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June 24, 2021

Gateway One Lending & Finance, LLC, which originates, securitizes, and services auto loans, agreed to pay $6.5 million in disgorgement, prejudgment interest, and civil penalties to resolve charges that it understated the historic losses of its auto loans and overstated the projected future performance for six auto loan-backed securitizations.  SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Securities Fraud,

June 22, 2021

Loci Inc., whose InnVenn platform provides intellectual property search services for inventors and others users, will pay $7.6 million to resolve SEC charges arising from its unregistered initial coin offering of "LOCIcoins."  In the course of the ICO, Loci and its CEO John Wise allegedly misrepresented the company’s revenues, number of employees, and InnVenn’s user base. SEC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Misrepresentations, Regulatory Violations, Securities Fraud,

June 2, 2021

The SEC awarded $23 million to two individuals who voluntarily provided information as whistleblowers that led to recoveries by the SEC and another federal agency in related enforcement actions. Information provided by the first whistleblower, who received approximately $13 million, initiated the investigations.  The second whistleblower, who waited several years before coming forward, provided additional information that substantially contributed, and was awarded approximately $10 million.  Both provided ongoing assistance to the Commission and the other agency, providing documents, participating in interviews, and identifying key individuals and systems involved in the investigations.  SEC

Tagged in: Financial and Investment Fraud, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,

May 28, 2021

Eric Pulier, who previously served as an executive at ServiceMesh, Inc., which later merged with Computer Sciences Corporation (CSC), entered into a consent judgment for $4.8 million in disgorgement, civil penalties, and interest.  The judgment resolved an SEC action alleging that Pulier paid more than $2 million in bribes to executives at the Commonwealth Bank of Australia to secure business for CSC.  Securing the Australia business entitled ServiceMesh to a $98 million earn-out payment from the CSC acquisition, and Pulier was personally entitled to $30 million of that earn-out.  SEC

Tagged in: Bribery and Bid-Rigging, Financial and Investment Fraud, Securities Fraud,

May 4, 2021

DaRayl Davis, who owned and operated Financial Assurance Corp. and Affluent Advisory Group LLC, has been sentenced to 13 years in prison and ordered to pay restitution of $7.1 million on charges arising from his sale of fictitious financial products to investors with false promises that the investors would receive fixed annual interest payments and guaranteed protection against losses.  In fact, Davis diverted investor funds to his personal use.  USAO ND IL; SEC

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations, Securities Fraud,

May 3, 2021

Sporting goods manufacturer Under Armour Inc. agreed to pay $9 million to resolve SEC allegations that the company engaged in  accounting fraud.  The SEC alleged that in an effort to meet analyst sales forecasts, Under Armour began to "pull forward" revenue by recognizing as current revenue orders that customers had placed for delivery in future quarters, and did not disclose this practice to investors.  SEC

Tagged in: Accounting Fraud, Financial and Investment Fraud, Securities Fraud,

April 23, 2021

The SEC has granted awards totaling more than $3 million to two whistleblowers whose information led to two separate enforcement actions.  The first whistleblower was awarded approximately $3.2 million for helping to conserve agency resources by identifying key issues to focus on and providing subject matter expertise.  The second whistleblower was awarded more than $100,000 for significant information and ongoing assistance that helped stop an ongoing fraud.  SEC

Tagged in: Anonymity, Financial and Investment Fraud, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,

April 15, 2021

The SEC has awarded two whistleblowers a joint award of over $50 million for providing information, voluminous documents, and substantial assistance that led to the return of tens of millions of dollars to harmed investors.  According to the SEC, the fraud scheme at issue involved highly complex transactions that would have been difficult for the agency to detect.  SEC

Tagged in: Anonymity, Financial and Investment Fraud, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,

March 29, 2021

The SEC has awarded an anonymous whistleblower $500,000 based on recoveries in a covered action and a related action that resulted in the shut-down of an ongoing fraudulent scheme. The whistleblower first reported the alleged misconduct to their employer, using the employer’s internal compliance procedures.  Then, within 120 days of reporting the violations internally, the whistleblower submitted a TCR to the SEC.  According to the SEC, the whistleblower provided significant information that prompted it to open an investigation, and provided ongoing assistance to Commission staff.  Separately, the employer began an internal investigation and ultimately made a report to a government agency.  Because the whistleblower reported internally and to the SEC within 120 days of their internal report, the SEC applied its “safe harbor” rule and treated the whistleblower’s SEC submission as if it had been made on the day that the whistleblower reported internally.  SEC

Tagged in: Financial and Investment Fraud, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Case, Whistleblower Rewards,

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