Blog Posts Tagged With Cases of Interest

 SEC v. Elon Musk (S.D.N.Y. Sept. 27, 2018, Settled); SEC v. Tesla, Inc. (S.D.N.Y. Sept. 29, 2018, Settled)

Action against Defendants, a car company and its CEO and former Chairman, in connection with a series of allegedly false and misleading Twitter communications by Defendant CEO.  According to the SEC, Defendant CEO tweeted to followers that, subject to a shareholder vote, Defendant company had secured sufficient funding to go private at a higher price than its trading price.  The SEC alleges that Defendant CEO knew that the transaction was not definite and that he
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In re Petróleo Brasileiro S.A. – Petrobras (A.P. Sept. 27, 2018, Settled)

Action against Respondent, an oil and gas company, for misleading investors in connection with an alleged corruption scheme.  According to the SEC, some of Respondent’s former senior executives, in conjunction with Respondent’s contractors and suppliers, raised the cost of infrastructure projects in order to receive kickbacks which were then paid to foreign politicians and political parties who had helped the senior executives obtain their titles with Respondent.  The SEC further alleges that the former executives
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In re ICAP Capital Markets LLC n/k/a InterCapital Capital Markets LLC (A.P. Sept. 18, 2018, Settled)

Action against Respondent, a registered introducing broker, for allegedly aiding and abetting attempts of some of its clients to manipulate the USD ISDAFIX benchmark.  The CFTC alleges that Respondent’s swaps brokers assisted some of Respondent’s bank clients with attempted manipulation of the benchmark to benefit the client’s derivatives positions.  Respondent has agreed to pay a $50 million civil penalty and post-judgment interest.

CFTC Press Release 

CFTC Order
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In re Bank of America, N.A. (A.P. Sept. 18, 2018, Settled)

Action against Respondent bank, a provisionally registered swaps dealer, for allegedly attempting to manipulate the USD ISDAFIX benchmark.  The CFTC alleges that Respondent made false submissions and engaged in manipulative trading in  targeted interest rate products to benefit its derivatives positions.  Respondent has agreed to pay a $30 million civil penalty and post-judgment interest.

CFTC Press Release   

CFTC Order
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In re Citigroup Global Markets, Inc. and Citi Order Routing and Execution, LLC (A.P. Sept. 14, 2018, Settled)

Action against Respondent bank and its affiliate for alleged material misstatements to institutional customers related to a “dark pool” operated by Respondent affiliate.  The SEC alleges that Respondent  bank misrepresented that the “dark pool” was an exclusive trading venue that did not allow high-frequency traders.  The SEC further alleges that Respondent bank failed to disclose to customers that it routed some of their orders to external, less expensive trading venues and that Respondent affiliate improperly
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In re Convergex Execution Solutions, LLC, now known as Cowen Execution Services LLC (A.P. Sept. 13, 2018, Settled)

Action against Respondent, a broker-dealer, for alleged incomplete and inaccurate regulatory filings.  The SEC alleges that Respondent failed to take reasonable steps to ensure that the securities transactions reported in its electronic “blue sheets” submissions contained complete and accurate information, such as customer identifying information, order execution times, and additional trade execution information.  Respondent has agreed to pay a civil penalty of $2.75 million.

SEC Order  

SEC Press Release
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In re TokenLot, LLC, et al. (A.P. Sept. 11, 2018, Settled)

Action against Respondents, an unregistered broker-dealer and its two operators, for the alleged online sale and advertisement of unregistered securities in the form of digital tokens.  The SEC alleges that Respondents solicited and executed digital token orders during initial coin offerings and additionally sold digital tokens for trading on secondary markets.  According to the SEC, Respondents failed to make required registrations as a broker-dealer.  Respondents have agreed to pay, jointly and severally, disgorgement of $471,000
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In re United Technologies Corporation (A.P. Sept. 11, 2018, Settled)

Action against Respondent, a high-technology manufacturer, for alleged violations of the FCPA’s anti-bribery, books and records, and internal accounting controls provisions.  According to the SEC, Respondent, through its wholly owned subsidiary, made improper payments to Azerbaijani officials to influence sales of Respondent’s elevator equipment.  The SEC further alleges that one of Respondent’s joint ventures made payments to a sales agent despite knowing that the agent would likely use the funds to improperly pay a Chinese
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In re Crypto Asset Management, LP and Timothy Enneking (A.P. Sept. 11, 2018, Settled)

Action against Respondents, an unregistered cryptocurrency hedge fund manager and its principal, for the alleged sale of unregistered securities.  The SEC alleges that Respondents failed to make required registrations and misrepresented their filing status to potential investors while raising money for a cryptocurrency investment fund.  Respondents have agreed to pay a $200,000 civil penalty.

