguyen, 49, pleaded guilty on June 26 in Manhattan federal court to one count of conspiracy to commit securities fraud and wire fraud in connection with an insider trading scheme in which Nguyen, the president of Insight Research LLC, an investment research firm, and a paid consultant of an expert networking firm, provided material, nonpublic information to members of the investment community, announced U.S. Attorney for the Southern District of New York Preet Bharara and Assistant Director-in-Charge of the New York Field Office of the FBI Janice K. Fedarcyk. The information concerned quarterly financial results for Abaxis Inc., a California biotechnology company. Nguyen secured the information from a family member employed in Abaxis’s Finance Department (the “Abaxis Insider”).
    U.S. Attorney Bharara said, “Tai Nguyen was a consultant who, for a handsome fee, provided his clients with confidential and proprietary inside information in violation of the law. He also illegally traded on that information himself, earning a quick and easy profit, and exploiting the information for all it was worth. Today’s plea adds another to our nationwide roll call of those who choose to corrupt our markets. We will continue to go after individuals who flout the securities laws and see to it that they are prosecuted and punished.”
    FBI Assistant Director-in-Charge Fedarcyk said, “Mr. Nguyen regularly provided material, non-public information to his clients before quarterly announcements in return for momentary financial gain. Providing and receiving inside tips not only damages the integrity and confidence of our markets, but violates the law. Securities fraud has been, and will continue to be, a major priority for this office until people throughout the hedge-fund industry and Wall Street understand that gaining an unfair advantage – like knowing the answers before the test – is cheating.”
    According to the information and statements made during the guilty plea proceeding:
    From 2006 through mid-2009, Nguyen obtained detailed information from the Abaxis Insider about the company’s anticipated revenues, earnings, gross margins and other financial results prior to the company’s quarterly announcement. After obtaining the Abaxis inside information, Nguyen provided it, on multiple occasions, to Noah Freeman, a research analyst at a hedge fund based in Boston and to Samir Barai, a portfolio manager at two separate hedge funds in New York, N.Y.
   Freeman’s hedge fund earned more than $4.5 million between July 2006 and May 2009, while Barai’s hedge fund earned over $1.7 million between July 2008 and September 2009, as a result of Abaxis stock trading based on tips from Nguyen, including the Abaxis inside information. In exchange for the Abaxis inside information, Freeman’s and Barai’s hedge funds paid Insight Research and/or Nguyen consulting fees of several thousand dollars per month. At various times, Insight Research earned consulting fees of more than $15,000 a month from just one of these hedge fund clients.
   In addition to passing the Abaxis inside information, on numerous occasions between 2006 and 2009, Nguyen used the information to trade Abaxis stock in his personal brokerage account. As a result of his own trading activity, Nguyen earned over $147,000 during that time period.
   Nguyen, of Oregon City, Ore., pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud. This charge carries a maximum sentence of five years in prison and a maximum fine of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to persons other than the defendant resulting from the offense. As part of his plea agreement, Nguyen agreed to forfeit the proceeds of the offense.
    U.S. Attorney Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission.
    This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group.
   This case is being handled by the U.S. Attorney’s Office for the Southern District of New York’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney David I. Miller is in charge of the prosecution.
   Source: Financial Fraud Enforcement Task Force

