Another major strike against organized crime in the securities markets came on March 3, 2000 when the U.S. Attorney for the Eastern District of New York indicted 19 people, including six with alleged ties to organized crime. The indictment alleged that a broker-dealer, White Rock Partners (later renamed State Street Capital Markets), working with brokers at several notorious boiler rooms, including J.W. Barclay & Co., A.R. Baron & Co., and D.H. Blair, engaged in microcap "pump and dump" manipulations. The indictment also alleged that the defendants most frequently relied on fraudulent Regulation S offerings to obtain their inventory of stock to manipulate.
This url no longer works. Here is an excerpt from the transcript:
Remarks by Benoï¿½t Bouchard, Chairman Transportation Safety Board of Canada
MAXIMIZING THE BENEFITS OF RECORDED DATA
We are all here in Washington this week to review the state of knowledge with data recorders and to consider how we might better exploit data from on-board recordings the future. I am here partly because I share a belief in the importance of flight recorders with my friend and colleague- Chairman Jim Hall of the NTSB. I am also here because both Jim Hall and I are members of the International Transportation Safety Association, the body co-sponsoring this symposium with the NTSB.
Before I touch on the specifics of recorders I believe it is important to look first at where transportation accident investigation appears to be headed.
First: What should be the object of any transport accident or incident investigation? There is little doubt that in the minds of all, or at least most, of the people in this room that it must be accident prevention. ICAO Annex 13 states, when referring to the investigation of aviation accidents and incidents: "It is not the purpose of this activity to apportion blame or liability." Most of us have these or similar words in our national legislation, at least for aviation accident investigation.
I mention this now because the interests of the legal and regulatory communities must be recognized in determining how we investigate with the object of preventing accidents. There is, therefore, good reason for us to go beyond simply stating the objective of "preventing accidents" and consider the means of achieving that objective. To fail to do so invites others to employ means that conflict with the non-blaming safety analysis that has served aviation for so many years and more recently has served all modes of transport.
Those of us in the government sponsored part of the accident investigation community and the operational people in the industry tend to look at transport accident investigation as being unrelated to disciplinary action, blame, and liability. You will find many in the general public and some in regulatory organizations, who believe that if those at fault are caught and punished, that will make a major contribution to accident prevention. They are saying 'be careful because it can cost you money, your job, your reputation and possibly your freedom.' Can we say that they are entirely wrong?
More appropriately, can we say that punitive activities are likely to conflict with the efficient gathering of all relevant information necessary to the analysis of aircraft accidents and incidents? I think so.
Two recent accidents come to mind. We saw the intense interest of the FBI in the TWA 800 accident. In the SwissAir 111 accident near Peggy's Cove there has been, in Switzerland, an allegation of "manslaughter through negligence". An investigating judge has been assigned in Switzerland and the Canadian Department of Justice has been asked to obtain our files. While we like to cooperate, we will resist the use of our information for the purposes of prosecutions with extreme vigour. For the crews and the companies involved, this interest in criminal charges must be alarming. From the perspective of the accident investigation agency it is very worrisome.
The effect of bringing criminal charges against crews and companies can be very detrimental to the investigation and to safety. If crews and companies are fearful about speaking freely to investigators, the investigators must necessarily take longer and may not even succeed in identifying safety problems. So, what is required in the coming months?
The accident investigation authorities need to explain clearly the ground rules and the protections for information that are in place. The accident investigation organizations will need understanding and support from the industry to defend the protections that exist for important safety reasons. The investigation authorities must explain that some information that is wanted by the industry will not be available if we are to protect the principles that support getting complete safety information to the investigator by the quickest means available.
These quickest means are critical so that the investigator can make findings about safety problems and make them known, so that safety deficiencies can be eliminated as quickly as possible.
