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March 13, 2023

Evoqua Water Technologies Corp. and its former finance director, Imran Parekh, have been ordered to pay an $8.5 million civil monetary penalty for materially misstating the company’s reported revenues by nearly $12 million in 2017 and 2018.  According to the SEC, Parekh inflated Evoqua’s reported quarterly and year-end revenue by improperly including uncompleted sales numbers from earlier periods.  SEC

March 9, 2023

Blackbaud Inc., which provides donor data management software to non-profits, has agreed to pay $3 million for allegedly failing to maintain internal disclosure procedures and for omitting material information about the scope of a 2020 ransomware attack in a publicly-filed report.  Although company employees learned that sensitive information affecting 13,000 customers were accessed within days of the attack, they failed to inform senior management, resulting in the company downplaying the effects of the attack.  SEC

March 2, 2023

Online counseling service BetterHelp, Inc. has been ordered to pay $7.8 million for selling its clients’ confidential information to Facebook, Snapchat, and other third parties for targeted advertising, despite repeatedly representing to clients that it would not, and despite denying news reports in 2020 that it was doing so.  In order to be matched with a counselor, BetterHelp required potential clients to answer questionnaires about sensitive mental health information, including whether they had suicidal ideations or used medications.  The company then sold that information, along with client email and IP addresses, without informing clients and without placing limits on how other companies used that information.  Under the proposed order, clients who signed up between 2017 and 2020 will be provided partial refunds, and BetterHelp must take corrective action to better protect client privacy.  FTC

February 22, 2023

In the FTC and DOJ’s first enforcement action under the Health Breach Notification Rule, online prescription drug discount provider GoodRx Holdings Inc.—which does business as GoodRx Gold, GoodRx Care, and Hey Doctor—has been ordered to pay $1.5 million in civil penalties and take corrective action, after it was found to have disclosed the personal health information of millions of its users without their knowledge or consent, despite assuring users it would not.  The disclosure involved personally identifying information, including health conditions and medications used, which were shared with Facebook, Google, and other third parties for advertising purposes.  FTC, DOJ

January 24, 2023

A former energy company executive accused of defrauding investors of more than $15 million and misappropriating investor funds has been sentenced to 5 years in prison after pleading guilty to wire fraud.  While serving as the executive chairman and managing partner of Citadel Energy, which supposedly helped oil and gas companies with fluid management, Joey Stanton Dodson made false and misleading representations and omissions to investors concerning the intended use of their funds and his own compensation.  After obtaining over $15.6 million from over 50 investors, Dodson misappropriated $1.3 million into his own accounts, and used some of it to repay investors of unrelated entities.  DOJ

December 21, 2022

Precious metals firm Monex Deposit Company, together with related entities and individual owners, have been ordered to pay a civil penalty of $5 million, and customer restitution of $33 million, to resolve claims arising from the defendants’ operation of a retail over-the-counter trading platform, known as “Atlas,” which allowed customers to speculate on precious metals price movements, with Monex acting as the counterparty to every transaction. While the defendants claimed in marketing that leveraged trading of precious metals was highly profitable, in fact, the majority of the trades resulted in losses for customers.  CFTC

November 21, 2022

Michael and Betsy Feinberg, owners of Catharon Software Company and who lied about having developed software capable of generating large returns for investors and philanthropists, will spend 5 years in prison and pay restitution for the $5 million in victim losses. The software, called VDelta, was in fact not under development, yet over a period of 15 years, the Feinbergs lied to investors with false promises about the software’s completion, release date and capabilities. Their investors were comprised mostly of the Feinbergs’ friends and associates located in Sedona, Arizona. The stolen funds were used to pay the Feinbergs’ salaries and to pay for personal expenses. USAO AZ

November 1, 2022

Two Florida-based companies and their owners have been ordered to pay more than $24.8 million for violating the state Consumer Protection Act by sending 232,091 deceptive letters to more than 15,000 small business owners in Washington State, resulting in $1.3 million in payments to the fraudsters.  The letters by CA Certificate Service and Labor Poster Compliance appeared to originate from the government and demanded payment for certificates or posters that were implied to be mandatory, but were in fact available free of charge from state and federal agencies.  Although the nationwide fraud scheme resulted in $5.3 million in losses around the country, this is the first judgment against the defendants.  WA AG

October 24, 2022

Cetera Advisors, LLC and Cetera Advisor Networks, LLC were ordered to pay over $8.5 million in disgorgement, prejudgment interest, and civil penalties combined. Defendants breached their fiduciary duty to their retail advisory clients by not disclosing compensation-related conflicts of interest. SEC

October 17, 2022

In one of New Jersey’s largest civil monetary recoveries ever, Credit Suisse Securities (USA) LLC, Credit Suisse First Boston Mortgage Securities Corp., and DLJ Mortgage Capital, Inc. (collectively, “Credit Suisse”) has agreed to pay $495 million to settle a lawsuit involving misrepresentations it made to investors on the risks of residential mortgage-backed securities (RMBS) in the years leading up to the 2008 financial crisis.  Approximately $100 million will resolve a civil monetary penalty, while another $300 million will be allocated toward restitution for victims nationwide.  Although Credit Suisse previously settled with DOJ for $5.28 billion and with New York for $10 million, the New Jersey settlement is the first to provide restitution.  NJ AG
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