Blog Posts Tagged With Corporate and Other Issues

Subscribe to Corporate and Other Issues RSS Feed

SEC v. Clovis Oncology, Inc., et al. (D. Colo. Sept. 18, 2018, Settled)

Action against Defendants, a biopharmaceutical company, its CEO, and former CFO, for allegedly misleading investors about a developmental drug for lung cancer.  The SEC alleges that Defendants misrepresented the drug’s efficacy rate to investors, which caused a decline in stock price when the actual efficacy rate was revealed.  The corporate Defendant has agreed to pay a $20 million civil penalty and Defendant CEO has agreed to pay a $250,000 civil penalty.  Defendant CFO has agreed
Continue Reading

In re Abtech Holdings, Inc. (A.P. Sept. 17, 2018, Settled); In re Glenn R. Rink (A.P. Sept. 17, 2018, Settled); In re Lane J. Castleton (A.P. Sept. 17, 2018, Settled)

Action against Respondents, an environmental technology company, its CEO, and its CFO, for alleged material misstatements and omissions regarding the status of a material contract. Respondent company has agreed to pay disgorgement of $29,610, prejudgment interest of $3,804.64, and a civil penalty of $100,000.  Respondent CEO has agreed to pay a civil penalty of $60,000.  Respondent CFO has agreed to pay a civil penalty of $35,000.

SEC Administrative Summary 

SEC Order Abtech 

SEC Order Rink
Continue Reading

In re Capital Analysts, LLC (A.P. Sept. 14, 2018, Settled)

Action against Respondent, a registered investment adviser, for alleged failure to disclose conflicts of interest arising out of a compensation arrangement with Respondent’s affiliated broker-dealer.  According to the SEC, Respondent invested some of its advisory clients in higher-fee share classes when lower-fee share classes were available.  The SEC alleges that Respondent failed to disclose to its clients that its affiliated broker-dealer received fees from investments in the higher-cost share classes.  The SEC further alleges that
Continue Reading

SEC v. Nevada Sports Investment Group, LP (D. Nev. Sept. 7, 2018, Settled)

Action against Defendant, a sports betting firm, for allegedly conducting an unregistered securities offering and soliciting investors.  The SEC alleges that Defendant promoted various investment opportunities on the internet and collected money from investors without registering with the SEC or performing due diligence on the investors, some of whom were not accredited.  Defendant has agreed to a permanent injunction against future violations and will send a copy of the final judgment to the involved investors.
Continue Reading

SEC v. Contrarion Investments, LLC (D. Nev. Sept. 7, 2018, Settled)

Action against Defendant, a sports betting firm, for an alleged unregistered securities offering.  The SEC alleges that Defendant promoted various investment opportunities on the internet and collected money from investors without registering with the SEC or performing due diligence on the investors, some of whom were not accredited.  Defendant has agreed to a permanent injunction against future violations.

SEC Litigation Release
Continue Reading

In re Joohyun Bahn, a/k/a Dennis Bahn (A.P. Sept. 6, 2018, Settled)

Action against Respondent, a former real estate broker for a foreign private issuer, for alleged FCPA violations.  The SEC alleges that Respondent used an accomplice to attempt to bribe a foreign official in the Middle East in connection with Respondent’s attempts to sell a building on behalf of the foreign private issuer.  According the SEC, the foreign official never became aware of the bribe.  The SEC further alleges that these payments were not reflected in
Continue Reading

SEC v. In Ovations Holdings, Inc. and Mark Goldberg (E.D.N.Y. Sept. 5, 2018, Contested)

Action against Defendants, a microcap company and its CEO, for alleged false and misleading statements to potential investors.  The SEC alleges that Defendants issued press releases falsely claiming that they had obtained rights to market a technology for the detection of early stage lung cancer and had acquired interests in various other companies in order to induce investors to purchase shares in the company at inflated prices.

