Archive

February 21, 2014

The SEC charged Zurich-based Credit Suisse Group AG for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC.  Credit Suisse agreed to pay $196M and admit wrongdoing to settle the SEC’s charges.  SEC

January 29, 2014

The SEC charged St. Louis-based Scottrade with failing to provide the agency with complete and accurate information about trades done by the firm and its customers, which is commonly called “blue sheet” data.  The company agreed to settle the charges by paying a $2.5M penalty and admitting it violated the recordkeeping provisions of the federal securities laws.  SEC

January 27, 2014

The SEC sanctioned California-based investment adviser Western Asset Management Company, a subsidiary of Legg Mason,  for concealing investor losses that resulted from a coding error and engaging in cross trading that favored some clients over others.  The company agreed to pay more than $21M to settle the SEC’s charges as well as a related matter by the DOJ. SEC

January 24, 2014

The SEC charged public accounting firm KPMG with violating rules that require auditors to remain independent from the public companies they’re auditing to ensure they maintain their objectivity and impartiality.   An SEC investigation found that KPMG broke auditor independence rules by providing prohibited non-audit services such as bookkeeping and expert services to affiliates of companies whose books they were auditing.  Some KPMG personnel also owned stock in companies or affiliates of companies that were KPMG audit clients.  KPMG agreed to pay $8.2M to settle the SEC’s charges.  SEC

January 9, 2014

The SEC charged San Francisco-based snack foods company Diamond Foods and its former CFO in an accounting scheme to falsify walnut costs in order to boost earnings and meet estimates by stock analysts.  Diamond Foods agreed to pay $5M to settle the SEC’s charges.  SEC

January 9, 2014

The SEC charged global aluminum producer Alcoa Inc. with violating the Foreign Corrupt Practices Act (FCPA) when its subsidiaries repeatedly paid bribes, collectively valued at more than $110M,  to government officials in Bahrain to maintain a key source of business.  Alcoa agreed to settle the SEC’s charges and a parallel criminal case by the DOJ for $384M.  SEC

December 8, 2015

A federal jury in Las Vegas convicted Anthony Brandel and James Warras of conspiracy, wire fraud and securities fraud for their roles in an approximately $10 million international investment fraud scheme involving numerous victims.  According to evidence presented at trial, Brandel and Warras conspired with others in the US and Switzerland to promote investments and loan instruments they knew to be fraudulent.  Specifically, they misrepresented to victims using fabricated bank documents that, for an up-front payment, a Swiss company known as the Malom (Make A Lot of Money) Group AG would provide access to lucrative investment opportunities and substantial cash loans.  DOJ

December 2, 2015

Franklin American Mortgage Company agreed to pay $70 million to resolve allegations it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements.  Specifically, First American audits identified substantial percentages of seriously deficient loans but the company reported very few deficiencies to HUD, causing the FHA to insure hundreds of loans that were not eligible and, as a result, the FHA suffered substantial losses when it later paid insurance claims on those loans.  DOJ

November 13, 2015

French power and transportation company Alstom S.A. was sentenced to pay a $772 million fine for violating the Foreign Corrupt Practices Act (FCPA) through its payment of millions of dollars in secret bribes to government officials across the globe.  According to the company’s own admissions, Alstom paid bribes to government officials and falsified books and records in connection with power, grid and transportation projects for state-owned entities around the world, including in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan.  Alstom concealed the bribes by retaining consultants purportedly to provide consulting services but that actually served as conduits for the illegal payments.  In total, Alstom paid more than $75 million in bribes to secure more than $4 billion in projects around the world, with a profit to the company of approximately $300 million.  Whistleblower Insider

November 6, 2015

Former CEO of TierOne Bank Gilbert G. Lundstrom was convicted for orchestrating a scheme to defraud TierOne’s shareholders and to mislead regulators by concealing more than $100 million in losses on loans and declining real estate.  In 2014, co-conspirators James Laphen, TierOne’s former president and chief operating officer, and Don Langford, TierOne’s former chief credit officer, pleaded guilty to multiple felonies in connection with their participation in the scheme.  DOJ