So why have so many rich Americans been willing to wave goodbye to the good old red, white and blue? Well, Pizzigatti says it’s all about the money; specifically,that the U.S. is cracking down on tax shenanigans overseas, like in Swiss bank accounts. Instead of taking the risk of funneling money into such schemes, some are choosing to simply renounce their citizenship, and keep their money for themselves.

You can argue about whether the Buffett Rule is fair or unfair, but there is something more than a little unseemly when it comes to somebody like Saverin. He was born in Brazil, educated in American schools, and was able to attend Harvard University. He made millions thanks to Facebook, an American company. He also became a U.S. citizen and swore to “support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic” and to bear “true faith and allegiance to the same.” Yet when it comes time to pay the piper, so to speak, he renounces his U.S. citizenship.

It costs $450 and an “exit tax” on capital gains for rich who renounce their citizenship, but some of the super-rich avoid paying even this trifling sum by not renouncing their citizenship officially. These “stateless super rich,” as the Financial Times calls them, flit from nation to nation, never staying long enough to actually pay taxes.

These ultra rich are big spenders, buying lots of property, especially in New York, where a record four apartments in Manhattan have sold for more then $30 million each this year. Many of the “stateless super rich” own properties in a variety of countries, and simply travel from season to season, whether it be to London, New York, a skiing locale, or a beach climate.

There are around 4,650 people in the world worth $500 million or more. They are worth around $6.25 trillion altogether. The ones without a country are having a great old time, and regular Americans are the ones ultimately paying for it.

So what is the solution? A start might be in enforcing the Reed Amendment, which was passed in 1996 as part of Congressional legislation. The law prevents those who renounce their U.S. citizenship for tax reasons from ever returning. It has never been enforced, though. Maybe now is the time to do so.

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Lisa Swan is a Feature Writer for the Compliance Exchange and the Wall Street Job Report. She is also a columnist for The Faster Times and a blogger forSubway Squawkers. Her work has also appeared in the New York Daily News, Yahoo Sports, Huffington Post and the books Graphical Player 2011 and Graphical Player 2010.

Burns will oversee several of the Division’s core regulatory functions, including market oversight and operations, derivatives policy and trading practices, and chief counsel and enforcement liaison functions. He also will contribute to the Division’s ongoing implementation of key provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In addition, Burns will assist with the overall management of the Division, working closely with the Division’s Director Robert Cook and other Deputy Director John Ramsay.

Read Full Article At HereIsTheCity.

Citigroup Inc. (C) was sued by Woori Bank to recover losses from the Seoul-based lender’s $95 million investment in collateralized debt obligations it claims were fraudulently sold. Woori claims Citigroup led it to invest during 2006 and 2007 in fraudulent CDOs and related products. Citigroup used misleading credit ratings to mask the fact that many of the mortgages underlying its CDOs and residential mortgage-backed securities, or RMBS, were likely to default, Woori said in its complaint filed May 15 in federal court in New York.

Read Full Article AT Bloomberg.

Ms. Williams has been a member of Chairman Schapiro’s staff since February 2011, primarily focusing on enforcement and regulatory issues. Prior to that, Ms. Williams served as assistant chief litigation counsel in the Enforcement Division’s trial unit for seven years, leading trial teams in a host of successful prosecutions. ’Erica is well-steeped in the securities laws and has a true grasp of the intricacies of the agency’, said Chairman Schapiro. ‘She also fully embraces the agency’s mission and I am thrilled that she is willing to take on this new responsibility’.

Read Full Article At HereIsTheCity.

“The recent turmoil at the SEC inspector general’s office raises questions about how well that office is functioning,” Grassley said in a statement on Wednesday. “Information from all sides is necessary to try to establish where things went wrong and what the agency can do to refocus its watchdog capacity.”

In other words, stop the distractions, and get down to business.

The complaint against Kotz alleged that sexual misconduct during his time at the SEC had hindered major investigations.

The complaints against Weber alleged that he expressed a desire to carry a concealed firearm and wear a bulletproof vest at work.

Grassley raised concerns about the involvement of outside security company, AT-RISK International, which is investigating the complaints against David Weber, saying that the company was being investigated by the SEC’s inspector general’s office at the same time that it was evaluating Weber.

David Kotz has commented that his term at the SEC was blemish free, and that he is no longer liable because he is now a private citizen.

David Weber’s attorney pointed to the chronology of events in Weber’s case, saying that the SEC’s decision to place him on leave was a form of retaliation.

