Timothy S. Durham, a onetime political fundraiser and chief executive officer of National Lampoon Inc. (NLMP), told “lie after lie” to cover up a conspiracy to defraud investors at another company they controlled.
A jury of seven women and nine men, including alternates, heard opening statements today in federal court in Indianapolis. Durham and two other men were indicted last year for allegedly cheating 5,000 investors in a $200 million scheme involving interest-bearing notes issued by Akron, Ohio-based Fair Finance Co., which they controlled.
“They hid what they had done,” Henry Van Dyck of the fraud section of the U.S. Justice Department’s Criminal Division told the jury. “They did it by telling lie after lie after lie.”
Durham and co-defendant James F. Cochran, aided by co- defendant Rick Snow, made false and misleading statements about Fair Finance’s financial condition, according to prosecutors.
“Rather than using the funds that Fair raised from investors, primarily for the purpose of financing receivables,” Durham and Cochran “caused Fair to extend loans to themselves, to their associates and to businesses they owned,” according to a revised indictment issued in February.
Durham is CEO of the Indianapolis-based leveraged buyout firm Obsidian Enterprises Inc. He resigned his National Lampoon post in January. That company isn’t mentioned in the indictment. His lawyer, John L. Tompkins, said that what the government called a conspiracy was actually a series of mistakes made as a result of the financial crisis.
‘Not Crimes’
“Bad business judgments are not crimes,” Tompkins told the jury, describing an atmosphere of “panic and fear and desperation” at the company.
Cochran was Fair Finance’s chairman, while Snow served as chief financial officer. The three men have pleaded not guilty. Snow’s lawyer, Jeffrey A. Baldwin, said his client was simply doing his job in covering the company’s debts.
“He had no ownership, no partnership in anything,” Baldwin said. Cochran’s attorney didn’t give an opening statement, reserving the chance to do that before mounting a defense.
The men are charged with 10 counts of wire fraud and one count of securities fraud, all punishable by as long as 20 years in prison, and one count of conspiring to commit those crimes.
As a Republican Party fundraiser, Durham has contributed hundreds of thousands of dollars in political campaign funds, most of that to Indiana Republicans including Governor Mitch Daniels, according to state campaign finance records.
Buying Receivables
Durham and Cochran acquired Fair Finance through a holding company in 2002. Operating in Ohio since 1934, Fair Finance provided liquidity to businesses by purchasing their accounts receivable at a discount, according to the March 15 indictment.
Fair Finance raised money by selling interest-bearing certificates to investors.
By February 2005, as Fair Finance continued selling the certificates, it had shifted from providing commercial financing to making loans to its principals, their associates, Obsidian and other entities they controlled, according to the indictment.
Fair Finance closed after a November 2009 raid by the U.S. Federal Bureau of Investigation. In February 2010, its creditors forced it into involuntary bankruptcy in Akron.
The case is U.S. v. Durham, 11-cr-00042, U.S. District Court, Southern District of Indiana (Indianapolis).
To contact the reporters on this story: Andrew Harris in Chicago at aharris16@bloomberg.net; Howard Smulevitz at Indianapolis federal court at shsmulevitz@sbcglobal.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
Debt crisis: Relieved markets soar as eurozone shores up Spain's struggling banks - Daily Telegraph
Simon Denham, head of Capital Spreads, pointed out that uncertainty also remained for investors around how the Spanish deal will work.
"Equity investors are breathing a huge sigh of relief as European indices jump on the open and even higher than our original estimates however there are still lots of unanswered questions about how this particular bailout will work and then of course whether it will prove to be the right solution," he said.
"If history is anything to go by we have seen that bailing out banks doesn’t work in the short term as we only have to see the struggling share prices of our own nationalised banks."
Jeremy Batstone-Carr, chief economist at Charles Stanley, was similarly sceptical. "Stock markets have risen but we fear that investors have yet fully to embrace what the Spanish bailout might mean," he said.
"Where will the money to fund Spain’s banks come from? Certainly not the IMF and unlikely the European Stability Mechanism. The ESM does not formally exist yet and importantly, has yet to be ratified in Germany the country seen by many as Europe’s key underwriter."
Forex Flash: Today's strategy for USD/JPY – Commerzbank and Danske Bank - FXStreet.com
Finance Leads Verticals in Mobile Ad Spending - The FINANCIAL
The FINANCIAL -- To keep up with the rapid adoption of smartphones, tablets and other mobile devices, industries have been increasing their mobile budgets in dramatic fashion, and the finance vertical is leading the way.
A May report by mobile advertising network Millennial Media and comScore found that the worldwide finance industry had the largest mobile advertising budget out of all verticals on the Millennial Media platform. And continued growth in spending is almost guaranteed—comScore data showed that finance-related mobile ad budgets grew 34% between 2010 and 2011.