 SEC Order  

SEC Press Release

 
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In re Sanofi (A.P. Sept. 4, 2018, Settled)

Action against Respondent, a pharmaceutical company, for alleged violations of the FCPA’s books and records and internal accounting controls provisions.  According to the SEC, Respondent, through its subsidiaries in Kazakhstan and the Middle East, paid bribes to foreign officials in Central Asia, the Levant, and the Persian Gulf region to increase sales of Respondent’s products and falsified expense reports in order to conceal these payments.  The SEC further alleges that Respondent’s distributors bid on government
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SEC v. Kendricks, et al. (E.D. Pa. Aug. 29, 2018, Contested)

Action against Defendants, a professional athlete and former investment bank analyst, for alleged insider trading.  According to the SEC, Defendant banker shared information regarding upcoming acquisition with Defendant athlete. The SEC alleges that, while in possession of this information, Defendant athlete purchased shares in the companies that were soon to be acquired and sold his positions after the deals were publicly announced.  The SEC further alleges that Defendant athlete rewarded Defendant banker with cash, NFL
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In re BNP Paribas Securities Corp. (A.P. Aug. 29, 2018, Settled)

Action against Respondent bank for attempted manipulation of the USD ISDAFIX benchmark.  According to the CFTC, Respondent bid, offered, and executed transactions in interest rate swap spreads in a manner designed to influence the published ISDAFIX in order to benefit Respondent’s derivatives positions.  The CFTC also alleges that Respondent attempted to manipulate and made false reports concerning the ISDAFIX by skewing Respondent’s submissions in order to benefit Respondent at the expense of its derivatives counterparties
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In re Moody’s Investors Service, Inc. (A.P. Aug. 28, 2018, Settled)

Action against Respondent, a nationally recognized statistical rating organization, in connection with alleged failure to establish, maintain, enforce, and document policies and procedures reasonably designed to clearly define and apply credit rating symbols.  According to the SEC, Respondent’s definition of structured finance securities called “Combo Notes” did not adequately inform investors regarding what the ratings did and did not address. Respondent has agreed to pay a civil penalty of $1,250,000.

SEC Order  

SEC Press Release
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In re Moody’s Investors Service, Inc. (A.P. Aug. 28, 2018, Settled)

Action against Respondent, a nationally recognized statistical rating organization, for alleged failure to establish, maintain, enforce, and document an effective internal control structure with regard to its use of certain models in connection with its methodology for rating residential mortgage-backed securities (“RMBS”).  According to the SEC, Respondent revised its methodology for rating RMBS by incorporating cash flow waterfall models developed by its corporate affiliate. The SEC alleges that Respondent established policies and procedures that prescribed
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In re Legg Mason, Inc. (A.P. Aug. 27, 2018, Settled)

Action against Respondent, an investment management firm, in connection with alleged violations of the Foreign Corrupt Practices Act.  According to the SEC, Respondent, through its subsidiary, partnered with a global financial services company to solicit business from state-owned financial institutions, in part by paying bribes through an intermediary to obtain investments from the financial institutions.  The SEC also alleged that Respondent lacked appropriate internal accounting controls with respect to the use of introducing brokers and
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In re Merrill Lynch, Pierce, Fenner & Smith Inc. (A.P. Aug. 20, 2018, Settled)

Action against Respondent, a registered investment adviser and broker-dealer, for alleged  failure to disclose a conflict of interest in the portfolio manager evaluation process used to recommend terminations for over fifteen hundred of its retail advisory account.  The SEC alleges that Respondent’s due diligence unit recommended the termination of certain products in which Respondent’s retail advisory clients had invested approximately $575 million and which was managed by a U.S. subsidiary of a foreign bank.  The
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In re Tomahawk Exploration, LLC & David Thompson Laurance (A.P. Aug. 14, 2018, Settled)