And that’s it for this week on As The SEC Turns. Check back next week for more drama.

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Beth Connolly is Editor-in-Chief of the Wall Street Job Report and the Compliance Exchange. She blogs creatively at When Nutmeg Met Basil. Connect with her on LinkedIn , Twitter, and About.Me.

Federal Deposit Insurance Corp Inspector General Jon Rymer is in discussions with the U.S. Securities and Exchange Commission about temporarily leading its embattled watchdog office while the agency looks for someone to fill the job full time, according to two people familiar with the talks. The SEC has been without a full time inspector general since David Kotz left cthe post in January. The office has been embroiled in controversy in recent weeks over allegations of inappropriate conduct by employees.

Burns will oversee several of the Division’s core regulatory functions, including market oversight and operations, derivatives policy and trading practices, and chief counsel and enforcement liaison functions. He also will contribute to the Division’s ongoing implementation of key provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In addition, Burns will assist with the overall management of the Division, working closely with the Division’s Director Robert Cook and other Deputy Director John Ramsay.

Read Full Article At Reuters.

According to the Securities and Exchange Commission, Mark Spangler, an investment adviser based in Seattle who chaired Napfa in 1998,  told his clients that he was investing their money mainly in securities that were publicly traded. Instead, the SEC says, Spangler disregarded the investment goals of his clients and the strategy he told them he would use by moving their money into risky startups.

Spangler was chairman and CEO of one of the startups. It is now bankrupt.

The U.S. Attorney’s Office for the Western District of Washington Friday filed criminal charges against Spangler.

The SEC says that Spangler and his advisory firm The Spangler Group began moving the bulk of his clients’ funds around 2003 into two technology companies he cofounded. One company was in existence for 11 years and made less than $100,000 in revenue. But it received almost $42 million of the customers’ funds before it had to cease operations.

According to the SEC, Spangler failed to inform investors that the Spangler Group collected fees for “financial and operational support” from the startups, basically using the customer money to pay the fees.

Spangler only disclosed that he was diverting his customers funds when he put the Spangler Group into  state court receivership in 2011.

“Spangler assured his clients he was investing them in publicly traded equities and bonds, not risky start-ups in which he had a personal interest,” said Marc Fagel, who is director of the SEC’s San Francisco Regional Office. “For an investment advisor to put his self-interest above the best interests of his clients is a disturbing abuse of trust.”

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Jon Lewin is a Feature Writer for the Compliance Exchange and Wall Street Job Report. He is also a columnist for the Faster Times and a blogger for Subway Squawkers. Lewin’s work has appeared in the New York Daily News, Huffington Post and Digital Innovation Gazette as well as the “Cambridge Companion to Baseball” and the Daily News history essay collection “Big Town Big Time.”

James Arnold Potter recently submitted what is known as a Letter of Acceptance, Waiver and Consent to FINRA. Potter worked as for the Oak Ridge Financial Services Group from 2003 on as a compliance officer. Specifically, he was registered with FINRA as a compliance representative, Bill Singer of Forbes reports. He became the chief compliance officer of the broker-dealer in 2008.

FINRA took issue with the way Potter handled a broker who joined the firm in 2009. Because the broker had received complaints in the past regarding unauthorized actions on customer accounts, Forbes reports, the broker was placed on heightened supervision, a specific term which means that the compliance officer should closely review, among other things, the the broker’s correspondence and dealings with customers.

From May 2009 to May 2010, the AWC letter says that the broker in question engaged in trading shenanigans, including excessive trading, with four of the firm’s customers. Potter reviewed such trader reports, but did not note anything. Forbes says that the account reports had turnover rates ranging from 4.51 to 15.08, as well as cost-to-equity ratios ranging between 27% and 80%.  Potter’s notes as compliance officer showed no awareness that the customers would have to make very large returns just to make up for the commissions the broker charged.  Basically, Potter should have been watching this new broker like a hawk, but he reportedly didn’t.

In addition, according to the AWC letter, his notes did not show any concern about these issues, including the commissions or the cost-to-equity ratios. Potter also never reached out to any of the customers to ask them about what was going on, nor did he disapprove any of these trades.

In September 2009, Potter discovered that the broker in question had been the subject of another complaint, related to his position as a broker-dealer elsewhere.  Yet he still reportedly didn’t maintain the heightened supervision demanded of the situation. The AWC letter says that a tougher inquiry and even “corrective action” was needed, but that Potter did not react as he should have to these “red flags,” and that if he had, he could have prevented customers from being hurt.

