The SEC charged bond traders with running a bunch of fake trades to get commissions and rob the Venezuelan people. The take was, as usual, shared with the revolutionary people’s power executives charged with protecting the pueblo, and as usual, the officials in charge will be protected. (Thanks to commenter Jau for pointing this out.)
Anyway it’s an interesting read. It starts:
Washington, D.C., May 6, 2013 — The Securities and Exchange Commission today charged four individuals with ties to a New York City brokerage firm in a scheme involving millions of dollars in illicit bribes paid to a high-ranking Venezuelan finance official to secure the bond trading business of a state-owned Venezuelan bank.
According to the SEC’s complaint filed in federal court in Manhattan, the global markets group at broker-dealer Direct Access Partners (DAP) executed fixed income trades for customers in foreign sovereign debt. DAP Global generated more than $66 million in revenue for DAP from transaction fees – in the form of markups and markdowns – on riskless principal trade executions in Venezuelan sovereign or state-sponsored bonds for Banco de Desarrollo Económico y Social de Venezuela (BANDES). A portion of this revenue was illicitly paid to BANDES Vice President of Finance, María de los Ángeles González de Hernandez, who authorized the fraudulent trades.
The annoying thing about the situation is that the SEC calls this a “massive kickback scheme.” They are talking about a country where quite likely billions of dollars a year are taken in kickback schemes. Sadly, $60 million is a drop in the Venezuelan bucket.
And since nobody else seems to have mentioned it in English, yes, that’s the same BANDES that employed Alejandro Andrade as president during this same period. (H/T Corina.) Unreliable, unsourced reports said Andrade is “behind” the recent purchase of Globovisión, Venezuela’s most politically conservative television station, but I don’t have any evidence that this is so.