Action against Respondents, an oil and gas exploration company and its sole managing member, for allegedly engaging in an unregistered offering of the company’s securities.  The SEC alleges that Respondents offered and sold digital assets called “Tomahawkcoins” (or “TOM”) through an online initial coin offering (“ICO”), purportedly to finance an oil prospect.  According to the SEC, the issuance of approximately 80,000 TOM as part of a “Bounty Program” in exchange for online promotional and marketing
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SEC v. Christopher Collins, et al. (S.D.N.Y. Aug. 8, 2018, Contested); SEC v. Lauren Zarsky (S.D.N.Y. Aug. 8, 2018, Contested); SEC v. Dorothy Zarsky (S.D.N.Y. Aug. 8, 2018, Settled); In re Lauren Zarsky, CPA (Aug. 15, 2018, Settled)

Action against Defendants, a U.S. congressman, his son, and his son’s girlfriend’s father, for allegedly tipping confidential information learned by the congressman in his capacity as an independent director of an Australian biotech company and trading while in possession of that information.  The SEC alleges that Defendant congressman learned from the biotech company’s CEO that a key drug trial had resulted in clinical failure and that he subsequently shared this information with his son, who
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SEC v. Charles Schwab & Co., Inc (N.D. Cal. July 2, 2018, Settled)

Action against Defendant, a registered broker-dealer, for alleged failure to file Suspicious Activity Reports (SARs), as required by the Bank Secrecy Act, in connection with transactions executed by independent investment advisers after Defendant terminated its custodian relationship.  The SEC alleges that Defendant terminated its relationship with the investment advisers after it found their activity was in violation of Defendant’s policies and posed a risk.  The SEC further alleges, however, that the Defendant failed to file
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In re Deutsche Bank Trust Company Americas (A.P. July 20, 2018, Settled)

Action against Respondent, a financial services firm, in connection with its practices related to the pre-release of American Depository Receipts (ADRs).  The SEC alleges that Respondent provided pre-released ADRs to brokers that did not hold the supporting ordinary shares as required by the agreements entered into between Respondent and the brokers and that it should have known, based on the characteristics of the pre-release transactions, that the brokers were not complying with the requirements of
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In re Credit Suisse Group AG (A.P. July 5, 2018, Settled)

Action against Respondent, a financial services holding company, in connection with an alleged violation of the Foreign Corrupt Practices Act in connection with its hiring practices in China.  The SEC alleges that Respondent hired the relatives of prominent Chinese government officials of Chinese state-owned enterprises to gain a business advantage.  The SEC further alleges that Respondent did not subject the hires to proper merit screening as required by its policies or maintain sufficient internal accounting
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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
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In re Société Générale S.A. (A.P. June 4, 2018, Settled)

Action against Respondent, a bank and registered swap dealer, in connection with alleged manipulation of and material misrepresentations regarding international interest rates, including LIBOR.  The CFTC alleges that Respondent’s traders made benchmark submissions based on impermissible factors in an effort to protect its reputation from speculation that it was having difficulty borrowing unsecured funds and to manipulate the setting of benchmarks and benefit its trading positions.  The CFTC further alleges that, even after Respondent became
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In re Chardan Capital Markets, LLC (A.P. May 16, 2018, Settled); In re Jarard Basmagy (A.P. May 16, 2018); In re Industrial and Commercial Bank of China Financial Services, LLC (“ICBC”) (A.P. May 16, 2018, Settled)

Actions against Respondents, a registered broker-dealer, its AML Officer, and a registered broker-dealer specializing in business clearing equity securities, for alleged reporting violations.  The SEC alleges that Respondents Chardan and Basmagy neglected to file Suspicious Activity Reports (“SARs”) despite having reason to suspect that certain penny stock transactions that they executed were associated with fraudulent activity.  The SEC alleges that Respondent ICBC cleared some of these suspicious trades and contacted Chardan regarding the suspicious activity,
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