When there is a safety failure within the good and effective transport system that is overseen by the regulatory agencies, the accident investigators enter the picture to analyse the accident or incident. The part of the transportation system that is managed by regulators includes, among other things, the assessment of penalties to encourage operators back on the path to safety. Can we say that is entirely or even substantially wrong? Manufacturers use investigation information to verify the performance of their aircraft and to analyse performance anomalies. That's certainly in support of safety.
The TSB has made some assertions about the transportation industry and I suspect they are not far from what other accident investigation agencies have said or might say. Those assertions, or inferences, underlie the way that the Board operates.
The Board believes that almost everyone in the transportation community is objective and forthright. It presumes that people who work in the transportation community are generally competent, they like their work and they try to 'get things right'. That when there is a safety failure, it is likely because there was an absence of knowledge or training or understanding. Those inferences are reflected in the legislation and practices of the TSB.
In our work we have found much to validate their soundness.
When this is combined with the separation of accident investigation from the liability and discipline functions, it provides strong incentives to be forthcoming about safety problems. The presumption that the crews tried to get things right is behind us having human performance specialists trying, among other things, to determine whether the circumstances of the accident were beyond the limits of expected human behaviour.
I will now turn to those uses of accident investigation information that are for purposes other than the reduction of accidents or the advancement of transportation safety. Lawyers will use investigation information for the purposes of pressing, and defending against, civil claims. Media organizations will use accident investigation information as part of the news that sells their products. All those uses are legitimate but they are often in conflict with conducting the quickest possible investigation to identify safety problems and get them out of the system.
What does this all tell us about where aircraft accident investigation is headed? First, it tells us that safety investigators do not have an exclusive right to accident investigation information.
Often the accident investigators have the only information about many aspects of the circumstances of an accident and its analysis. Others claim access to that information for their own purposes - purposes that often conflict with efficient accident investigation and the earliest identification of safety deficiencies. It tells us that the others in competition for the information will press their point of view.
[B]It tells us that we must put forth our own point of view clearly and with sound reasons. It tells us that we should do everything possible to separate our gathering of information from accidents and incidents for non- regulatory safety purposes from the activities of others who gather information for their own purposes which often conflict with safety.[B] It tells us that we must explain the regime that includes incentives to provide information to accident investigators quickly and freely.
It tells us that in spite of our best efforts, that some information is so important to others that they will find means of obtaining it regardless of the law. (Swissair 111 some CVR excerpts leaked to US media and later picked up in Canada.)
The level of public attachment to aircraft accident stories has soared since the beginnings of CNN and the subsequent all news TV channels and radio stations.
The media interest in TWA 800 and SwissAir 111 represents a new reality. It is dragging along interest in smaller accidents and my belief is that media interest in aviation accidents will continue to grow. The present level of media interest puts great pressures on investigators. It puts pressure on the carriers, on the pilot's associations and on the regulators. We must accommodate and manage the change within this new reality.
We must manage our investigations in a way that respects the present state of society without compromising our ability to investigate as quickly and effectively as present day technology permits. I should add that this intense public interest is not all bad for the investigative process.
The intense interest almost guarantees the availability of adequate funding for large investigations and almost guarantees action to deal with the safety deficiencies identified in the investigation.
Aircraft are becoming ever more complex. Crews know and understand a smaller and smaller proportion of the aircraft systems and how they operate. Sophisticated training schemes for pilots and maintenance staff have been designed by manufacturers, largely on the basis of the need to know. More and more of the aircraft is being operated by software that may contain deficiencies that can remain hidden for years. The pilot's knowledge of all the systems is becoming less than it was and this is threatening his ability to reason his way out of problems. On the happy side, the reliability of the components and systems is increasing at a very satisfying rate.
What does this tell us of the future of accident investigation? Certainly, that we can get much quicker analysis of many of the failures because the electronic theory that permitted the development of the complex systems can be used to analyse their failures very quickly - provided that we can preserve the data. It tells us that we need ever more highly educated and qualified investigators.
