Blog Posts Tagged With Cases of Interest

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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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
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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
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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
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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. 
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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
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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
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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
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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
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