Blog Posts Tagged With Cases of Interest

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, ... Continue Reading

In re Panasonic Corporation (A.P. Apr. 30, 2018, Settled)

Action against Respondent, a global electronics company, for alleged anti-bribery, anti-fraud, books and records, and internal accounting controls violations.  According to the SEC, Respondent was involved in a bribery scheme whereby it provided a consulting position to a government official to induce him to assist Respondent in obtaining and retaining business from a state-owned airline.  The SEC further alleges that Respondent materially overstated its pre-tax income and net income by backdating an agreement with the ... Continue Reading

In re Altaba Inc., f/d/b/a Yahoo! Inc. (A.P. Apr. 24, 2018, Settled)

Action against Respondent technology company in connection with material misstatements and omissions related to a cyber-breach affecting numerous user accounts.  According to the SEC, Defendant learned of the breach, which resulted in unauthorized access to users’ personal information, but failed to disclose it in its public filing for approximately two years and failed to disclose business risks related to the breach, such as potential future litigation.  In addition, the SEC alleges that Defendant affirmatively denied ... Continue Reading

In re Aegis Capital Corporation (A.P. Mar. 28, 2018, Settled); In re Kevin McKenna, et al. (A.P. Mar. 28, 2018, Settled); In re Eugene Terracciano (A.P. Mar. 28, 2018, Contested)

Actions against Respondents, a registered broker-dealer, its CEO, and two former AML compliance officers, for alleged failure to file required Suspicious Activity Reports (“SARs”).  According to the SEC, Respondents failed to submit SARs related to potential market manipulation despite numerous red flags indicating potential money laundering activity that were brought directly to the attention of Respondents compliance officers and CEO.  Respondent broker-dealer has agreed to pay a civil penalty of $750,000 and retain a compliance ... Continue Reading

In re Kinross Gold Corporation (A.P. Mar. 26, 2018, Settled)

Action against Respondent, a gold mining company, for alleged violations of the books and records and internal controls provisions of the FCPA.  According to the SEC, Respondent paid vendors and consultants without reasonable assurance that the transactions were consistent with their stated purpose and were not improper payments to government officials.  In addition, Respondent allegedly used petty cash to make certain of these payments, which it failed to accurately describe in its books and records.  ... Continue Reading

SEC v. Elizabeth Holmes and Theranos, Inc. (N.D. Cal. Mar. 14, 2018, Settled); SEC v. Ramesh “Sunny” Balwani (N.D. Cal. Mar. 14, 2018, Contested)

Action against Defendants, a medical device manufacturer, its founder and CEO, and its former President, for allegedly raising more than $700 million from investors on the basis of false or misleading claims.  The SEC alleges that Defendants misrepresented the effectiveness of their key product, a portable blood analyzer, and made misrepresentations to potential investors regarding a contract with the Department of Defense.  Defendant Holmes has agreed to pay a $500,000 penalty, to be barred from ... Continue Reading

In re Merrill Lynch, Pierce, Fenner, and Smith Inc. (A.P. Mar. 8, 2018, Settled)

Action against Respondent, a registered broker-dealer, for allegedly effecting an unregistered distribution of a China-based issuer’s shares.  The SEC alleges that Respondent negligently facilitated a purported gift of shares to the issuer’s Chairman that was an unregistered distribution, despite red flags that the gift was an unregistered sale being made by or on behalf of an affiliate of the issuer.  Accordingly, the SEC found that Respondent failed to make a reasonable inquiry and therefore the ... Continue Reading

In re Deutsche Bank Securities, Inc. (A.P. Feb. 1, 2018, Settled)

Action against Respondent for an alleged attempt to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix benchmark (ISDAFIX).  The CFTC alleges that Respondent’s traders attempted to manipulate the benchmark by strategically bidding, offering, and executing transactions in targeted interest rate products at or near the rate fixing time.  The CFTC further alleges that Respondent’s traders attempted to manipulate the final published rate by submitting false rates.  Respondent has agreed to pay a civil ... Continue Reading