It tells us that the independent investigation agencies will need more and more outside help. Some of the help will come from sister agencies, some will come from independent experts, some from cooperative associations such as ITSA, and some will necessarily come from manufacturers and operators. This will bring with it the necessity of learning how to manage the conflicts of interest that are inevitable in these sorts of relationships. It also tells us that in those accidents where we lose the electronically stored data we will face an almost impossible task.
The demands of the legal community and the size of the claims tell us that the work of the investigators will be challenged as never before.
That means that the investigation methodology will have to become more rigorous and align its self more clearly with the principles of scientific inquiry. It means that the management of the investigations has become a sophisticated task. In the early stages of the SwissAir 111 accident there were about 5,000 people whose work was being coordinated and directed by the investigator-in- charge.
Now I would like to say a few words about the applicability of the aircraft's 'Black Box' to other modes of transport ...This message has been edited. Last edited by: BF,
Wed June 25 2003, 04:19 PM
Newest information on DH Blair, underwriter for the IFT IPO (entertainment system).
SEC BARS SIX FORMER D.H. BLAIR BROKERS FROM THE SECURITIES INDUSTRY
On May 5, the Commission issued an order barring six former stockbrokers at now-defunct broker-dealer D.H. Blair & Co., from associating with any broker or dealer. The six individuals - Robin Breitner, John DiBella, Raymond Hernandez, Richard Molinsky, Richard Smith and Richard Gaydos - consented to the issuance of the order, which was based on criminal convictions obtained by the Manhattan District Attorney's Office after an investigation by that office and the Commission staff. Each of the six brokers pleaded guilty to and was convicted of at least one count of violating the Martin Act - the New York state general business law - for market manipulation and fraudulent sales practices. People of New York v. D.H. Blair, et al., Ind. No. 3282/00.
In connection with their pleas, the six brokers were sentenced to probation and five of them paid a total of $1,987,500 in restitution to defrauded investors. Specifically, Breitner paid $175,000, DiBella paid $40,000, Gaydos paid $97,500, Molinsky paid $1,500,000, and Smith paid $175,000. In addition, each of the six brokers was required to perform between 1,200 and 1,500 hours of community service.
Last December, in separate administrative proceedings, the Commission revoked D.H. Blair & Co.'s broker-dealer registration and barred four former D.H. Blair officers -Kenton Wood, Alan Stahler, Kalman Renov and Vito Capotorto - from associating with any broker or dealer. See Rels. 34-47070, 34-47071, 34-47072, 34-47074, and 34-47073. (Rel. 34-47797; File No. 3-11105)
NASD Dispute Resolution has developed this Web Page to provide information about the D.H. Blair restitution process to former customers of D.H. Blair and other interested persons. Summary information about the D.H. Blair case and the restitution process to be administered by NASD is listed below.
NASD begins Administration of New York County DA /D.H. Blair Fund
NASD Dispute Resolution announced today that it has mailed claim forms to over 13,000 former D. H. Blair customers who are eligible to participate in the $21 million restitution fund (The "Fund") created by the New York County District Attorney's Office. NASD Dispute Resolution will administer the Fund.
The Fund was established when D.H. Blair & Co., Inc., and four of its top managers, pled guilty to felony charges in a prosecution by the New York County District Attorney's Office. (People v. D.H. Blair & Co., Inc., et al., Indictment No. 3282/2000, New York State Supreme Court Part 75). The plea agreement between the District Attorney's Office and the five defendants, approved by Justice Bernard Fried of the New York State Supreme Court, required these defendants, over a two-year period, to pay $21 million to be used for restitution to victims of the criminal practices at the Blair brokerage.
Customers eligible to participate in the Fund are those who, according to account records, held one or more of the 10 securities listed below in their accounts, and suffered a net loss in those securities:
Advanced Aerodynamics & Structures Interactive Flight Technologies Amerigon Premier Laser Systems Conversion Technologies International Sepragen Digital Video Systems Telepad Food Court Entertainment Network Titan Pharmaceuticals
Susan Kushner Resnick: Rich send poor miners on death march
01:00 AM EST on Sunday, January 8, 2006
WHEN NEWSCASTERS were trying to fill time while covering the West Virginia mine disaster last week, they asked mining experts questions like this: Why, in this age of technological breakthroughs, are men still crawling into mines to dig out coal by hand? Isn't there anything better?
