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July 21, 2021

Suneet Singal, First Capital Real Estate Investments, LLC, and related entities, agreed to pay fines totaling over $7 million to resolve claims that they made material misrepresentations and omissions concerning First Capital Real Estate Trust Inc., a real estate investment trust.  The SEC alleged that defendants misrepresented the REIT’s property holdings, and that Singal fraudulently directed funds to his own use.  Singal was barred from the securities industry for at least ten years.  SEC

July 13, 2021

Special purpose acquisition corporation Stable Road Acquisition Company, its CEO Brian Kabot, and the SPAC’s proposed merger target Momentus Inc. will collectively pay penalties of $8 million to resolve charges that Momentus, a space transportation company, and its CEO Mikhael Kokorich, misrepresented the company's technology and ability to secure required governmental licenses, and that Stable Road repeated those misleading statements in public filings associated with its proposed merger with Momentus.  Stable Road claimed to have conducted extensive due diligence of Momentus, but it never reviewed the results of Momentus’s in-space test or received sufficient documents relevant to government licensing issues and, in particular, national security risks associated with Kokorich. SEC

June 29, 2021

Neovest Inc., a JPMorgan Chase & Co. subsidiary that provides an order and execution management system (OEMS) that facilitates electronic trading, will pay $2.75 million for its failure to register as a broker-dealer. Neovest's OEMS allows customers to route orders for stocks and options to more than 360 customer-selected destination brokers who entered into agreements with Neovest for execution. In exchange for its OEMS services, Neovest received transaction-based compensation, which were sent to J.P. Morgan Securities LLC, a registered broker-dealer, and then transferred to Neovest. SEC

June 24, 2021

Gateway One Lending & Finance, LLC, which originates, securitizes, and services auto loans, agreed to pay $6.5 million in disgorgement, prejudgment interest, and civil penalties to resolve charges that it understated the historic losses of its auto loans and overstated the projected future performance for six auto loan-backed securitizations.  SEC

June 22, 2021

Loci Inc., whose InnVenn platform provides intellectual property search services for inventors and others users, will pay $7.6 million to resolve SEC charges arising from its unregistered initial coin offering of "LOCIcoins."  In the course of the ICO, Loci and its CEO John Wise allegedly misrepresented the company’s revenues, number of employees, and InnVenn’s user base. SEC

June 2, 2021

The SEC awarded $23 million to two individuals who voluntarily provided information as whistleblowers that led to recoveries by the SEC and another federal agency in related enforcement actions. Information provided by the first whistleblower, who received approximately $13 million, initiated the investigations.  The second whistleblower, who waited several years before coming forward, provided additional information that substantially contributed, and was awarded approximately $10 million.  Both provided ongoing assistance to the Commission and the other agency, providing documents, participating in interviews, and identifying key individuals and systems involved in the investigations.  SEC

May 28, 2021

Eric Pulier, who previously served as an executive at ServiceMesh, Inc., which later merged with Computer Sciences Corporation (CSC), entered into a consent judgment for $4.8 million in disgorgement, civil penalties, and interest.  The judgment resolved an SEC action alleging that Pulier paid more than $2 million in bribes to executives at the Commonwealth Bank of Australia to secure business for CSC.  Securing the Australia business entitled ServiceMesh to a $98 million earn-out payment from the CSC acquisition, and Pulier was personally entitled to $30 million of that earn-out.  SEC

May 4, 2021

DaRayl Davis, who owned and operated Financial Assurance Corp. and Affluent Advisory Group LLC, has been sentenced to 13 years in prison and ordered to pay restitution of $7.1 million on charges arising from his sale of fictitious financial products to investors with false promises that the investors would receive fixed annual interest payments and guaranteed protection against losses.  In fact, Davis diverted investor funds to his personal use.  USAO ND IL; SEC

May 3, 2021

Sporting goods manufacturer Under Armour Inc. agreed to pay $9 million to resolve SEC allegations that the company engaged in  accounting fraud.  The SEC alleged that in an effort to meet analyst sales forecasts, Under Armour began to "pull forward" revenue by recognizing as current revenue orders that customers had placed for delivery in future quarters, and did not disclose this practice to investors.  SEC

April 23, 2021

The SEC has granted awards totaling more than $3 million to two whistleblowers whose information led to two separate enforcement actions.  The first whistleblower was awarded approximately $3.2 million for helping to conserve agency resources by identifying key issues to focus on and providing subject matter expertise.  The second whistleblower was awarded more than $100,000 for significant information and ongoing assistance that helped stop an ongoing fraud.  SEC
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