SEC Litigation Release
Continue Reading

SEC v. Tangoe, Inc., et al. (D. Conn. Sept. 4, 2018, Partially Settled and Partially Contested)

Action against Defendants, a defunct telecommunications expense management company and four of its former senior executives, for alleged improper accounting practices and misrepresentation of revenue.  The SEC alleges that Defendants improperly recognized revenue for transactions that did not occur and for work not yet performed in order to increase Defendant company’s reported revenue.  According to the SEC, one Defendant executive falsified company records, including records that were reviewed by external auditors.  Defendant company has agreed
Continue Reading

In re Hari K. Ravichandran (A.P. Aug. 21, 2018, Settled)

Action against Respondent, founder and CEO of a cloud-based platform solutions company, for alleged misrepresentations to investors.  The SEC alleges that Respondent’s company represented that it used subscriber count and average revenue per subscriber to evaluate its operating and financial performance, and Respondent failed to correct material misrepresentations and omissions about those figures made to investors.  Respondent has agreed to pay disgorgement of $953,005.65, prejudgment interest of $114,620.02, and a civil penalty of $320,000.

SEC
Continue Reading

In re Waruna Tivanka Ellawala (A.P. Aug. 21, 2018, Settled)

Action against Respondent, CFO of a cloud-based platform solutions company, for alleged misrepresentations to investors.  The SEC alleges that Respondent’s employer represented that it used subscriber count and average revenue per subscriber to evaluate its operating and financial performance, and Respondent failed to correct material misrepresentations and omissions about those figures that were made to investors despite having learned contradictory information.  Respondent has agreed to pay disgorgement of $15,566.77, prejudgment interest of $1,785.45, and a
Continue Reading

SEC v. Harpreet Grewal (D. Mass. Aug. 21, 2018, Contested)

Action against Defendant, the former CFO of a marketing solutions subscription company, for allegedly hiding slowing customer growth from investors and inflating publicly reported subscriber numbers.  According to the SEC, Defendant designed a program to provide free service to cancelling customers in order to postpone their cancellations from the end of one fiscal quarter into the beginning of the next, and included these customers in paying customer counts reported to investors.

SEC Litigation Release

SEC
Continue Reading

In re Ribbon Communications, Inc., et al. (A.P. Aug. 7, 2018, Settled)

Action against Respondents, a cloud communications company, its former CFO, and its former SVP of sales, for alleged material misstatements to investors regarding projected revenue.  According to the SEC, Respondent CFO stated that he was comfortable that estimated revenue would be approximately $74 million in the next quarter despite red flags indicating that the estimate was incorrect.  Respondent Company later announced that it was revising its revenue guidance from $74 million to $47-$50 million.  Respondent
Continue Reading

SEC v. Roger Duffield and Plandai Biotechnology, Inc. (S.D.N.Y. Aug. 2, 2018, Contested)

Action against Defendants, a biotechnology company and its CEO, for alleged unregistered sales of stock to investors and failure to disclose that proceeds from these sales were transferred to a private company owned by Defendant CEO.  The SEC further alleges that these payments were not recorded in the corporate Defendant’s books and records.

SEC Litigation Release
Continue Reading

SEC v. Axesstel, Inc., et al. (S.D. Cal. June 28, 2018, Settled)

Action against Defendants, a telecommunications equipment company, its CEO, its CFO, and its director of sales, for allegedly misstating revenue in the Company’s financials.  The SEC alleges that Defendants recognized revenue on non-existent purchases and purchases that were not finalized, and also inflated the unit prices associated with sales.  The SEC further alleges that Defendant executives made material misrepresentations to the company’s auditors.   Defendant CFO has agreed to pay a penalty of $40,000 and to
Continue Reading

SEC v. Bhushan Dandawate (N.D. Ill. July 19, 2018, Settled)

