Gambling Subpoenas on Wall St.

[vinism]

Cross-posted this from the NETeller thread because this seems like it should be open to a broader discussion....

The Justice Department has issued subpoenas to at least four Wall Street investment banks as part of a widening investigation into the multibillion-dollar online gambling industry, according to people briefed on the investigation.


The subpoenas were issued to firms that had underwritten the initial public offerings of some of the most popular online gambling sites that operate abroad. The banks involved in the inquiry include HSBC, Credit Suisse, Deutsche Bank and Dresdner Kleinwort, these people said.

While online gaming sites like PartyGaming and 888 Holdings operate from Gibraltar and their initial public offerings were held on the London Stock Exchange, companies that do business with them and have large bases in United States have come under scrutiny by regulators in Washington.

None of the biggest United States banks like Goldman Sachs or Citigroup underwrote the initial public offerings in London, in part because of the legal ambiguity of the sites; they are illegal in the United States, but still accessible to residents.

The subpoenas, earlier reported by The Sunday Times of London, appeared to be part of an indirect but aggressive and far-reaching attack by federal prosecutors on the Internet gambling industry just two weeks before one of its biggest days of the year, the Super Bowl.

http://www.nytimes.com/2007/01/22/business/22gaming.html?ei=5094&en=6a7177385bf27904&hp=&ex=1 169442000&partner=homepage&pagewanted=print <!-- / message --><!-- controls -->

[vinism]

Continuing with the cross-posting:

Here's what the Sunday Times of London is reporting on the situation:

Senior bankers and leading politicians have attacked demands from the American Department of Justice for British bankers to hand over details of their dealings with online gambling companies outlawed in the US. After calls on the British Government to spell out the limits of the US authorities’ reach, the Treasury said last night that it was monitoring the situation.

Subpoenas have been issued by the Southern District Court of New York to at least 16 banks, including HSBC, Dresdner Kleinwort, Credit Suisse and Deutsche Bank. The official demands for e-mails, telephone records and other documents form part of a controversial push by the Department of Justice (DoJ) to build cases against individuals and companies who profited from online gaming in the US.

http://business.timesonline.co.uk/ar...559839,00.html