Blog Posts Tagged With Cases of Interest

In re Khaled Khaled (A.P. Nov. 29, 2018, Settled)

Action against Respondent, a celebrity music producer, for alleged touting violations in connection with initial coin offerings. According to the SEC, Respondent promoted three initial coin offerings on his social media accounts without disclosing that the issuers were compensating him for the publicity.  Defendant has agreed to pay disgorgement of $50,000, prejudgment interest of $2,725.72, and a civil penalty of $100,000.

SEC Order

SEC Press Release
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In re Floyd Mayweather Jr. (A.P. Nov. 29, 2018, Settled)

Action against Respondent, a professional boxer, for alleged touting violations in connection with initial coin offerings.  According to the SEC, Respondent promoted three initial coin offerings on his social media accounts without disclosing that the issuers were compensating him for the publicity.  Respondent has agreed to pay disgorgement of $300,000, prejudgment interest of $14,775.67, and a civil penalty of $300,000.

SEC Order

SEC Press Release
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In re Paragon Coin, Inc. (A.P. Nov. 16, 2018, Settled)

Action against Respondent, a company established to implement blockchain technology in the cannabis industry, for an alleged unregistered offering. According to the SEC, Defendant publicly offered and sold digital tokens to raise capital without registering the offering or attempting to qualify for an exemption to the registration requirements.  Defendant has agreed to pay a civil penalty of $250,000.

SEC Press Release

SEC Order
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In re CarrierEQ, Inc., d/b/a Airfox (A.P. Nov. 16, 2018, Settled)

Action against Respondent, a mobile technology business, for an alleged unregistered offering.  According to the SEC, Defendant publicly offered and sold digital tokens to raise capital without registering the offering or attempting to qualify for an exemption to the registration requirements.  Defendant agreed to pay a civil penalty of $250,000.

SEC Press Release

SEC Order
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SEC v. Mark E. Fisher and Joseph F. Capuozzo (S.D. Fla. Oct. 22, 2018, Settled)

Action against Defendants, an attorney and a businessman, for their alleged participation in a “pump and dump” scheme. The SEC alleges that Defendants acquired penny stock shares, launched a marketing campaign to boost the stock’s liquidity and price, and then sold the shares.  Defendants have agreed to lifetime bars from participating in penny stock offerings and will pay disgorgement, interest, and civil penalties in amounts to be determined by the court. Parallel criminal charges have
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SEC v. Jean Danhong Chen, et al. (N.D. Cal. Oct. 18, 2018, Contested)

Action against Defendants, an immigration attorney, her husband, her law firm, a family friend, a family employee, and two of the couple’s owned entities, for alleged facilitation of an EB-5 visa offering fraud.  According to the SEC, Defendants received over $10 million in undisclosed commissions from sales of securities to Defendant attorney’s clients. The SEC also alleges that Defendant attorney and Defendant husband advised clients to invest in an EB-5 immigrant investor regional center that
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SEC v. Blockvest, LLC and Reginald Buddy Ringgold, III a/k/a Rasool Abdul Rahim El (S.D. Cal. Oct. 3, 2018, Contested)

Action against Defendants, a cryptocurrency exchange and index fund and its founder and principal, for alleged misrepresentations in connection with a cryptocurrency offering.  According to the SEC, Defendants falsely claimed that their initial coin offering was licensed and regulated by the SEC and that their business would be audited by an accounting firm.

SEC Litigation Release

SEC Press Release
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CFTC v. Gelfman Blueprint, Inc. and Nicholas Gelfman (S.D.N.Y. Oct. 1, 2018, Consent Order)

Action against Defendants, a Bitcoin hedge fund and its CEO, for alleged operation of a Bitcoin Ponzi scheme.  According to the CFTC, Defendants promised to use investor funds in a high-frequency algorithmic trading strategy but instead used the funds to make payouts to other investors.  The CFTC also alleges that Defendants falsified performance reports and staged a computer hack to conceal trading losses and misappropriation of investor funds.  Defendant company has agreed to pay restitution
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 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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