Archive

October 25, 2022

Ramiro Jose Sugranes and Lina Maria Garcia (Chief Compliance Officer and President of UCB Financial Advisors, Inc.), along with two relief defendants related to Sugranes, must pay $5.7 million for cherry picking investments to divert profitable trades to their family members while saddling other clients with losing trades. Defendants made $4.6 million in unlawful profits on the scheme. Garcia provided Sugranes with UCB’s trading platform login information, which Sugranes used to effectuate the fraud. SEC

October 24, 2022

Cetera Advisors, LLC and Cetera Advisor Networks, LLC were ordered to pay over $8.5 million in disgorgement, prejudgment interest, and civil penalties combined. Defendants breached their fiduciary duty to their retail advisory clients by not disclosing compensation-related conflicts of interest. SEC

October 21, 2022

Michael J. DaCorta of Sarasota, FL will spend 23 years in prison for his role in a FOREX Ponzi scheme which caused at least 700 investors to lose over $80 million. DaCorta and his co-conspirators lured victims to invest in their Oasis International Group, Ltd. fund by touting Oasis as a “market maker” collecting “spread” on massive FOREX trades. In fact, Oasis was funding a Ponzi scheme, paying Oasis’ earnings back to Oasis, creating the illusion of revenue. Oasis provided fictitious account statements to customers, concealing the underlying trading losses, while funding the fraudsters’ lavish lifestyles. USAO MDFL

October 21, 2022

Mattel Inc. has agreed to pay $3.5 million to settle charges of making material misstatements in its third and fourth quarter 2017 financial statements.  The toy manufacturer was found to have understated its third quarter tax valuation allowance by $109 million and overstated its fourth quarter tax expense by the same amount, resulting in a net loss and net loss per share that was understated by 15% and overstated by 63% respectively.  In connection with this action, the SEC launched an investigation into a former audit partner at Pricewaterhouse Coopers LLP, Joshua Abrahams, for the audit failure.  SEC

October 18, 2022

Building materials manufacturer Lafarge S.A., together with its Syrian subsidiary, pleaded guilty to conspiring to provide material support and resources to U.S.-designated foreign terrorist organizations, paying penalties, fines, and forfeitures totaling $778 million.  According to the plea, during the civil war in Syria, Lafarge negotiated to pay armed factions to ensure continued operation of a cement plant it operated in Syria.  Defendants effectively entered into a revenue-sharing agreement with ISIS, paying the terrorist organization based on the amount of cement that defendants were able to sell.  DOJ; USAO EDNY

October 17, 2022

In one of New Jersey’s largest civil monetary recoveries ever, Credit Suisse Securities (USA) LLC, Credit Suisse First Boston Mortgage Securities Corp., and DLJ Mortgage Capital, Inc. (collectively, “Credit Suisse”) has agreed to pay $495 million to settle a lawsuit involving misrepresentations it made to investors on the risks of residential mortgage-backed securities (RMBS) in the years leading up to the 2008 financial crisis.  Approximately $100 million will resolve a civil monetary penalty, while another $300 million will be allocated toward restitution for victims nationwide.  Although Credit Suisse previously settled with DOJ for $5.28 billion and with New York for $10 million, the New Jersey settlement is the first to provide restitution.  NJ AG

October 13, 2022

Daniel Adam Hewko and his company, Main & Prospect Capital, LLC (MPC), have been ordered to pay over $7.9 million and be permanently barred from registering and trading with the CFTC, after they were found to have failed to register as an associate of a commodity pool operator, misappropriated client funds, and committed fraud.  Rather than invest client funds into a MPC-managed pooled investment vehicle called the Global Opportunity Fund, Hewko used the funds to benefit himself, his family, and unrelated companies, while issuing false statements to clients that showed false growth.  CFTC

October 7, 2022

After over a decade on the run, Baron Matson of Australia has been sentenced to 5 years in prison, ordered to pay $4.3 million in restitution, and ordered to forfeit $1.3 million for deceiving investors in Florida, Georgia, and Tennessee over twenty years ago.  Matson had misrepresented to investors that he and his father, Roger Matson—both operating under the surname Bronstein—earned large sums of money by betting on horse races, and that a $75,000 investment ahead of the 2000 Melbourne Cup would be guaranteed, with any profits distributed to investors after.  However, the Matsons disappeared with all the funds shortly after the race.  Baron Matson was discovered living under an alias in 2015, and after lengthy litigation, was extradited to the U.S. to face prosecution.  USAO MDFL

October 4, 2022

A rancher who was convicted of defrauding two food companies out of $244 million, in one of the largest fraud schemes ever prosecuted in the Eastern District of Washington, has been sentenced to 11 years in federal prison.  Cody Allen Easterday and his Easterday Ranches Inc. had entered into agreements with Tyson Foods and one other company, whereby the two food companies would advance Easterday funds for buying and raising cattle, then be repaid with interest after the cattle were slaughtered and sold.  Rather than buying and raising cattle, however, Easterday used the funds to cover losses incurred from commodity futures trading, benefit the ranch, and benefit himself.  Easterday also submitted false paperwork to the world’s largest financial derivatives exchange, the CME Group Inc., to exempt his ranch from certain position limits in live cattle futures contracts.  USAO EDWA

September 30, 2022

BGC Derivative Markets, L.P. (BGCD) has been ordered to pay $1.9 million in civil penalties and to comply with certain undertakings in order to settle charges of failing to accurately report nearly 16,000 swap transactions to the CFTC.  The failures were a result of 14 separate reporting systems issues.  As a result of the settlement, BGCD will have to conduct a review of its swaps reporting program, implement a reconciliation process for those transactions, and submitted a written report to the CFTC in a year.  CFTC