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November 22, 2021

Seven financial institutions – Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, NatWest Markets Securities Inc., and Washington Mutual Mortgage Securities Corp. – have agreed to collectively pay $32.5 million to resolve claims by New Mexico that the banks did not adequately disclose the characteristics of certain mortgage-backed securities sold to New Mexico pension funds and a state-run investment council between 2003 and 2010.  The settlement resolves a qui tam action under the New Mexico Fraud Against Taxpayers Act brought by Integra REC, LLCNM

October 19, 2021

JPay, a financial services company which, among other services, provides debit cards to prisoners to meet their essential needs as they are released from incarceration, will pay $6 million – $4 million in restitution and $2 million as a civil penalty – to resolve allegations that they violated the Consumer Financial Protection Act and Electronic Fund Transfer Act by charging consumers unlawful fees.  As part of the settlement, JPay is also limited in fees it can impose on release cards going forward.  CFPB

October 15, 2021

iFinex Inc. and related entities doing business as cryptocurrency trading platform Bitfinex, agreed to pay $1.5 million to resolve charges that they operated as an unregistered futures commission merchant (FCM) and engaged in illegal, off-exchange retail commodity transactions in digital assets with U.S. persons that were not eligible contract participants (ECPs).  The CFTC found that Bitfinex allowed margin trading financed through a peer-to-peer funding program through which Bitfinex customers who held fiat or cryptocurrency in their Bitfinex account would “lend” those funds to other Bitfinex customers who would then use those funds to buy, sell, and trade on the Bitfinex platform, in violation of a 2016 CFTC orderCFTC

September 27, 2021

Citibank, N.A. and Citigroup Global Markets Limited, which are provisionally registered swap dealers, will pay a $1 million civil penalty to resolve allegations that they failed to properly report Legal Entity Identifier information to a swap data repository as required by applicable regulations.  In addition, Citi was found to have supervisory failures and to be out of compliance with a prior 2017 order on related matters.  CFTC

September 17, 2021

RBC Capital Markets LLC will pay $800,000 to resolve charges that it improperly allocated bonds intended for institutional customers and dealers to “flippers,” who then resold the bonds to other broker-dealers at a profit, despite customer instructions to place retail customer orders first.  RBC employees Kenneth G. Friedrich, who was the head of Municipal Sales, Trading and Syndication, and Jaime L. Durando, the head of RBC's municipal syndicate desk, also settled charges and agreed to penalties of $30,000 and $25,000 respectively.  SEC

September 13, 2021

GTV Media Group Inc., Saraca Media Group Inc., and Voice of Guo Media Inc. will collectively pay more than $539 million to resolve SEC claims related to their alleged unregistered offering of GTV common stock and a digital asset security referred to as G-Coins or G-Dollars.  The SEC found that the respondents publicized the two offerings on their websites and social media platforms, raising approximately $487 million from more than 5,000 investors.  No registration statements were filed, and no registration exemption applied.  Without admitting or denying the SEC’s findings, respondents agreed to pay disgorgement of $486 million plus interest, and penalties totaling $35 million.  SEC

August 30, 2021

KMS Financial Services Inc. will pay $200,000 to resolve SEC charges that the investment advisor and broker-dealer violated Regulation S-P regarding the safeguarding of customer records and information. The SEC alleged that between September 2018 and December 2019, email accounts of KMS personnel were taken over by unauthorized third parties, resulting in the exposure of personally identifying information of nearly 5,000 KMS customers and clients.  The SEC found that KMS failed to adopt written policies and procedures requiring additional firm-wide security measures until May 2020, and did not fully implement those additional security measures firm-wide until August 2020, placing additional customer and client records and information at risk.  SEC

August 30, 2021

Cambridge Investment Research Inc. and related entities will pay $250,000 to resolve SEC charges that the investment advisor and broker-dealer violated Regulation S-P regarding the safeguarding of customer records and information. The SEC alleged that between January 2018 and June 2021, email accounts of Cambridge personnel were taken over by unauthorized third parties, resulting in the exposure or potential exposure of personally identifying information of approximately 5,000 Cambridge customers and clients.  The SEC found that Cambridge discovered the first email account takeover in January 2018, but failed to adopt and implement firm-wide enhanced security measures for cloud-based email accounts until 2021, resulting in the exposure and potential exposure of additional customer and client records and information.  SEC

August 30, 2021

Cetera Advisor Networks LLC and related entities will pay $300,000 to resolve SEC charges that the investment advisor and broker-dealer violated Regulation S-P regarding the safeguarding of customer records and information and provision of breach notification to customers. The SEC alleged that between November 2017 and June 2020, email accounts of Cetera personnel were taken over by unauthorized third parties, resulting in the exposure of personally identifying information of more than 4,000 Cetera customers and clients.  The accounts were not protected with multi-factor authentication, even though Cetera’s policies required MFA.  SEC

August 25, 2021

Default judgment was entered against Silver Star FX, LLC d/b/a Silver Star Live, Silver Star Live Software LLC, and David Wayne Mayer based on findings that, acting as unregistered commodity trading advisors, they fraudulently solicited customers to open discretionary foreign exchange trading accounts that would purportedly use an automated trading software developed by Mayer.  Defendants misrepresented Mayer's qualifications and trading experience, as well as the trading system's performance history and expected profits.  Defendants were ordered to pay $3.9 million in restitution and $11.7 million in civil monetary penalties.  CFTC
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