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June 26, 2020

Telegram Group Inc. and its subsidiary TON Issuer Inc. will return more than $1.2 billion to investors and pay a $18.5 million civil penalty to resolve SEC charges that it conducted an unlawful unregistered offering of its digital tokens called “Grams.” The SEC alleged that the Grams were securities sold by defendants in order to raise capital to finance for their own business, which included the development of their own blockchain and a mobile messenger application.  SEC

June 24, 2020

SG Americas Securities LLC has agreed to pay $1.55 million to the SEC and $1.55 million to FINRA, for a total monetary penalty of $3.1 million, to resolve charges of failing to provide complete and accurate securities trading information, also known as “blue sheet data.”  The SEC had found that because of inadequate internal processes, SG Americas failed to catch these coding errors, causing them to submit missing or incorrect data for about $27.6 million transactions.  SEC

May 19, 2020

Payment processing company First Data Merchant Services, LLC will pay $40.2 million to resolve FTC charges that it laundered, or assisted laundering of, credit card transactions for scams facilitated by Chi “Vincent” Ko and his company First Pay Solutions LLC, which operated as an independent sales agent for First Data.  Ko allegedly opened hundreds of merchant accounts to process payments for scams that targeted hundreds of thousands of consumers, and First Data knowingly processed payments for those scams.  FTC

May 19, 2020

The country’s largest subprime auto financing company, Santander Consumer USA Inc, has agreed to pay over $550 million to resolve allegations of violating consumer protection laws by knowingly placing consumers in auto loans that the company expected would default at a rate of over 70%.  Under the settlement, affected consumers in 34 states who defaulted on loans between 2010 and 2019 will receive restitution.  Additionally, Santander has agreed to various relief efforts, including transferring titles and waiving balances for consumers who defaulted on loans and had not had their cars repossessed yet, waiving balances or debt still owed even on cars already repossessed, and helping to repair consumer credit scores.  CA AG; NY AG; VA AG

May 15, 2020

Credit rating agency Morningstar will pay $3.5 million to settle charges that it violated conflict of interest rules by having credit rating analysts in its asset-backed securities group engage in marketing to issuers, including offering to provide indicative ratings.  SEC rules prohibit rating agencies from issuing or maintaining a credit rating where an analyst who participates in determining or monitoring credit ratings also participates in sales and marketing activity, and require agencies to have policies to address conflicts of interest.  SEC

April 30, 2020

Entities of Israeli banking conglomerate Bank Hapoalim have pleaded guilty and entered into civil settlements for their role in a money laundering scheme for bribes made to soccer officials with Fédération Internationale de Football Association (FIFA) and others in exchange for preferences including in the award of soccer match broadcasting rights.  As part of three-year non-prosecution agreement, the bank will forfeit $20.73 million, pay a fine of $9.33 million, and undertake specified remedial and compliance efforts. The bank simultaneously entered into a separate settlement regarding tax evasion.  DOJ; USAO EDNY

April 29, 2020

Lender Guaranteed Rate, Inc. will pay $15.1 million to resolve allegations that it knowingly failed to adhere to material program requirements in originating and underwriting mortgages insured by FHA or guaranteed by the VA, resulting in mortgages that did not meet credit and underwriting requirements for the government-sponsored guarantees and insurance.  The case was initiated by a whistleblower complaint filed under the False Claims Act by an unnamed former Guaranteed Rate employee, who will receive $2.4 million of the settlement proceeds.  The settlement also resolved claims under FIRREA.  DOJ; USAO NDNY

April 6, 2020

Cantor Fitzgerald & Co. has agreed to pay $3.2 million to settle charges of willfully providing the SEC with incomplete and inaccurate securities trading information, also known as “blue sheet data,” for approximately 35 million transactions, over the course of five years.  Because the SEC uses that information to investigate insider trading and other fraudulent activity, Cantor Fitzgerald’s actions prevented the SEC from carrying out its duty to protect investors.  Cantor Fitzgerald has since retained an outside consultant and adopted new policies and procedures relating to the proper submission of blue sheet data.  SEC

February 27, 2020

Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network will pay a $35 million penalty to resolve charges that certain of Wells Fargo's investment advisors and registered representatives made unsuitable recommendations to retail clients regarding single-inverse ETF products.  The SEC charged that Wells Fargo lacked policies and procedures that would have detected such unsuitable recommendations, and failed to adequately supervise and train its financial professionals, who did not fully understand the products they were recommending.  Wells Fargo did not admit or deny the SEC's findings; the penalty will be distributed to harmed individuals.  SEC

February 21, 2020

Husam Tayeh of Illinois and his Nevada corporations, Dinar Corps., Inc. and My Monex, Inc., have agreed to pay the CFTC more than $22.6 million in disgorgement and civil monetary penalties after being found liable for violations of the Commodity Exchange Act arising from defendants’ alleged registration violations, misappropriation of investor funds, and fraudulent solicitation of customers to engage in financed retail forex transactions involving Iraqi Dinar and Vietnamese Dong.  To settle a related criminal action, Tayeh has been sentenced to 1 year in prison, ordered to forfeit more than $8 million, and ordered to pay more than $150,000 in restitution to victims.  CFTC
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