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Page 18 of 78

August 29, 2019

Technology company Juniper Networks, Inc., will pay $11.7 million to resolve alleged FCPA violations in its Russian and Chinese subsidiaries.  The company allegedly provided entertainment to customers including government officials, recording the expenses in off-book accounts or misrepresenting the nature of the meetings.  The SEC order also found that Juniper violated internal accounting controls and recordkeeping provisions.  SEC

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

August 20, 2019

The founder of Mantria Corporation, Troy Wragg, has been sentenced to 22 years in prison and ordered to pay $54 million in restitution for his role in a multi-million dollar Ponzi scheme.  Together with co-defendants Wayde McKelvy and Amanda Knorr, Wragg convinced investors across the country that they stood to gain returns of 50% or higher on their investments through Mantria, even coaching investors to take out loans so they could invest more in the company.  While awaiting sentencing for the Mantria fraud, Wragg committed a second fraud, causing an investor to lose her entire investment.  USAO EDPA; See 2021 sentencing of McKelvy

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Ponzi Schemes, Securities Fraud,

August 16, 2019

In a consent judgment, Hani Zeini, formerly the CEO of California-based silicone breast implant company Sientra, Inc., has been ordered to pay a $160,000 civil penalty to settle charges that he concealed damaging news in advance of a $60 million stock offering by the company in 2015.  Specifically, as the offering was preparing to close, Zeini learned that the Brazilian company that was Sientra's sole source for implants had lost a regulatory approval, but concealed that information from the underwriter and the company's general counsel.  When the news became public the day after the offering closed, Sientra's stock price fell over 50%.  SEC

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

July 24, 2019

Facebook Inc. has agreed to pay a $100 million SEC penalty to resolve charges that its public disclosures omitted material information about a third party's misuse of Facebook user data.  Facebook's disclosures presented the risk of misuse of user data as hypothetical when Facebook knew in 2015 that, in fact, Cambridge Analytica and a researcher had collected and transferred data on approximately 30 million Americans.  Furthermore, when media investigations of Cambridge Analytical began, Facebook misleadingly stated that it had discovered no evidence of wrongdoing by Cambridge Analytica.  SEC

Tagged in: Cybersecurity and Data Breaches, Financial and Investment Fraud, Misrepresentations, Securities Fraud,

July 18, 2019

Swapnil Rege, who worked as a portfolio manager for a hedge fund that operated as a commodity pool operator, was been ordered by the CFTC  and SEC to pay a $100,000 civil penalty and disgorge a $600,000 performance bonus he received as a result of his fraudulent mismarking the valuations of interest rate swaps.  The mismarking, accomplished through various means, artifically inflated the profitability of his trades, earning him a larger performance bonus.  SEC, CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Market Manipulation and Trading Violations, Misrepresentations, Securities Fraud,

July 18, 2018

After being charged in March 2018, former Equifax executive Jun Ying has agreed to pay disgorgement and prejudgment interest totaling $125,636 to resolve charges that he engaged in insider trading ahead of exposure of Equifax's data breach. Ying's payment obligation will be offset by the $117,117 forfeiture that he has already paid in the parallel criminal case.  SEC

Tagged in: Insider Trading, Securities Fraud,

July 16, 2019

AR Capital LLC, together with its founder Nicholas Schorsch and its former CFO Brian Block, have agreed to pay $39 million in disgorgement and interest, as well as penalties totaling $21.75 million, to resolve allegations that they wrongfully inflated incentive fees and took unsupported charges in two separate mergers involving the publicly-traded REIT American Realty Capital Properties, Inc. that AR Capital sponsored and managed.  Defendants allegedly failed to properly disclose their compensation to shareholders.  SEC

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

July 15, 2019

Nomura Securities, Inc. agreed to provide $25 million to reimburse customers that purchased mortgage-backed securities from Nomura.  The SEC orders find that Nomura traders made false and misleading statements to customers, including about the price at which Nomura bought securities, the amount of profit Nomura would receive on the potential trade, and the current owner of the security.  The SEC furhter alleged that Nomura failed to reasonably supervise its traders.  Nomura, which cooperated in the investigation, will also pay $1.5 million in penalties.  Two individual traders were previously charged by the SEC.  SEC

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

June 19, 2019

The former CEO of Quintillion, a telecommunications company in Alaska, has been sentenced to 5 years in prison and ordered to forfeit $896,698 for defrauding investors of more than $270 million.  In order to secure funding to build a high-speed fiber optic cable system, Elizabeth Pierce had presented two New York investment companies with contracts that made it appear as if Quintillion was guaranteed revenue of nearly $1 billion.  Unbeknownst to investors and her own staff, however, the contracts were allegedly forged and the actual contracts she’d negotiated would generate only a fraction of that amount.  Quintillion eventually reported her to the DOJ.  USAO SDNY

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

June 17, 2019

Audit and accounting firm KPMG LLP will pay a $50 million SEC penalty to resolve charges that the firm revised its audit workpapers in an effort to improve KPMG’s performance in PCAOB inspections planned for the audits in question after wrongfuly obtaining PCAOB lists of inspection targets.  The SEC also found that numerous KPMG audit professionals cheated on internal training exams.  In addition to the penalty, KPMG agreed to undertake specified compliance measures, including the retention of an independent consultant.  Former KPMG officials face individual criminal charges.  SEC

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

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