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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

Tagged in: Financial and Investment Fraud, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,

June 2, 2021

Pennsylvania-based fuel distributor Naughton Energy Corporation and two of its owners, Mariette and Joseph Naughton, have agreed to pay $692,000 over the next five years to settle claims of causing false claims to be submitted to the Department of Transportation (DOT).  As a subcontractor on the federally funded New NY Bridge Project, Naughton Energy, a Disadvantaged Business Enterprise (DBE), had represented to the prime contractor that it could deliver fuel to the worksite wholly independently.  However, lacking the requisite vehicle and employees to deliver fuel, and without the knowledge of the prime contractor, Naughton Energy arranged for a non-DBE subcontractor to supply the missing components in exchange for half of its profits from the project.  USAO SDNY

Tagged in: FCA Federal, Government Procurement Fraud, Misrepresentations, Set-Asides and Preferences,

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

Tagged in: Bribery and Bid-Rigging, Financial and Investment Fraud, Securities Fraud,

May 27, 2021

An anonymous individual received and SEC whistleblower award of $4.2 million.  According to the SEC, the individual voluntarily provided detailed, original information that caused the Commission to open an investigation that led to a successful enforcement action.  During the investigation, the individual met with investigative staff on multiple occasions, identified key players, and provided additional helpful information and documents.  A second claimant was denied an award; Commission staff stated that they had not communicated with or used any information provided by that claimant.  SEC

Tagged in: Financial and Investment Fraud, SEC Whistleblower Reward Program, Whistleblower Rewards,

May 19, 2021

An anonymous whistleblower has received an award of $28 million, representing a share of recoveries by the SEC and by another federal government agency in a related action.  The Commission's order states that the involved company reported wrongful conduct in one geographic region, and the whistleblower voluntary submitted information to the SEC regarding similar improprieties by the company in a different country.  SEC

Tagged in: Financial and Investment Fraud, SEC Whistleblower Reward Program, Whistleblower Rewards,

May 17, 2021

Index provider S&P Dow Jones Indices LLC, which publishes the S&P 500 VIX Short Term Futures Index ER, will pay a $9 million penalty to resolve claims that inadequate quality control procedures, including an undisclosed “auto-hold” feature triggered by a VIX spike, caused it publish and disseminate stale index values during a period of unprecedented volatility.  As a result of the stale information, issuers who used the index to offer securities reported incorrect values.  SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations,

May 17, 2021

The SEC made an award of $750,000 to one whistleblower and $3.75 million to a second whistleblower based on findings that they provided information that assisted SEC staff in related civil and criminal proceedings against a company and individual.  The first individual provided information relevant to the action against the individual only, but did so more than five years after learning of the violation.  The second individual, who received a larger award, was originally denied any award by the SEC, but, upon reconsideration, the SEC concluded that they had voluntarily provided information to the Commission prior to being contacted by the Commission.  Three other claimants were denied awards.  SEC

Tagged in: Financial and Investment Fraud, Multiple Whistleblowers and First-to-File, SEC Whistleblower Reward Program, Whistleblower Rewards,

May 17, 2021

Two whistleblowers were awarded a total of $27 million, with the SEC finding that the information they jointly and voluntarily provided aided an enforcement action which resulted in the return of millions of dollars to harmed investors, even through most of the information the individuals provided was already known the SEC from other sources. The two individuals had also reported their concerns internally and met in-person with SEC staff over the course of two days. SEC

Tagged in: Financial and Investment Fraud, Multiple Whistleblowers and First-to-File, SEC Whistleblower Reward Program, Whistleblower Rewards,

May 13, 2021

Financial services company State Street Corporation will pay a $115 million criminal penalty and enter into a deferred prosecution agreement following its voluntary disclosure to authorities that, over the course of 17 years, the bank defrauded its clients out of $290 million.  State Street  admitted that it secretly marked up “out-of-pocket” (OOP) expenses charged to clients, despite telling clients that OOP expenses were passed through without markups. State Street executives took steps to conceal the mark-ups from clients, including by misleading clients when they inquired about what they were being charged for OOP expenses. As part of the settlement, defendant agreed to cooperate with ongoing investigations, to enhance its compliance program, and to retain an independent corporate compliance monitor for a period of two years. DOJ

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Financial Institution Fraud, Misrepresentations,

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