Archive

February 14, 2024

A merchant cash advance operator who was found guilty of deceiving small businesses has been ordered to pay $20.3 million in civil penalties and monetary relief.  Jonathan Braun was convicted of misrepresenting the terms of merchant cash advances his business provided, using unfair collection practices, and threatening consumers with physical violence to get them to pay up.  FTC

February 9, 2024

Simple Health Plans LLC and CEO Steven J. Dorfman have been ordered to pay $195 million for violating the FTC Act and Telemarketing Sales Rule and misleading consumers into believing they were signing up for healthcare plans that covered a wide array of services.  Despite  paying as much as $500 per month for benefits, consumers were essentially uninsured and exposed to limitless medical expenses.  FTC

February 8, 2024

The CFPB has ordered that Consumer First Legal Group, LLC, and attorneys Thomas G. Macey, Jeffrey J. Aleman, Jason Searns, and Harold E. Stafford pay $12 million in consumer redress and penalties for charging millions in advance fees to homeowners seeking foreclosure relief.  The advance fees charged were allegedly for legal representation, but the company and the attorneys failed to provide any.  CFPB

January 10, 2024

National auto title lending company Community Loans of America (CLA) has agreed to pay $2.2 million in restitution and cancel $3.7 million in outstanding debt after an investigation by the Pennsylvania Attorney General’s Office found it subjected Pennsylvanian borrowers to unlawful lending practices and exorbitant interest rates.  Title loans are effectively prohibited in Pennsylvania because they are high-cost loans and lenders typically charge interest rates that are far above the state’s 25% annual interest limit.  CLA still managed to collect money and repossess vehicles from Pennsylvanian consumers by claiming to have offices in the state but redirecting consumers to locations in Delaware.  PA AG

December 26, 2023

A temporary restraining order was issued on December 21 against ArciTerra Companies LLC and its CEO Jonathan M. Larmore, along with Cole Capital Funds LLC, an entity formed by Larmore. Larmore and other charged entities misappropriated more than $35 million from private real estate funds and other investment vehicles to fund his family's lavish lifestyle. In another scheme, Larmore issued a press release from Cole Capital Funds, announcing they were buying 51% of WeWork's minority ownership shares at nine times the current trading price. Not disclosed was that Larmore had purchased more than 72,000 call options in the days prior to the press release. Larmore's intent was to earn a windfall on the options; instead, the press release was delayed so most of the call options expired before he could exercise them. SEC

December 22, 2023

Brooge Energy Limited, former CEO Nicolaas Lammert Paardenkooper, and former Chief Strategy Officer and interim CEO Lina Saheb settled SEC fraud charges for misstating Brooge's revenues from 2018 to 2021 connected to a $500 million securities sale. Brooge fabricated invoices to support the inflated revenues and provided them to auditors to hide the fraud. Brooge will pay a $5 million penalty for violating the antifraud, proxy statement, reporting, and books and records provisions of the federal securities laws. Paardenkooper and Saheb will each pay $100,000 and are subject to permanent officer and director bars. SEC

December 14, 2023

Freepoint Commodities LLC will pay more than $98 million in civil penalties and disgorgement for improperly obtaining and trading on material non-public information. Freepoint paid millions in bribes to government officials in Brazil to obtain highly confidential information related to the purchase and sale of fuel oil. Certain members of Freepoint's oil trading team knew of and took steps to conceal the fraud by using code words, fake names, and private email addresses, all to gain unlawful competitive advantages in oil products trading. DOJ; CFTC

December 13, 2023

Credit Suisse Securities (USA) LLC and two affiliates will pay more than $10 million for providing prohibited underwriting and advising services to mutual funds, in violation of an October 2022 Superior Court of New Jersey consent order. Per the order, Credit Suisse was prohibited from serving as principal underwriter or investment adviser to mutual funds and employees' securities companies; however, Credit Suisse acted in that capacity prior to receiving a time-limited exemption to such prohibitions in June 2023. SEC

November 28, 2023

Bank of America has been ordered to pay $12 million into the CFPB’s victims relief fund for violating the Home Mortgage Disclosure Act, which requires financial institutions to report demographic information about mortgage applicants. For at least four years, hundreds of BoA loan officers falsely reported that applicants failed to answer those questions, when in reality the officers had failed to ask them.  CFPB

November 21, 2023

Rio Tinto plc, Rio Tinto Limited, and Rio Tinto's former CEO Thomas Albanese have agreed to entry of a final judgment, ordering it to pay $28 million and permanently restraining Rio Tinto from violating Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-16 thereunder. The judgment stems from the SEC's 2017 complaint which alleged that Rio Tinto's public filings contained misleading statements about the value of its Mozambican coal assets. Rio Tinto has agreed to retain an independent consultant to review its compliance with accounting standards. Albanese will pay a $50,000 civil penalty and is required to cooperate in the SEC's continuing investigation into Rio Tinto's former CFO Guy Elliott. SEC