The experts blabbed answers about how technologically advanced mining tools and rescue equipment have become. But they didn't admit that no matter how high tech the tools get, the best and cheapest way to remove coal from the earth is to use human beings. And I mean "use" in the most pejorative sense.
I am not a miner or the relative of one. But for the past five months, I've been working on a book about a mine disaster that unraveled almost exactly like this one, minus the cruel twist of teasing families with false good news at the end. My disaster, as I've come to think if it, happened on the other side of the country in 1943.
The owners of the Smith Mine in Bearcreek, Mont., had been cited for numerous safety violations three months before the disaster, among them too much methane gas, poor ventilation and a lack of safety equipment. Management claimed to have fixed or been working on fixing most of the problems, though that turned out to be an exaggeration.
The Montana coal miners, just like their brothers in West Virginia, knew that the mine was unsafe. Still, they went to work every day because what choice do you have when your kids need milk and snow boots?
If you watched last week's coverage, you pretty much know what happened 66 years ago in Montana. There was an explosion, though no one ever determined exactly what blew. Poison gas filled the air. Three men who were working near the mouth of the mine escaped. The other 74 died within 90 minutes.
As I've researched what happened at the Smith mine, I've fallen in love with my miners. There was the father of three who practiced his trumpet every day after coming off his shift; the grandfather who came out of retirement on the ranch because so many of the younger men were away at war; the bachelor who still had beers with his buddies after he'd washed the coal dust from his cheeks.
Some of them were rough and some sweet, some intellectuals and some gamblers. But as I get to know them posthumously, I want to embrace each one and pull him into the fresh air.
I suspect that the owners of the International Coal Group, which owns the Sago mine, don't feel quite as protective of their miners. If they did, they wouldn't let them go underground when every day is a potential death march. They wouldn't let paying an allegedly decent wage be enough. They would also put some of their bucks into keeping the men who line their pockets safe.
But that would require closing the mine long enough to fix the problems, which would cost money. Instead, the miners pay with their lives every once in a while and the owners and lawmakers promise not to let it happen again.
Then nothing really changes. This is an old story, certainly older than 1943. The rich have used the poor to get richer from the time industry began. It's what sets worker against boss, what spawns labor unions, what makes us sneer at the clean-shaven men who say they're sorry after it's too late.
Wouldn't it be something if the real miracle of the West Virginia mine disaster is that this is the last time they have to do that?
Susan Kushner Resnick is a Journal satff writer reporter who is writing a book about the Smith Mine disaster.
This mine was owned by Wilber Ross, bankruptcy specialist, aggressive investor, billionaire.
Ross is a relatively new owner of Sego mine, which is now under scrutiny for long list of safety violations. Wilber Ross serves on the Board of Directors of News Communications Inc, Morty Davis' (of D.H. Blair), publishing company.
(Bloomberg) -- Federal authorities issued 21 citations last year for a build-up of combustible materials at the West Virginia mine where 12 men died, according to U.S. Labor Department statistics.
The Sago mine, owned by billionaire investor Wilbur Ross's International Coal Group Inc., was cited for a total of 208 federal safety violations last year, up from 68 in 2004, according to the Labor Department. The largest individual fine last year was $440; the citations for combustible materials carried fines of $60.
When asked about the facility's safety record at a news conference yesterday, Ben Hatfield, International Coal's chief executive officer, said the Ashland, Kentucky-based company has improved safety conditions since acquiring the mine last year.
Sun January 08 2006, 11:20 PM
Btw, the link for more information on DH Blair on a previous post doesn't seem to work. This will: