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November 1, 2022

Two Florida-based companies and their owners have been ordered to pay more than $24.8 million for violating the state Consumer Protection Act by sending 232,091 deceptive letters to more than 15,000 small business owners in Washington State, resulting in $1.3 million in payments to the fraudsters.  The letters by CA Certificate Service and Labor Poster Compliance appeared to originate from the government and demanded payment for certificates or posters that were implied to be mandatory, but were in fact available free of charge from state and federal agencies.  Although the nationwide fraud scheme resulted in $5.3 million in losses around the country, this is the first judgment against the defendants.  WA AG

October 31, 2022

The SEC has awarded more than $10 million to a whistleblower who provided critical information and assistance that contributed significantly to a successful enforcement action.  In addition to providing important documents, the whistleblower also met twice with agency staff, resulting in charges that closely mirrored the whistleblower’s allegations, as well as significant funds being returned to harmed investors.  SEC

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 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

In order to settle charges of failing to perform proper audits of a company committing fraud, audit firm RSM US LLP has been ordered to pay $3.75 million and retain an independent consultant, while partners Steven Kirn and Richard Condon, and senior audit manager Michael Piqueira have agreed to be suspended for 1-3 years.  Over the four-year period in which RSM audited Revolution Lighting Technologies Inc., RSM allegedly failed to detect that the company was fraudulently inflating revenue with bill and hold sales in violation of accounting principles.  SEC

September 23, 2022

A man in Texas, James Clark Nix, has been sentenced to 48 years in federal prison after being found guilty of defrauding investors of at least $6 million in a Ponzi scheme spanning multiple decades.  Using his position as an accountant, Nix had promised investors—many of them his own friends—high interest returns of up to 10%, leading many to entrust him with their life’s savings.  USAO EDTX

September 22, 2022

The Boeing Company and its former CEO, Dennis A. Muilenburg, have agreed to pay $200 million and $1 million respectively, in order to resolve SEC charges of making materially misleading statements to investors following crashes of two 737 MAX planes in 2018 and 2019.  Despite knowing the MCAS system at fault would be an ongoing safety issue, Boeing and Muilenburg repeatedly assured investors and the public otherwise.  SEC

September 20, 2022

Morgan Stanley Smith Barney LLC (MSSB) has agreed to pay $35 million to the SEC to settle charges of failing to protect the personal identifying information (PII) of some 15 million customers.  Between 2015 to 2020, MSSB failed to properly encrypt PII or properly dispose of devices and servers containing PII.  As a result, decommissioned devices containing unencrypted PII were resold by a third party via an internet auction site, and 42 decommissioned servers containing unencrypted PII went missing entirely.  SEC

September 19, 2022

Sparkster Ltd. and its CEO, Sajjad Daya, have agreed to pay $30 million to settle charges of offering and selling crypto asset securities called SPRK tokens that were not registered with the SEC and were not eligible for a registration exemption.  A crypto influencer, Ian Balina, was separately charged in federal court for promoting SPRK tokens on social media without disclosing that he received a 30% bonus on tokens he purchased in exchange for his posts, and for selling the tokens to an investing pool of around 50 individuals.  SEC
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