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June 4, 2020

A whistleblower has been awarded $50 million in what is the largest amount ever awarded to a single person in the history of the SEC’s whistleblower program.  According to the SEC’s press release, the successful enforcement action that resulted from the unnamed individual’s tip allowed harmed investors to recover a significant amount of money.  SEC

June 4, 2020

Investment advisory firm Navallier & Associates, and its founder and Chief Investment Officer, Louis Navallier, has been ordered to pay $30 million to the SEC for allegedly defrauding prospective clients and retained clients in connection with the firm’s Vireo AlphaSector investment strategies.  The firm was allegedly aware of false and misleading statements regarding the stategies’ performance in marketing materials sent to clients, but failed to inform clients and in fact continued to sell the strategies.  SEC

May 19, 2020

Payment processing company First Data Merchant Services, LLC will pay $40.2 million to resolve FTC charges that it laundered, or assisted laundering of, credit card transactions for scams facilitated by Chi “Vincent” Ko and his company First Pay Solutions LLC, which operated as an independent sales agent for First Data.  Ko allegedly opened hundreds of merchant accounts to process payments for scams that targeted hundreds of thousands of consumers, and First Data knowingly processed payments for those scams.  FTC

May 19, 2020

The country’s largest subprime auto financing company, Santander Consumer USA Inc, has agreed to pay over $550 million to resolve allegations of violating consumer protection laws by knowingly placing consumers in auto loans that the company expected would default at a rate of over 70%.  Under the settlement, affected consumers in 34 states who defaulted on loans between 2010 and 2019 will receive restitution.  Additionally, Santander has agreed to various relief efforts, including transferring titles and waiving balances for consumers who defaulted on loans and had not had their cars repossessed yet, waiving balances or debt still owed even on cars already repossessed, and helping to repair consumer credit scores.  CA AG; NY AG; VA AG

May 15, 2020

Credit rating agency Morningstar will pay $3.5 million to settle charges that it violated conflict of interest rules by having credit rating analysts in its asset-backed securities group engage in marketing to issuers, including offering to provide indicative ratings.  SEC rules prohibit rating agencies from issuing or maintaining a credit rating where an analyst who participates in determining or monitoring credit ratings also participates in sales and marketing activity, and require agencies to have policies to address conflicts of interest.  SEC

May 6, 2020

The United States has obtained a settlement of $49 million in the 1Malaysia Development Berhad (1MDB) scandal, in which high-level officials of 1MDB and their associates allegedly robbed the people of Malaysia by misappropriating over $4.5 billion in public funds, which they laundered through financial institutions based in the United States and other countries and squandered on expensive properties and possessions.  With the conclusion of the case against Emirati businessman Khadem al-Buraisi, the United States has recovered over $1.1 billion in assets arising from the 1MDB scandal, representing the largest civil forfeiture by the DOJ and the largest recovery to date under the agency’s Kleptocracy Asset Recovery Initiative.  DOJ; USAO CDCA

May 4, 2020

The SEC has granted a nearly $2 million award to a whistleblower whose early tip allowed the agency to freeze assets associated with fraudulent conduct, prevent the dissipation of investor funds and allow investors to recover most of their money.  The whistleblower’s tip also ultimately led to a successful enforcement action.  SEC

April 30, 2020

Entities of Israeli banking conglomerate Bank Hapoalim have pleaded guilty and entered into civil settlements for their role in a money laundering scheme for bribes made to soccer officials with Fédération Internationale de Football Association (FIFA) and others in exchange for preferences including in the award of soccer match broadcasting rights.  As part of three-year non-prosecution agreement, the bank will forfeit $20.73 million, pay a fine of $9.33 million, and undertake specified remedial and compliance efforts. The bank simultaneously entered into a separate settlement regarding tax evasion.  DOJ; USAO EDNY

April 29, 2020

Lender Guaranteed Rate, Inc. will pay $15.1 million to resolve allegations that it knowingly failed to adhere to material program requirements in originating and underwriting mortgages insured by FHA or guaranteed by the VA, resulting in mortgages that did not meet credit and underwriting requirements for the government-sponsored guarantees and insurance.  The case was initiated by a whistleblower complaint filed under the False Claims Act by an unnamed former Guaranteed Rate employee, who will receive $2.4 million of the settlement proceeds.  The settlement also resolved claims under FIRREA.  DOJ; USAO NDNY

April 28, 2020

An anonymous whistleblower will receive $18 million based on a successful enforcement action by the SEC.  The whistleblower’s SEC submission, which was made after the individual repeatedly reported the problem internally, initiated the SEC investigation resulting in the recovery.  SEC
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