Archive

April 15, 2019

Munich-based UniCredit Bank AG (UCB AG) and affiliated entities have agreed to pay more than $1.3 billion to resolve criminal charges and related allegations of unlawful conduct by the Department of Justice, Department of Treasury Office of Foreign Assets Control (OFAC), the Federal Reserve, the New York Department of Financial Services, and the New York County District Attorney's Office. As part of the settlement, UniCredit admitted that between 2002 and 2011 it processed financial transactions worth hundreds of millions of dollars through U.S. financial institutions on behalf of the Islamic Republic of Iran Shipping Lines and other entities subject to sanctions under the International Emergency Economic Powers Act (IEEPA).  DOJ; Treasury; Fed; DANY

April 9, 2019

London-based Standard Chartered Bank has agreed to pay $1.1 billion to resolve criminal charges and related allegations of unlawful conduct by the Department of Treasury Office of Foreign Assets Control (OFAC), the Federal Reserve, the New York Department of Financial Services, the New York County District Attorney's Office, and the United Kingdom's Financial Conduct Authority. As part of the settlement, Standard Chartered admitted that it processed thousands of financial transactions worth hundreds of millions of dollars through U.S. financial institutions for the benefit of Iranian and other entities and individuals subject to sanctions. In addition, Standard Chartered admitted that it had deficiencies in its compliance programs and had falsified the records of New York financial institutions.  In addition to the financial penalties, Standard Chartered agreed to the extension of an existing deferred prosecution agreement through 2021, and committed to undertaking specified compliance initiatives.  DOJ; Treasury; Fed; DANY; UK

March 22, 2019

Merrill Lynch agreed to pay $8 million to settle charges by the SEC that it improperly borrowed ADRs from other brokers when it knew that these other brokers did not own the foreign shares needed to support the pre-released ADRs.  This practice artificially inflates the number of securities that are tradeable for a foreign issuer.  SEC

March 13, 2019

Wedbush Securities, Inc., will pay a $250,000 penalty to resolve an SEC investigation into an alleged failure to supervise its representatives.  Wedbush allegedly ignored evidence that one of its representatives was engaged in a pump-and-dump scheme targeting retail investors.  Wedbush also agreed to undertake specified remedial measures.  SEC

March 11, 2019

Marshall Islands-based 1pool Ltd. and its chief executive officer and owner, Patrick Brunner, will pay $990,000 to resolve a CFTC action alleging that they illegally offered retail commodity transactions that were margined in bitcoin, failed to register as a futures commission merchant (FCM), and failed to have required anti-money laundering procedures in place. The settlement payment consists of a $175,000 civil monetary penalty, disgorgement of $246,000 in gains, and restitution of approximately $570,000 to U.S. customers.  CFTC

March 11, 2019

Investment advisers that placed their clients in higher-cost mutual fund share classes, and received a share of the higher 12b-1 fees charged by those investments, but failed to adequately disclose the conflicts of interest where a lower-cost share class was available, will collectively return more than $125 million to their clients, the majority of whom are retail investors.  Seventy-nine investment advisors have agreed to refund the improperly disclosed fees collected by them to individual clients, with interest, as well as to undertake additional compliance procedures.  SEC

February 15, 2019

Following his conviction at trial for securities fraud and related charges, attorney James M. Schneider of Boca Raton, Florida, was sentenced to seven years in prison and ordered to pay restitution of $19.7 million to over 2,000 investors.  From 2008 to 2013, Schneider and his co-conspirators created approximately 20 shell companies, falsely representing their ownership and control in SEC filings before offering their securities for sale.  The conspirators would then use the shell company shares in pump-and-dump and other manipulation schemes.  USAO SD FL

January 29, 2019

Four public companies – Grupo Simec S.A.B de C.V., Lifeway Foods Inc., Digital Turbine Inc., and CytoDyn Inc. – have agreed to cease and desist orders, findings of violations, and civil penalties with respect to their failures to maintain internal control over financial reporting (ICFR).  Although each of the companies had disclosed material weaknesses in ICFR, the SEC found that they had failed to adequately remediate the weaknesses.  SEC

January 2, 2019

Wells Fargo will pay a $10 million penalty to the California Department of Insurance to resolve allegations that Wells Fargo signed approximately 1,500 customers up for insurance without their consent.  Wells Fargo also agreed to exit the personal insurance business.  CA

December 28, 2018

Wells Fargo reached a settlement valued at $575 million with the 50 states and District of Columbia to resolve state investigations into Wells Fargo's practice of opening accounts for customers without authorization.  The settlement will be divided among the states.  See, e.g., CA; FL; GA; IL; NJ; PA.