Archive

September 23, 2019

Nissan, its former CEO Carlos Ghosn, and former director Greg Kelly have settled fraud charges by agreeing to pay a combined $16.1 million to the SEC. From 2009 to 2018, Ghosn, Kelly, and subordinates at Nissan allegedly misled U.S. investors by concealing more than $90 million in executive compensation from public disclosure. At the same time, using Ghosn’s authority to set individual compensation levels, including his own, the co-conspirators changed the calculation of Ghosn’s pension allowance to allow for more than $50 million in additional benefits. To settle charges, Nissan agreed to pay $15 million, Ghosn agreed to pay $1 million, and Kelly agreed to pay $100,000. SEC

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

September 20, 2019

After four years of litigation, the SEC obtained a $5.2 million judgment against Earl Miller, an Indiana-based defendant who leveraged his Amish heritage to raise money from investors from Michigan and Indiana Amish communities for two private funds. The SEC’s complaint alleged that Miller lied about investing in real estate and non-specified “green products” and that at least seventy-two investors lost over $4.1 million. SEC

Tagged in: Financial and Investment Fraud, Misrepresentations,

September 13, 2019

The SEC has enjoined Kevin B. Merrill, Jay B. Ledford, and Cameron R. Jezierski from further violations of securities laws, based on their role in a $345 million offering fraud, through which they represented to investors that their funds would used to acquire and service debt portfolios, but instead used investor funds to make payments to earlier investors, and to fund their own extravagant lifestyles. The SEC continues to investigate the Ponzi-like scheme, and a receiver has been appointed for the involved entities, Global Credit Recovery, LLC, Delmarva Capital, LLC, Rhino Capital Holdings, LLC, Rhino Capital Group, LLC, DeVille Asset Management LTD, and Riverwalk Financial Corporation. SEC

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

September 12, 2019

Ronald Hardy and Dennis Verdosa, both formerly associated with Power Traders Press and My Street Research, were sentenced to, respectively, 10 years and 6 years in prison following their 2018 guilty pleas for their roles in a "boiler room" operation that defrauded investors, many elderly, of $147 million. Defendants artificially inflated the price and trading volume of stock in certain publicly-traded companies, and misrepresented the advisability of purchasing the stock and its potential profitability to victim investors. The defendants often themselves held interests in the companies, and profited when their victims lost. USAO EDNY

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Market Manipulation and Trading Violations, Misrepresentations, 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,

August 9, 2019

In a default judgment, Kevin Andre Perry and Lucrative Pips Corporation of Atlanta, Georgia were ordered to pay a civil penalty of $2 million and restitution of almost $700,000 with respect to their fraudulent marketing of a foreign exchange pool. Defendants told prospective pool participants that their funds were “guaranteed” against trading losses and that their accounts would grow in value by 200% to 350% in less than 60 days. Defendants then failed to return funds when customers tried to later withdraw them. CFTC

Tagged in: Foreign Exchange, Fraud in CFTC-Regulated Markets, Misrepresentations, Ponzi Schemes,

August 8, 2019

Lee Elbaz was found guilty of orchestrating a scheme to defraud U.S. investors, wrongfully obtaining $145 million in investor funds. Yukom Communications, Ltd., with Elbaz as the CEO, used the websites BinaryBook and BigOption to market "binary options" to investors. Elbaz and Yukom falsely claimed to represent the interests of investors when, in fact, they profited when investors lost money, and made false statements about binary option suitability and expected returns, their identity and qualifications, and the ability of investors to withdraw funds. Elbaz was sentenced in December, 2019. DOJ

Tagged in: Criminal Proceedings, Fraud in CFTC-Regulated Markets, Misrepresentations,

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 19, 2019

Kelvin Ramirez of Houston, Texas, was ordered to pay more than $2.9 million – $2.2 million as a civil penalty, and $736,000 in restitution – in a default judgment that also permanently barred him from trading in any CFTC-regulated market or registering with the CFTC. Ramirez solicited clients through social media platforms, offering bogus forex trading schemes. CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations,

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,

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