In re Deutsche Bank AG, et al. (A.P. Jan. 29, 2018, Settled)

Action against Respondent for allegedly attempting to manipulate the price of precious metals futures contracts using manual spoofing techniques and trading for the purpose of triggering customer stop-loss orders. The CFTC alleges that traders on Defendant’s precious metals desk, acting in a coordinated manner, placed spoof orders and exchanged messages soliciting others to engage in spoofing and regarding their successes in manipulating the markets. The CFTC further alleges that Defendant failed to adequately supervise its ... Continue Reading

In re UBS AG (A.P. Jan. 29, 2018, Settled)

Action against Respondent for allegedly attempting to manipulate the price of precious metals futures contracts using several manual spoofing techniques and trading for the purpose of triggering customer stop-loss orders. Respondent self-reported the issue following an internal investigation and has agreed to pay a $15 million civil penalty and an undertaking to maintain adequate spoofing surveillance and training programs.

 CFTC Press Release ... Continue Reading

SEC v. AriseBank, et al. (N.D. Tex. Jan. 25, 2018, Contested)

Action against Defendants, a company, its co-founder and CEO, and its co-founder and COO, in connection with an alleged fraudulent initial coin offering (“ICO”). According to the SEC, Defendants offered and sold unregistered investments in their cryptocurrency by depicting Defendant AriseBank as a “decentralized bank” offering consumer products and services for which its cryptocurrency could be used. In addition, the SEC alleges that Defendant company falsely stated that it had purchased an FDIC-insured bank which ... Continue Reading

In re Cynthia Holder, CPA, et al. (A.P. Jan. 22 2018, Contested)

Action against Respondents, six certified public accountants including former employees of KPMG and the PCAOB, in connection with alleged unauthorized disclosures of confidential information relating to the Inspections program of the PCAOB, and the use of that information to benefit Respondents and KPMG. According to the SEC, while preparing to leave his supervisory position at the PCAOB for a job at KPMG, a PCAOB official took with him confidential inspection-related materials that he believed might ... Continue Reading

In re Merrill Lynch, Pierce, Fenner & Smith Inc. (A.P. Dec. 21, 2017, Settled)

Action against Respondent, a registered broker-dealer and investment adviser, for alleged failure to adopt and implement anti-money laundering (“AML”) procedures reasonably designed to account for AML risks associated with certain services offered to its brokerage accounts, including ATM cash deposits and money wiring.  The SEC alleges that, as a result, Respondent failed to report certain suspicious activity in its customer accounts to regulators.  Respondent has agreed to pay a $13 million civil money penalty.

SEC ... Continue Reading

In re Munchee Inc. (Dec. 11, 2017, Settled)

Action against Respondent, an app developer, in connection with an alleged unregistered offering.  The SEC alleges that Respondent sought to raise capital to improve its restaurant review app, and relatedly offered and sold digital tokens to be issued on a distributed ledger, also known as an initial coin offering (“ICO”).  Respondent allegedly described to investors how its tokens would increase in value and stated that they would take steps to create a secondary market, but ... Continue Reading

In re Paritosh Gupta, et al. (A.P. Dec. 5, 2017, Settled); In re Brahman Capital Corp. (A.P. Dec. 5, 2017, Settled)

Actions against hedge fund analyst, his hedge fund employer, his spouse, and her hedge fund for improper sharing of confidential information.  The hedge fund analyst allegedly provided his spouse with advice and presentations that she used to set up her own fund and solicit clients, in addition to providing investment advice based on confidential information, which was subsequently used to guide investment strategy.  Respondent analyst agreed to pay a civil penalty of $250,000 and the ... Continue Reading

SEC v. Susan L. Ellerin (D. Mass. Nov. 14, 2017, Settled)

Action against Defendants, a marketing and management consultant and her friend, for allegedly trading on material nonpublic information obtained by Defendant consultant while performing consultant services for the subsidiary of a private equity firm. According to the SEC, Defendant consultant allegedly tipped her friend that the private equity firm would be acquiring ADT Corporation (“ADT”). Defendants allegedly purchased shares of ADT while in possession of this information and before the acquisition was announced. Defendants agreed ... Continue Reading