Action against Defendant, owner of two consulting and IT solutions companies utilized by Quadrant 4 System Corporation (“QFOR”), in connection with an alleged scheme to aid two QFOR executives’ material misrepresentations regarding the company’s performance and to conceal misappropriation of company funds.  The SEC alleges the Defendant used bank accounts and business enterprises under his control to obscure the executives’ misappropriation of funds and to create the appearance of an increase of the company’s business.  
Continue Reading

SEC v. Steven J. Barber and Larry Lee Arrowood (M.D. Fla. July 18, 2018, Settled in part and Contested in part)

Action against Defendants, president and CEO of a battery manufacturer, in connection with alleged misrepresentations regarding the company’s performance.  The SEC alleges that Defendants distributed misleading press releases regarding the amount of customer orders received by the company and its production capabilities. Defendant Arrowood has agreed to pay a civil penalty of $50,000 and to an officer and director bar, while the SEC’s litigation continues against Barber.

SEC Complaint

SEC Litigation Release
Continue Reading

SEC v. Centor Energy Inc., and Frederick DaSilva (S.D.N.Y. July 17, 2018, Settled)

Action against Defendants, an oil exploration company and its CEO, in connection with alleged misrepresentations regarding the company’s business position.  The SEC alleges that Defendants made misrepresentations regarding oil reserves on company-leased land, its ability to acquire additional land, and the affiliation of geologists who produced oil reserve projections in press releases, company literature, and SEC filings.  The SEC further alleges that Defendant CEO materially misstated stock-purchase options he held.  Defendant CEO has agreed to
Continue Reading

SEC v. John D. Schiller, Jr. (S.D. Tex. July 16, 2018, Settled)

Action against Defendant, the CEO of an oil and gas company, in connection with failure to disclose personal loans that were secured in exchange for business contracts and other rewards stemming from Defendant’s corporate position.  The SEC alleges that Defendant failed to disclose that he had secured personal loans from a vendor in exchange for business and from an individual investment advisor in exchange for his seat on the board of directors.  Defendant has agreed
Continue Reading

In re Advanced Drainage Systems, Inc. and Mark B. Sturgeon (A.P. July 10, 2018, Settled)

Action against Respondents, a drainage pipe manufacturer and its former CFO, in connection with alleged misleading financial statements made in connection with Respondent Company’s IPO and subsequent periodic reports.  The SEC alleges that Respondent CFO improperly categorized certain expenses and cost, which led to overstatement of earnings.  The SEC further alleges that Respondent Company failed to implement proper internal accounting controls and procedures.  Respondent CFO has agreed to reimburse the Respondent Company $173,970 and pay
Continue Reading

In re KBR, Inc. (A.P. July 2, 2018, Settled)

Action against Respondent, an engineering and construction company, in connection with alleged improper revenue recognition and reporting and insufficient internal accounting controls.  The SEC alleges that, because of its failure to properly estimate the cost and timeline of certain projects, Respondent improperly overstated revenue in its filing.  Respondent, who restated its financials, has agreed to pay a $2,500,000 civil penalty.

SEC Order
Continue Reading

In re Beam Suntory, Inc. (A.P. July 2, 2018, Settled)

Action against Respondent, an alcoholic beverage company, in connection with alleged Foreign Corrupt Practices Act violations in India. The SEC alleges that the Defendant’s subsidiaries and business affiliates made improper payments to Indian government regulators and procurement officials.  Respondent has agreed to pay $5,264,340 in disgorgement, $917,498 in prejudgment interest, and a $2 million civil penalty.

SEC Order

SEC Press Release
Continue Reading

In re Dow Chemical Company (A.P. July 2, 2018, Settled)

Action against Respondent, a chemical products company, in connection with alleged failure to disclose in its annual proxy statements about $3 million worth of perquisites, including the use of the company aircraft and other expenses, which should have been disclosed as “other compensation” to its named executive officers.  Respondent has agreed to pay a civil penalty in the amount of $1,750,000 and to retain an independent consultant for a period of one year to review
Continue Reading

LexBlog