The lesson learned here? If you are a compliance officer, and you have somebody at your job who receives that heightened supervision designation, you need to watch that person accordingly. Bill Singer comments that groups like FINRA “are going to scrutinize your conduct in the event things go awry….[there is] no room for error if you’re on notice that you’ve been assigned to monitor one of Wall Street’s walking wounded and you sort of ramble and amble your way through that exercise.”

Want a daily digest of articles like this one, plus the latest compliance jobs at top-tier organizations? Join 40,000 other compliance, risk governance, and regulatory professionals and subscribe to our free afternoon newsletter.

Lisa Swan is a Feature Writer for the Compliance Exchange and the Wall Street Job Report. She is also a columnist for The Faster Times and a blogger for Subway Squawkers. Her work has also appeared in the New York Daily News, Yahoo Sports, Huffington Post and the books Graphical Player 2011 and Graphical Player 2010.

At CME, An Uproar Over Trading Hours

Where Prosecutors Might Focus In Their JPMorgan Inquiries [NY Times] JPMorgan Chase’s woes continue to grow after its disclosure of losses from a failed hedging strategy in its corporate bond portfolio. The bank is already the subject of an inquiry by the Securities and Exchange Commission, and now the Federal Bureau of Investigation has opened a preliminary criminal investigation. But even though the F.B.I. is looking at the issue, it does not mean a criminal prosecution is likely. Under the F.B.I.’s investigations guide, a preliminary inquiry can be started “on the basis of any ‘allegation or information’ indicative of possible criminal activity.” That is a low threshold to open up an investigation, and there is a reasonable possibility it will not advance beyond that stage.

Securities And Exchange Commission Faces Heat From Democrats Over Settlements [Washington Post] The Securities and Exchange Commission, which polices corporations, can usually count on support from Democrats and a rougher reception from Republicans. But, on Thursday, the agency found an issue on which its traditional friends are its critics and its traditional critics are its friends. At a House hearing, Republican lawmakers defended the agency against complaints that it lets wrongdoers off the hook too easily when it routinely allows them to settle charges without admitting wrongdoing.

Regulators Probing Pre-earnings Jump In Groupon Stock: Report [Chicago Business] The 19 percent rebound in Groupon Inc.’s stock price before it released better-than-expected quarterly financial results Monday is being probed by federal regulators, the Wall Street Journal reports. The Financial Industry Regulatory Authority review is preliminary, the Journal said, citing unnamed sources. The stock snapped back from an all-time low closing price of $9.90 per share set Friday to $11.74 on Monday before Groupon’s earnings were reported after markets closed.

15 People Who May Be Called As Witnesses In The Rajat Gupta Trial [HITC] Here’s a list of folks who could be called as witnesses (by either the defence, prosecution or both) in the Rajat Gutpa insider trading trial. Gupta is charged with leaking boardroom secrets to Raj Rajaratnam, the co-founder of hedge fund Galleon Group, who is currently serving 11 years in prison for insider trading-related crimes.

BNY Mellon, IRS Spar Over $900 Million Tax Benefit [Reuters] Bank of New York Mellon Corp faced off against the U.S. government on Thursday in closing arguments over a $900 million tax benefit that the Internal Revenue Service called “tax abuse.” The case is the first to go to trial since the IRS accused some banks of generating artificial foreign tax credits through loans with London-based Barclays Plc. The tax benefit stems from a $1.5 billion loan to BNY Mellon from Barclays Plc, which also helped several other U.S. banks generate billions in foreign tax credits. Barclays has not been accused of any wrongdoing.

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The gist of the article is that dental management service companies, backed by private equity, may have taken advantage of children who qualified for Medicaid (and the Medicaid program) by giving them unnecessary dental services at their schools without parental consent. Obviously, in addition to the terror that small children suffered from unnecessary dental work, the government is upset about the money that was defrauded. Some dentists are also accused of billing Medicaid for services that were never performed.

These management companies are now “at the center of a U.S. Senate inquiry, and audits, investigations and civil actions in six states over allegations of unnecessary procedures, low-quality treatment and the unlicensed practice of dentistry,” according to Bloomberg.

One Dallas orthodontist testified that only ten percent of the Medicaid cases she reviewed actually qualified for Medicaid coverage.