Homebuilder to Pay Civic Penalty of $741,000

   WASHINGTON –  6/20/2012 - The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced that Toll Brothers Inc., one of the nation’s largest homebuilders, will pay a civil penalty of $741,000 to resolve alleged Clean Water Act violations at its construction sites, including sites located in the Chesapeake Bay Watershed. Toll Brothers will also invest in a company-wide stormwater compliance program to improve employee training and increase management oversight at all current and future residential construction sites across the nation. The company is required to inspect its current and future construction sites routinely to minimize stormwater runoff from sites. Polluted stormwater runoff and sediment from construction sites can flow directly into the nearest waterway, affecting drinking water quality and damaging valuable aquatic habitats.
   “Keeping contaminated stormwater runoff out of the nation’s waterways, like the Chesapeake Bay, is one of EPA’s top priorities,” Assistant Administrator for EPA’s Office of Enforcement and Compliance and Assurance Cynthia Giles said. “Today’s settlement will improve oversight of stormwater runoff at construction sites across the country and protect America’s waters.”
   “This settlement will help protect the nation’s waters from the harmful pollutants contained in stormwater runoff from construction sites,” said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice. “The settlement requires Toll Brothers to implement system-wide management controls and training that will help prevent polluted stormwater runoff from contaminating rivers, lakes and sources of drinking water.”
   EPA estimates the settlement will prevent millions of pounds of sediment from entering U.S. waterways every year, including sediment that would otherwise enter the Chesapeake Bay, North America’s largest and most biologically diverse estuary. The bay and its tidal tributaries are threatened by pollution from a variety of sources and are overburdened with nitrogen, phosphorus and sediment that can be carried by stormwater.
   The complaint, filed simultaneously with the settlement agreement, alleges over 600 stormwater violations that were discovered through site inspections and by reviewing documentation submitted by Toll Brothers. The majority of the alleged violations involve Toll Brothers’ repeated failures to comply with permit requirements at its construction sites, including requirements to install and maintain adequate stormwater pollution controls.
   The Clean Water Act requires permits for the discharge of stormwater runoff. In general, Toll Brothers’ permits require that construction sites have controls in place to prevent pollution from being discharged with stormwater into nearby waterways. These controls include common-sense safeguards such as silt fences, phased site grading and sediment basins to prevent construction contaminants from entering the nation’s waterways.
   The settlement requires Toll Brothers to obtain all required permits, develop site-specific pollution prevention plans for each construction site, conduct additional site inspections beyond those required by stormwater regulations, and document and promptly correct any problems. The company must properly train construction managers and contractors on stormwater requirements and designate trained staff for each site. Toll Brothers must also submit national compliance summary reports to EPA based on management oversight inspections and reviews.
   This settlement is the latest in a series of enforcement actions to address stormwater violations from residential construction sites around the country. Construction projects have a high potential for environmental harm because they disturb large areas of land and significantly increase the potential for erosion, and stormwater runoff from sites can pick up other pollutants, including concrete washout, paint, used oil, solvents and trash.
   The state of Maryland and the commonwealth of Virginia have joined the settlement and will receive a portion of the $741,000 penalty. The settlement includes Toll Brothers sites in Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Nevada, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and West Virginia.
   The consent decree, lodged in the U.S. District Court for the Eastern District of Pennsylvania, is subject to a 30-day public comment period and approval by the federal court.
   More information about this settlement: http://www.epa.gov/compliance/resources/cases/civil/cwa/tollbrothers.html
   More information about EPA’s stormwater enforcement:http://www.epa.gov/oecaerth/data/planning/priorities/cwastorm.html

CT Scans Linked to Leukemia, Brain Cancer

   (NIH) - 6/12/2012 - Children and young adults scanned multiple times by computed tomography (CT), a commonly used diagnostic tool, have a small increased risk of leukemia and brain tumors in the decade following their first scan. These findings are from a study of more than 175,000 children and young adults that was led by researchers at the National Cancer Institute (NCI), part of the National Institutes of Health, and at the Institute of Health and Society, Newcastle University, England.
   The researchers emphasize that when a child suffers a major head injury or develops a life-threatening illness, the benefits of clinically appropriate CT scans should outweigh future cancer risks. The results of the study were published online in The Lancet on June 7.
   "This cohort study provides the first direct evidence of a link between exposure to radiation from CT and cancer risk in children," said senior investigator Amy Berrington de Gonz├ílez, Ph.D., Division of Cancer Epidemiology and Genetics, NCI. "Ours is the first population-based study to capture data on every CT scan to an individual during childhood or young adulthood and then measure the subsequent cancer risk."
   Despite the elevation in cancer risk, these two malignancies are relatively rare and the actual number of additional cases caused by radiation exposure from CT scans is small. The most recent (2009) U.S. annual cancer incidence rates for children from birth through age 21 for leukemia and brain and other nervous system cancers are 4.3 per 100,000 and 2.9 per 100,000, respectively. The investigators estimate that for every 10,000 head CT scans performed on children 10 years of age or younger, one case of leukemia and one brain tumor would occur in the decade following the first CT beyond what would have been expected had no CT scans been performed.
   CT scans deliver a dose of ionizing radiation to the body part being scanned and to nearby tissues. Even at relatively low doses, ionizing radiation can break the chemical bonds in DNA, causing damage to genes that may increase a person’s risk of developing cancer. Children typically face a higher risk of cancer from ionizing radiation exposure than do adults exposed to similar doses.
   The investigators obtained CT examination records from radiology departments in hospitals across Britain and linked them to data on cancer diagnoses and deaths. The study included people who underwent CT scans at British National Health Service hospitals from birth to 22 years of age between 1985 and 2002. Information on cancer incidence and mortality from 1985 through 2008 was obtained from the National Health Service Central Registry, a national database of cancer registrations, deaths and emigrations.
   Approximately sixty percent of the CT scans were of the head, with similar proportions in males and females. The investigators estimated cumulative doses from the CT scans received by each patient, and assessed the subsequent cancer risk for an average of 10 years after the first CT. The researchers found a clear relationship between the increase in cancer risk and increasing cumulative dose of radiation. A three-fold increase in the risk of brain tumors appeared following a cumulative absorbed dose to the head of 50 to 60 milligray (abbreviated mGy, which is a unit of estimated absorbed dose of ionizing radiation). Similarly, a three-fold increase in the risk of leukemia appeared after the same dose to bone marrow (the part of the body responsible for generating blood cells). The comparison group consisted of individuals who had cumulative doses of less than 5 mGy to the relevant regions of the body.
  The absorbed dose from a CT scan depends on factors including age at exposure, sex, examination type, and year of scan. Broadly speaking, two or three CT scans of the head using current scanner settings would be required to yield a dose of 50 to 60 mGy to the brain. The same dose to bone marrow would be produced by five to 10 head CT scans, using current scanner settings for children under age 15.
   In countries like the United States and Britain, the use of CT scans in children and adults has increased rapidly since their introduction 30 years ago. Due to efforts by medical societies, government regulators, and CT manufacturers, scans performed on young children in 2012 can have 50 percent lower radiation doses, compared to scans carried out in the 1980s and 1990s, say the investigators. However, the amount of radiation delivered during a single CT scan can still vary greatly and is often up to 10 times higher than that delivered in a conventional X-ray procedure.
   The lead author of the study was Mark S. Pearce, Ph.D., Institute of Health and Society, Newcastle University. “CT can be highly beneficial for early diagnosis, for clinical decision-making, and for saving lives. However, greater efforts should be made to ensure clinical justification and to keep doses as low as reasonably achievable,” Pearce said.