SEC v. Gerardo de Nicolás et al. (S.D. Cal. Oct. 11, 2017, Contested)

Action against CEO of Mexico-based homebuilding company Desarrolladora Homex S.A.B. de C.V., and other executive officers with an alleged $3.3 billion accounting fraud based on reporting revenues for homes that had not been built. The SEC used satellite imagery to help uncover the accounting scheme and illustrate its allegation that Homex had not even broken ground on many of the homes for which it reported revenues. The SEC’s complaint also alleges that Defendants caused Homex ... Continue Reading

CFTC v. Scott Allensworth, et al. (C.D. Cal. Oct. 2, 2017, Contested)

CFTC v. Scott Allensworth, et al. (C.D. Cal. Oct. 2, 2017, Contested) – Action against Scott Allensworth, a self-described investment, tax, options, and retirement adviser, his company, and two commodity futures traders for allegedly orchestrating a fraudulent futures trading scheme. According to the CFTC, Defendants fraudulently solicited certain tax and retirement-planning clients to invest in two commodity pools, representing that they were successful traders and sometimes reporting false returns as high as 20% a month. ... Continue Reading

In re Telia Company AB (A.P. Sept. 21, 2017, Settled)

Action against Respondent, a Sweden-based telecommunications provider, for alleged violations of the anti-bribery and internal accounting controls provisions of the Foreign Corrupt Practices Act. According to the SEC, Respondent paid at least $330 million in bribes to an Uzbek government official through sham lobbying and consulting firms in order to acquire a U.S.-based telecommunications company with operations in Uzbekistan and enter the Uzbek telecommunications market. The business obtained through these bribes allegedly generated more than ... Continue Reading

In re State Street Global Markets, LLC, et al. (A.P. Sept. 7, 2017, Settled)

Action against three subsidiaries of State Street Corporation for allegedly charging six transition management customers approximately $20 million in hidden and unauthorized markups and commissions. According to the SEC, Respondents and their employees generated false statements and reports and made other material misstatements and omissions to customers to perpetuate and conceal this scheme. Respondents have agreed to pay a civil penalty of $32.3 million and engage an independent ethics and compliance consultant to review and ... Continue Reading

CFTC v. Monex Deposit Company, et al. (E.D. Ill. Sept. 6, 2017, Contested)

CFTC v. Monex Deposit Company, et al. (E.D. Ill. Sept. 6, 2017, Contested) – Action against three affiliated companies and their principals for allegedly engaging in a large precious metals fraud scheme executed through illegal, off-exchange retail commodity transactions. Respondents allegedly employed high-pressure sales tactics, downplayed risks, misrepresented the massive and pervasive losses suffered by their customers, and made false assurances regarding their fiduciary obligations to attract customers for their leveraged precious metals trading program.  ... Continue Reading

In re Deerfield Management Company, L.P. (A.P. Aug. 21, 2017, Settled)

Action against registered investment adviser for alleged failure to establish, maintain, and enforce policies and procedures reasonably designed to prevent the use of material nonpublic information. To inform its investment decisions, Respondent engaged third-party consultants and research firms to perform research in the healthcare sector. According to the SEC, Respondent’s insufficient oversight over these research firms allowed Respondent’s analysts to receive material nonpublic information from a political intelligence analyst retained by Respondent. Respondent’s analysts allegedly ... Continue Reading

In re Banca IMI Securities Corp. (A.P. Aug. 18, 2017, Settled)

Action against broker-dealer for alleged improper practices in connection with the pre-release of American Depositary Receipts (“ADRs”). The SEC alleges that Respondent’s traders acted in violation of depositary agreements by obtaining and lending pre-released ADRs without first taking reasonable steps to determine whether the requisite number of ordinary shares was owned and custodied by the customer on whose behalf the ADRs were being obtained. Respondent has agreed to pay disgorgement of $18,048,483.28, prejudgment interest of ... Continue Reading

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