It was an active year for fraud enforcement at the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC). Though by no means was it a record year for either regulator in terms of big-ticket wins. Aside from the CFTC's $1.7 billion recovery from South African crypto company Mirror Trading for foul play with foreign currency transactions, the balance of the Top-10 recoveries was...
This week's Department of Justice (DOJ) Catch of the Week goes to King Kong Tools GmbH & Co KG. On Wednesday (November 29), the German-based supplier of recycling, forestry, construction, and agricultural equipment, along with its American subsidiary, agreed to pay $1.9 million to settle DOJ charges of violating the False Claims Act through customs fraud. More specifically, the government alleged King Kong...
3M to Pay $6.5 Million for Foreign Bribery Charges
Posted 08/29/23
On Friday (August 25), the Securities and Exchange Commission (SEC) announced that Minnesota-based global manufacturer 3M Company agreed to pay $6.5 million to settle SEC charges of violating the Foreign Corrupt Practices Act (FCPA). According to the SEC Order finalizing the settlement, the SEC found that employees of 3M's wholly-owned Chinese subsidiary provided improper consideration to Chinese officials of...
Safeguard Metals LLC and its principal, Jeffrey Santulan a/k/a Jeffrey Hill were hit with multiple enforcement actions this week, alleging fraud in their sale of securities and commodities to investors they targeted to sell their existing securities and invest the proceeds into gold and silver coins. The CFTC and 27 state security regulatory agencies jointly filed one action, and the SEC filed its own action. Both...
As we recently detailed, 2021 proved to be a blockbuster year for whistleblowers under the CFTC and SEC Whistleblower Programs. Seven of the ten largest whistleblower awards of 2021 were made to SEC and CFTC whistleblowers, including a massive $200 million CFTC award that was roughly twice as large as all prior CFTC awards combined. In total, the SEC paid more awards—both in total dollars and individual...
Akazoo Settlement with SEC Offers Lessons on Risks and Enforcement in SPAC Transactions
Posted 10/28/21
The Securities and Exchange Commission this week secured court approval of a $38.8 million settlement with music streaming business Akazoo S.A. – or, as the SEC pointedly describes the company, “a purported music streaming business,” because the company that publicly claimed to have millions of paying customers, in fact, had none. The settlement marks the second public announcement of an SEC recovery in an...
Whistleblower Reveals Facebook’s Lies: Will the SEC or Congress Act to Curtail Threats to Democracy and Teens from Social Media?
Posted 10/1/21
For anyone who cares about the future of liberal democracy, improving the mental health and well-being of children, ending the COVID-19 pandemic, or stopping drug cartels and human trafficking, the recent series in The Wall Street Journal titled “The Facebook Files” is a must-read. Based on a trove of internal documents shared by a Facebook whistleblower, as well as interviews with numerous current and former...
DOJ Lowers The Boom On COVID-19 Healthcare Scams, Again
Posted 05/28/21
Hey, fraudsters, did you hear? There was a global pandemic, so the government pumped trillions of dollars into the economy. Probably a good time to get a piece of the cut, you ask? They’ll never find out, right? So many ways to grift!
Well, not so much. From the start, the cops on the beat, led by the United States Department of Justice, have screamed from the rooftops: “Don’t do it. We WILL...
COVID Fraud a Year on from the Onset of the Pandemic
Posted 02/19/21
The COVID-19 pandemic has raged across the world over the last year, causing widespread harm both to humanity and the economy. Even in these trying times, fraudsters have not let up and have found ways to exploit the pandemic for personal gain. As we move into the one-year anniversary of the pandemic starting with the United States we look back on the ways programs intended for relief have been exploited, and a few of...
COVID Frauds of the Week: PPP, Puppies, and Securities Fraud
Posted 12/11/20
As COVID-19 cases continue to rise across the country, the government has remained vigilant in rooting out fraudsters who seek to capitalize on the crisis to line their own pockets. Over the past week, federal prosecutors have advanced cases against multiple individuals who fraudulently obtained government funds that were supposed to help struggling small businesses. And in another colorful case, DOJ busted a...