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February 23, 2016

The CFPB filed two orders against Citibank relating to the bank’s illegal debt sales and debt collection practices.  The bureau ordered Citibank to provide nearly $5 million in consumer relief and pay a $3 million penalty for selling credit card debt with inflated interest rates and failing to forward consumer payments promptly to debt buyers.  Separately, the CFPB ordered Citibank to comply with a court order requiring the bank to refund $11 million to consumers and forgo collecting an additional $34 million for filing altered affidavits in debt collection litigations.   CFPB

February 22, 2016

The CFTC sued North American Asset Management, LLC of Fort Lauderdale, Florida; its owner and president Alexi Bethel of Miami, Florida; and its owner and managing director Steven Labadie of Lake Worth, Florida. The CFTC complaint charges the defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis.  CFTC

February 18, 2016

Amsterdam-based telecommunications company VimpelCom Limited and its wholly owned Uzbek subsidiary, Unitel LLC, agreed to pay roughly $795 million under settlements with the DOJ, SEC and the Public Prosecution Service of the Netherlands to settle charges of violating the anti-bribery provisions of the Foreign Corrupt Practices Act.  Specifically, the companies admitted making more than $114 million in bribery payments to a government official in Uzbekistan to enable them to enter and continue operating in the Uzbek telecommunications market.  It is one of the largest global FCPA settlements ever and the largest case to date brought under the DOJ's Kleptocracy Asset Recovery Initiative.  Whistleblower Insider

February 16, 2016

Two subsidiaries of Massachusetts software company PTC Inc. agreed to pay a $14.54 million penalty to resolve charges of violating the Foreign Corrupt Practices Act by improperly providing recreational travel to Chinese government officials.  According to company admissions, Parametric Technology (Shanghai) Software Company Ltd. and Parametric Technology (Hong Kong) Ltd., through local business partners, arranged and paid for employees of various Chinese state-owned enterprises to travel to the U.S., ostensibly for training at PTC Inc.’s headquarters, but primarily for recreational travel to other parts of the country, including New York, Los Angeles, Las Vegas and Hawaii.  PTC paid more than $1 million through its business partners to fund these trips, while during the same time period, it entered into more than $13 million in contracts with the Chinese state-owned entities.  PTC settled related charges with the SEC by agreeing to pay $11,858,000 in disgorgement plus $1.764 million in prejudgment interest, bringing the company's total government payout to $28 million.  DOJ

February 19, 2016

The CFTC filed a civil enforcement action against Ryan S. Magee of Calgary, Alberta, Canada, with fraud and also with acting as a Commodity Pool Operator, without being registered with the CFTC, as required.  The CFTC complaint also charged Ryan Magee’s father and wife, David W. Magee and Dalyne Rae Magee, also both Calgary residents, with acting as Associated Persons of Ryan Magee, without being registered with the CFTC, as required.  CFTC

February 16, 2016

New York announced the conviction and sentencing of Frederick E. Monroe, Jr., 59, of Queensbury, New York, for stealing over $5 million from investors by fraudulently soliciting them to reinvest their retirement monies. In December 2015, Monroe pleaded guilty in Albany County Court to Scheme to Defraud, Grand Larceny, Money Laundering and Securities Fraud for luring clients with whom he had established relationships with over his 20-year career as a financial planner, and then diverting their monies for his own personal use, as well as to pay back earlier investors he had defrauded. NY

February 11, 2016

Morgan Stanley agreed to pay a $2.6 billion penalty “for misleading investors about the subprime mortgage loans underlying the securities it sold” in the period leading up to the financial crisis.  As part of the agreement, Morgan Stanley admitted that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its residential mortgage-backed securities (RMBS) which ultimately caused investors, including federally insured financial institutions, to lose billions of dollars from investing in Morgan Stanley in the 2006-07 timeframe.  The $2.6 billion civil penalty resolves claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  In addition, the states of New York and Illinois announced their own settlements with Morgan Stanley for $550 million and $22.5 million, respectively.  When combined with prior settlements with other regulators -- $225 million to the National Credit Union Administration; $1.25 billion to the Federal Housing Finance Agency; $86.95 million to the Federal Deposit Insurance Corporation; and $275 million to the SEC -- this brings to almost $5 billion the total payout by Morgan Stanley in connection with its fraudulent sales of RMBS.  Whistleblower Insider

February 11, 2016

New York, in conjunction with members of a state and federal working group announced a $3.2 billion settlement with Morgan Stanley over the bank’s deceptive practices leading up to the financial crisis. The settlement includes $550 million – $400 million worth of consumer relief and $150 million in cash – that will be allocated to New York State. The resolution requires Morgan Stanley to provide significant community-level relief to New Yorkers, including loan reductions to help residents avoid foreclosure, and funds to spur the construction of more affordable housing. Additional resources will be dedicated to helping communities transform their code enforcement systems, invest in land banks, and purchase distressed properties to keep them out of the hands of predatory investors. NY

February 5, 2016

HSBC Bank USA agreed to pay $470 million settle charges of mortgage origination, servicing and foreclosure abuses.  According to the government, "the agreement is part of our ongoing effort to address root causes of the financial crisis."  The settlement parallels the $25 billion National Mortgage Settlement reached in February 2012 between the federal government, 49 state attorneys general and the District of Columbia’s attorney general and the five largest national mortgage servicers, as well as the $968 million settlement reached in June 2014 between those same federal and state partners and SunTrust Mortgage.  DOJ

February 9, 2015

St. Louis-based agribusiness Monsanto Company will pay an $80 million penalty to settle charges that it violated accounting rules and misstated company earnings with respect to its flagship product Roundup.  In addition, three accounting and sales executives will pay $135,000 collectively to settle charges against them.  An SEC investigation found that Monsanto had insufficient internal controls to properly account for millions of dollars in rebates offered to retailers and distributors of Roundup after generic competition had undercut Monsanto’s prices and resulted in a significant loss of market share for the company.  Monsanto booked substantial revenue resulting from sales incentivized by the rebate programs but failed to recognize all of the related program costs at the same time.  Therefore, Monsanto materially misstated its consolidated earnings in corporate filings during a three-year period.   Monsanto’s CEO and former CFO reimbursed the company $3,165,852 and $728,843 respectively, for cash bonuses and certain stock awards received during the period when the company committed the accounting violations.  SEC
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