%1

Bain Capital LLC and Apollo Global Management LLC are among private-equity firms subpoenaed by New York's attorney general in an investigation into whether they are depriving the state of tax revenue, Bloomberg News reported on Sunday. New York Attorney General Eric Schneiderman is probing a practice that reduces tax liability of the buyout firms by converting management fees paid by their investors into fund investments, which are taxed at a lower rate. At least a dozen firms were subpoenaed in July, one of the people said. Other firms that received subpoenas include KKR & Co., TPG Capital, Silver Lake and Providence Equity Partners Inc.

U.S. accounting watchdogs said that a review of 10 brokerage auditors found they all performed deficient work, and some failed to take required steps to help ensure investors’ funds are safeguarded, Bloomberg News reported today. Reviews of 23 broker audits conducted by the firms found most financial statements were not reviewed well enough to justify signing off on them, the Public Company Accounting Oversight Board (PCAOB) said yesterday in a report on its interim inspection program. The PCAOB did not name the auditors and brokerages in the report and said they were all smaller firms. The report came a week after New York-based WJB Capital Group Inc. was expelled from the brokerage industry for misstating financial records and nine months after the collapse of MF Global Holdings Ltd., which left customer funds unaccounted for when it filed for bankruptcy.

A former California-based hedge fund manager who took the stand in his own defense was convicted of insider trading, the New York Times DealBook blog reported yesterday. After less than a day of deliberations, a federal jury found Doug Whitman of Whitman Capital in Menlo Park, Calif., guilty of earning about $1 million in illegal profits trading technology stocks. Whitman faces a maximum possible sentence of 25 years in prison, and his sentencing is set for Dec. 20.

Syracuse, N.Y., has asked for a legal opinion on a municipal bankruptcy, but no current credit factors suggest that the city would need to take this step in the near future, Fitch Ratings said on Thursday. Syracuse has a population of 145,170 and a median income of $30,891 - well below the state's $55,603. Syracuse is one of several cities across the state and the nation still struggling with the recession's legacy of high unemployment and the rapidly rising costs of benefits for its public workers. New York is one of 15 U.S. states that formally allow local governments to file for bankruptcy under chapter 9, but it has a long tradition of intervening to prevent them. Fitch rates Syracuse's limited tax general obligations A, with a negative outlook linked to "concerns about the city's ability to reverse operating deficits." Read more.