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A company about nothing: SPACs and fraud

Posted  10/27/20
Tablet showing trending stock
The hot retro design trend these days is not only slip dresses and tie-dye, but an once-obscure investment vehicle called a Special Purpose Acquisition Company or SPAC.  SPACs (aka “blank check” companies) are sweeping the nation as the darling of investors who wish to take a company public without the scrutiny of an IPO.

So what is a SPAC?

With due apologies to Seinfield, SPACs are companies about nothing. ...

Catch of the Week: Goldman Sachs Agrees to Pay Over $2.9 Billion in Foreign Bribery Case

Posted  10/23/20
businessmen shaking hands and other placing money in others pocket
The Goldman Sachs Group Inc. and its Malaysian subsidiary have admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA) by engaging in a scheme to pay more than $1.6 billion in bribes to foreign officials in exchange for lucrative contracts.  According to Goldman’s admissions and court documents, Goldman paid these bribes to foreign officials in Malaysia and Abu Dhabi in order to obtain and retain...

JPMorgan Chase Pays nearly $1 Billion in Fines for Market Manipulation of Precious Metals and U.S. Treasuries

Posted  10/16/20
investors on computers for market trading
JPMorgan Chase & Co. agreed to pay over $955 million to settle civil and criminal charges over a scheme involving fake trades in precious metals and U.S. treasuries designed to manipulate the market in an effort to enhance the bank’s profits and cut losses. The multi-agency enforcement action was brought by the Commodity Futures Trading Commission (CFTC), the Department of Justice (DOJ) and the Securities and...

SEC Has Record Year of Whistleblower Rewards

Posted  10/9/20
Securities and Exchange Commission logo with a stack of coins and cash on top
The SEC closed out its fiscal year (September 30) with an avalanche of whistleblower awards, doling out 15 awards for a total of more than $50 million in September alone.  Six of those awards were made on September 30, clearly highlighting the SEC's desire to trumpet the success of its whistleblower program for this record-breaking year. The SEC also seems to be standing strong in its continued messaging to...

COVID Frauds of the Week: Fraudulently Claiming PPP Loans

Posted  10/2/20
person following a trail of money
This week, DOJ took action against two large alleged frauds on the Paycheck Protection Program.  In Hawaii and North Carolina, individuals were charged with fraudulently claiming loans from the critical relief program. In North Carolina, Tristan Pan found himself charged with wire and bank fraud, plus unlawful monetary transactions, for an alleged scheme to get bogus PPP loans.  He allegedly cooked up a series of...

The FinCEN Files Prove We Need an Anti-Money-Laundering Whistleblower Program

Posted  09/25/20
dryer with money filled in it
The FinCEN Files. It sounds ominous, and recalls the Panama Papers, the Paradise Papers, and others. Like those earlier stories, the FinCEN Files expose powerful players, including a large number of highly regulated banking giants. The FinCEN Files, published by the International Consortium of Investigation Journalists and BuzzFeed News, document over 200,000 suspicious financial transactions via documents leaked...

With over $136 million in Whistleblower Awards in 2020, the SEC Amends the Rules of its Whistleblower Program

Posted  09/25/20
Securities and Exchange Commission building with logo zoomed in
In a public meeting held earlier this week, the SEC approved - by a 3-2 vote - several changes to its remarkably successful whistleblower program. Most notably, the Commission withdrew a 2018 contentious proposal which would have authorized it to reduce the amount of money in rewards issued in large enforcement actions where at least $100 million were collected. Moreover, all five Commissioners recognized the...

Putting a Stop to Illegal Imports from Forced Uyghur Labor

Posted  09/18/20
barbed wire
The world has watched in horror as, starting in 2018, up to two million Uyghurs and other ethnic minorities have been arrested, relocated, or otherwise forced into internment centers in the Xinjiang Uyghur Autonomous Region in China.  The government of the People’s Republic of China has separated thousands of Uyghur children from parents, forced methods of control on women, and inflicted physical and psychological...

COVID Frauds of the Week: More PPP and PPE Fraudsters, and an Update

Posted  09/17/20
hundred dollar bill zoomed in
Attorney General William P. Barr announced the results of his Payroll Protection Program (PPP) Criminal Fraud Enforcement Action this week, and noted that as of August 8, 2020, over 5.2 million loans had been approved, with a total federal expenditure of over $525 billion in federal business support expenditures. The downside is that Paycheck Protection Program fraudsters have cost the government over $70 million in...

CFTC Sets Sights on Binary Options Fraud

Posted  09/17/20
commodity futures trading commission logo
The CFTC continues its hot streak, aggressively pursuing fraudsters and rewarding whistleblowers who come forward with valuable information.  One particular enforcement trend stands out: a number of high-profile settlements related to illegal binary options trading platforms. Binary options are the OTB of the stock market—a method of gambling whether particular stocks will go up or down without actually...
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