Companies to Pay Millions for Pipeline Spills

   Kansas City, Kan. - (EPA) - 6/8/2012 - Mid-America Pipeline Company, LLC (MAPCO), and Enterprise Products Operating LLC (Enterprise), of Houston, Texas, have agreed to pay a civil penalty of more than $1 million to the United States to settle violations of the federal Clean Water Act related to three natural gasoline pipeline spills in Iowa, Kansas and Nebraska.
    As part of a consent decree lodged on May 29 in U.S. District Court in Omaha, Neb., and in addition to paying the $1,042,000 civil penalty, the companies have agreed to undertake various measures aimed at reducing external threats to their pipeline, enhance their reporting of spills, and spend at least $200,000 to identify and prevent external threats to the pipeline involved in the spills.
    MAPCO owns and Enterprise operates the 2,769-mile West Red Pipeline, which transports mixed natural gasoline products between Conway, Kan., and Pine Bend, Minn. The settlement resolves Clean Water Act violations related to three spills that occurred along the pipeline:
    A March 29, 2007, rupture near Yutan, Neb., which caused the discharge of approximately 1,669 barrels of natural gasoline directly into an unnamed ditch and Otoe Creek.
   An April 23, 2010, rupture near Niles, Kan., which caused the discharge of approximately 1,760 barrels of natural gasoline directly into an unnamed ditch, Cole Creek, Buckeye Creek and the Solomon River.
An August 13, 2011, rupture near Onawa, Iowa, which caused the discharge of approximately 818 barrels of natural gasoline directly into the Missouri River. “More than 20,000 miles of pipeline, carrying oil and petroleum products, cross the states of Iowa, Kansas, Missouri and Nebraska in EPA’s Region 7,” EPA Regional Administrator Karl Brooks said. “A frequent cause of pipeline breaks is the action of third parties during farming and excavation. This settlement requires the defendants to honor a schedule of pipeline inspections on the ground and from the air, and reach out to local agencies, contractors and excavators to make sure they are more fully aware of pipeline locations and depths.”
    “This settlement requires proactive vigilance to ensure that our soil and waterways are protected from contaminants,” said Deborah R. Gilg, U.S. Attorney for the District of Nebraska. “The agreement will result in safer pipeline operations and that will be good for Nebraska’s environment.”
    In addition to the proactive inspections and outreach efforts, the settlement also requires MAPCO and Enterprise to spend $200,000 to relocate, cover, lower or replace pipeline segments; install new remote shutoff valves; install new physical protections such as fences or concrete barriers; and install other new equipment, structures or systems to prevent spills from reaching navigable waters.
    The consent decree is subject to a 30-day public comment period and court approval.

The Arms Debate

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