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Page 30 of 212

December 15, 2021

Broker-dealer Wedbush Securities Inc. has agreed to pay $1.2 million to resolve allegations related to the unregistered sale of large blocks of 50 different low-priced microcap companies by Silverton SA, a former offshore customer.  The SEC also found that Wedbush failed to file SARs for certain suspicious transactions that it executed for Silverton, despite the presence of numerous red flags.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Money Laundering, Regulatory Violations,

December 13, 2021

Paul Ricky Mata, who worked as a financial advisor, was sentenced to 14 years in prison and ordered to pay $12.6 million in restitution following his guilty plea on charges related to his fraudulent solicitation of customers for investment in his companies including Secured Capital, which he claimed offered guaranteed returns through investments in “government-backed tax liens,” “asset-backed deed certificates,” and distressed commercial and residential properties.  In fact, Mata, who concealed his long history of disciplinary action by regulators, used investor funds to pay his personal expenses.  USAO CD Cal

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations, Ponzi Schemes,

December 7, 2021

The SEC has issued a whistleblower reward of $5 million to an individual who voluntarily provided original information to the Commission regarding the misuse of proceeds from a securities offering.  The SEC found that the whistleblower promptly reported the misconduct, enabling the Commission to quickly bring a successful enforcement action and return millions to harmed investors.  SEC

Tagged in: Financial and Investment Fraud, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,

December 6, 2021

Dialysis provider American Renal Associates Holdings, Inc. and three of its former financial executives have entered into a settlement agreement resolving allegations of accounting fraud; ARA will pay a $2 million civil penalty. The company and it executives allegedly manipulated revenue by improperly recognizing payments from insurance companies for patient services, overstating net income by more than 30% in 2017 and by more than 200% for the first three quarters of 2018.  The company issued restated financial in 2019.  SEC

Tagged in: Accounting Fraud, Financial and Investment Fraud, Misrepresentations,

December 1, 2021

The former CFO of Roadrunner Transportation Systems Inc., Peter R. Armbruster, has been sentenced to two years in prison for participating in a complex accounting fraud scheme that resulted in the company filing materially false statements with the SEC, and eventually tens of millions of dollars in losses to investors.  Armbruster was found to have misrepresented Roadrunner’s expenses, which falsely inflated the company’s reported income.  DOJ

Tagged in: Accounting Fraud, Certifications, Criminal Proceedings,

November 29, 2021

Denari Capital LLC and its principals Travis Capson and Arnab Sarkar have been ordered to pay a total of $4 million in penalties and restitution based on findings that they engaged in foreign exchange (forex) pool fraud and failed to register with the CFTC as a commodity pool operator and associated persons.  Defendants misrepresented Denari’s trading and performance in fraudulent solicitations, issued false account statements, and improperly commingled pool funds.  CFTC

Tagged in: Foreign Exchange, Fraud in CFTC-Regulated Markets, Misrepresentations, Ponzi Schemes, Regulatory Violations,

November 24, 2021

Guy Scott Griffithe, who controlled an entity called Renewable Technologies Solutions, Inc., and Robert William Russell, who owned an entity called SMRB, LLC, have been ordered to pay more than $6 million to resolve charges that they mislead investors by falsely stating that investments in Renewable would be used to operate SMRB, which held a license to grow marijuana under Washington’s recreational cannabis laws.  To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors, which were partially funded in a Ponzi-like fashion using funds from other investors.  Griffithe was found liable for more than $5.3 million in disgorgement, prejudgment interest, and civil penalties; Russell was found liable for more than $698,000 in disgorgement, prejudgment interest, and civil penalties.  SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Ponzi Schemes, Securities Fraud,

November 22, 2021

Two whistleblowers who provided the SEC with new and significant information during an existing investigation, including information about misconduct occurring in different geographic areas, received awards of approximately $6.2 million and $1.3 million.  The award to the first claimant was also based in part on a recovery in a related action, based on findings that the whistleblower provided information to the relevant other agency.  In support of the first claimant’s larger award, the SEC also cited that their information was more significant, that the majority of the relief ordered was based on information provided by them, that they reported their concerns internally prior than reporting to the SEC, and they reported more expeditiously.  SEC

Tagged in: Financial and Investment Fraud, Multiple Whistleblowers and First-to-File, SEC Whistleblower Reward Program, Whistleblower Rewards,

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