Advertisers said they were centering mobile finance campaigns on lead generation and registering potential customers; 70% of respondents named that as their top goal. Maintaining a market presence was a distant second at 16%. Those goals differed substantially from those of advertisers overall, which were more evenly split between focusing on lead generation/registrations and sustaining market presence, with market presence edging out lead generation.
When looking at mobile financial consumers, the study found them to have a remarkably high smartphone penetration rate of 80%. It also found them to be significantly more likely than the overall mobile audience to own a web-enabled mobile device that wasn’t a phone, such as a tablet or ereader.
Optimizing the user experience for tablets can pay dividends for financial brands looking to lead users to websites or mobile apps.
In analyzing its clickthrough data on finance-related mobile ads, Millennial Media found that 54% of secondary actions prompted by finance ads consisted of enrolling, joining or subscribing, making it the most popular post-click action. Fifty-one percent of ads prompted mobile finance consumers to follow up on a click by placing a call, while 24% asked users to download a finance-dedicated mobile app.
According to eMarketer, customers also showed an affinity for apps when asked how they preferred to access information on a mobile device. While most financial consumers still preferred to access information on a browser, a significant number were willing to use branded mobile apps instead. Customers appeared to be most likely to adopt apps when they aided them in frequent tasks, such as accessing a bank account.
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FOREX-Euro gains on relief at Spain aid deal - Reuters UK
* Gains seen limited ahead of Greek elections
* Details of bailout deal remain unclear
* China data better than feared, also helps risk assets
LONDON, June 11 (Reuters) - The euro rose on Monday after Spain secured aid for its banks, allaying some of the concerns about the country's debt problems, but the currency's gains were seen limited as investors were cautious ahead of elections in Greece at the weekend.
The euro zone agreed to lend its fourth-largest economy up to 100 billion euros to reassure investors and prevent a run on banks.
But traders and analysts said the details of the bailout deal were still unclear and that concerns would remain about Spain's large debt burden given the country's economy remains stagnant.
The euro rose more than 1 percent to hit a three-week high of $1.2672 in Asian trade, pulling away from a near two-year low of $1.2288 hit earlier this month.
However, it ran into selling in the European session and was last up 0.7 percent at $1.2611.
"It is positive that politicians have reacted so quickly and ahead of the Greek elections, and this will hopefully contain the risks within the Spanish banking sector," said Niels Christensen, currency strategist at Nordea in Copenhagen. "But it is not going to boost the Spanish economy so there is still a mountain to climb to control the debt situation.
"The euro will continue to be vulnerable ... poor economic data and low growth or recession is the worst scenario for dealing with a debt crisis".
Technical analysts said further gains could see the euro rise towards $1.2837, its 50 percent retracement of its decline from March peak of $1.3386 to June 1's two-year low. However, many traders were sceptical and said it was unlikely to rise beyond $1.2750.
Against the yen, the single currency rose to 100.90 yen , its highest level in more than two weeks, before retracing to trade up 0.8 percent at 100.25 yen.
"Euro zone leaders rose to the occasion. They had no choice. The Spanish bailout means Europe will not permit 'runs' to sink their banking system," said David Kotok, chairman of Cumberland Advisors.
Better-than-expected data out of China over the weekend also boosted riskier assets, helping the euro.
The data was not as bearish as many traders had feared following Beijing's first interest rate cut since the global financial crisis on Thursday.
GREEK ELECTIONS
Traders warned optimism would be temporary given caution before Greek elections on June 17, where the result could intensify worries about whether Greece could leave the euro. Parties that support and oppose the debt-stricken country's international bailout are neck-and-neck in opinion polls.
With the terms of the Spanish deal still not clear, there were also worries that other countries which have received a bailout -- Greece, Portugal and Ireland -- may protest that Spain was offered better terms than they were.
"If the euro zone will have much looser conditions for Spain, then countries like Ireland will probably call for the same conditions as well. It's not going to be easy to decide on those details," said Seiya Nakajima, chief economist at Itochu Corp in Tokyo.
Underscoring the prevailing bearish sentiment, bets against the euro surged to a record high in the week to June 5, while net long U.S. dollar positions extended gains, according to the Commodity Futures Trading Commission.
"I don't think people will take off short euro bets ahead of the weekend and the Greek elections," Nordea's Christensen said.
The higher-yielding and riskier Australian dollar was up 0.6 percent against the U.S. dollar at $0.9968.
The dollar index was down 0.6 percent at 82.022 but above an earlier 2-1/2-week-low of 81.785. (Additional reporting by Antoni Slodkowski in Tokyo; Editing by Toby Chopra)
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