Archive

March 1, 2016

Olympus Corp. of America, the country’s largest distributor of endoscopes and related equipment, agreed to pay $623.2 million to resolve alleged violations of the False Claims Act and Anti-Kickback Statute through a scheme to pay kickbacks to doctors and hospitals.  It is the largest payout ever by a medical device company for violations of the Anti-Kickback Statute.  In addition, Olympus subsidiary Olympus Latin America Inc. also agreed to pay $22.8 million to resolve separate charges relating to violations of the Foreign Corrupt Practices Act.  The allegations originated in a whistleblower lawsuit filed by John Slowik, Olympus’ former chief compliance officer, under the qui tam provisions of the federal and various state False Claims Acts.  He will receive a whistleblower award of roughly $51 million from the proceeds of the government’s recovery.  Whistleblower Insider

March 1, 2016

March 1, 2016 – Telecommunications company Qualcomm Inc. will pay $7.5 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) by hiring relatives of Chinese government officials involved with the decision of whether to purchase Qualcomm’s mobile technology products.  An SEC investigation also found Qualcomm provided gifts, travel, and entertainment to officials at government-owned telecom companies in China in an attempt to influence their purchasing decisions.  SEC

February 18, 2016

February 18, 2016 – Telecommunications provider VimpelCom Ltd. will pay $795 million in a global settlement with the SEC, DOJ, and Dutch regulators to resolve allegations that it violated the Foreign Corrupt Practices Act (FCPA) in connection with its business in Uzbekistan.  The SEC alleges that Vimpelcom offered and paid bribes to an Uzbek government official related to the President of Uzbekistan, as the company entered the Uzbek market and sought government-issued licenses, frequencies, channels, and number blocks.  At least $114 million in bribe payments were funneled through an entity affiliated with the Uzbek official.  The SEC’s press release announcing the settlement described VimpelCom’s revenues in Uzbekistan as a result of the improper payments as “massive.”  VimpelCom will pay $167.5 million to the SEC, $230.1 million to the DOJ, and $397.5 million to Dutch regulators.  SEC

February 17, 2016

February 17, 2016 – Former Deutsche Bank research analyst Charles Grom will pay $100,000 and be suspended from the security industry for one year, to settle SEC charges that he certified the rating on a stock that was inconsistent with his personal view.  An SEC investigation found that Grom certified that his March 29, 2012 report about discount retailer Big Lots accurately reflected his own beliefs about the company and its securities.  But in private communications with Deutsche Bank research and sales personnel, Grom indicated that he did not downgrade Big Lots from a “buy” recommendation because he wanted to maintain his relationship with Big Lots management.  SEC

February 16, 2016

February 16, 2016 – Massachusetts-based technology company PTC Inc. and its Chinese subsidiaries will pay more than $28 million to settle civil and criminal actions involving violations of the Foreign Corrupt Practices Act (FCPA).  An SEC investigation found that two Chinese subsidiaries of PTC provided non-business related travel and other improper payments to various Chinese government officials in an effort to win business.  Specifically, the SEC’s order found that from 2006 to 2011, PTC’s subsidiaries provided improper travel, gifts, and entertainment totaling nearly $1.5 million to Chinese government officials.  PTC gained nearly $11.8 million in profits from contracts with state-owned entities whose officials received the improper payments.  PTC will pay about $13.6 million to settle the SEC’s charges and its Chinese subsidiaries will pay $14.54 million in a non-prosecution agreement with the DOJ.  The SEC also announced its first deferred prosecution agreement with an individual in an FCPA case.  The SEC agreed to defer for three years, FCPA charges against Yu Kai Yuan, a former employee of one of PTC’s Chinese subsidiaries, based on his significant cooperation with the SEC’s investigation.  SEC

February 11, 2016

February 11, 2016 – The SEC charged unregistered broker Gregory Ruehle with fraudulently selling purported stock in medical device company ICB International while pocketing investors’ money and using it to pay gambling debts.  The SEC alleges that Ruehle raised approximately $1.9 million from over 100 investors by claiming that he would sell them his personally-owned securities in ICB International.  However, Ruehle sold far more shares than he in fact owned, owned shares that were non-transferable, and fabricated documents purportedly transferring the shares.  In a parallel action, the U.S. Attorney’s Office for the Southern District of California announced criminal charges against Ruehle.  SEC

February 25, 2016

Gary Patton Hall Jr., former president and CEO of Georgia-based Tifton Banking Company, was sentenced to 84 months in prison and to pay $3,931,018 in restitution for his role in a conspiracy to commit bank fraud.  Hall admitted he engaged in a scheme to mislead the bank and its loan committee about loans TBC made to local individuals and businesses.  Hall hid past-due loans from the Federal Deposit Insurance Corporation (FDIC) and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking.  Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.  In November 2010, the Georgia Department of Banking and Finance closed TBC because of its poor financial condition.  DOJ

February 23, 2016

Las Vegas resident Joseph Micelli was sentenced to 60 months in prison and to pay $5.65 million in restitution and to forfeit $505,220 in fraudulent proceeds for his role in an investment fraud scheme that promoted fraudulent investment opportunities and caused more than $5 million in losses to investors.  Micelli admitted he conspired with others in the U.S. and Switzerland to promote investments and loan instruments he knew to be fraudulent.  They did so through a Swiss company known as the Malom Group A.G.  Micelli further admitted he held himself out to investors as an attorney, when in fact he had lost his license to practice law.  DOJ

February 24, 2016

New York, together with 21 other states, announced multimillion dollar settlements with Natixis Funding Corp. and Societe Generale for fraudulent and anticompetitive conduct in municipal bond derivative transactions with state and local government entities and nonprofits across the country. Natixis and Societe Generale will pay $29,950,000 and $26,750,000 respectively as part of a coordinated 22-state and private class settlement. Pursuant to the settlements, $53,865,000 will be paid into a Settlement Fund and largely applied to restitution for municipalities, counties, government agencies, school districts and nonprofits that the states allege were harmed when they entered into municipal derivatives contracts with Natixis or Societe Generale. NY, NJ, FL

February 24, 2016

The CFTC filed charges against Florida resident Neil Pecker and his company, Vision Financial Partners, LLC, alleging they engaged in fraud in connection with off-exchange binary options and registration violations.  The CFTC complaint alleges that the defendants solicited almost $3 million from over 120 clients in the U.S. and Canada while misappropriating almost $2 million of the funds for their personal use.  CFTC