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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

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

April 19, 2021

Unregistered investment adviser Hai Khoa Dang has been ordered to pay a $2.2 million penalty and about $7,000 in disgorgement and interest for defrauding a retired couple who had been his clients for 20 years.  Dang allegedly informed the couple that he would invest their funds conservatively; unbeknownst to his clients, he then engaged in a risky options trading strategy that ultimately caused their funds to plummet from over $2.2 million to $27,000.  SEC

Tagged in: Financial and Investment Fraud,

April 15, 2021

The SEC has awarded two whistleblowers a joint award of over $50 million for providing information, voluminous documents, and substantial assistance that led to the return of tens of millions of dollars to harmed investors.  According to the SEC, the fraud scheme at issue involved highly complex transactions that would have been difficult for the agency to detect.  SEC

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

April 9, 2021

The Alista Group, LLC, and Luis M. Pineda Palacios, a/k/a Luis Pineda, have been ordered to pay civil monetary penalties and restitution in an action initiated by the CFTC alleging that they engaged in precious metals fraud and illegal, off-exchange precious metals sales to retail customers.  In addition, the government alleged that defendants misappropriated customer funds to trade on their own account, pay business expenses, and make payments to customers to sought to cash out.  Alista was ordered to pay a total of $2.2 million, and Pineda was ordered to pay $448,000. CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Ponzi Schemes, Regulatory Violations,

April 8, 2021

Circle Society, Corp. and its owner, David Gilbert Saffron, have been ordered to pay more than $32 million in restitution, disgorgement, and civil monetary penalty for cryptocurrency fraud and misappropriation.  First as an individual, and then through Circle Society, Saffron allegedly solicited millions in Bitcoin and U.S. dollars from at least 179 individuals by making false statements regarding his trading expertise and guaranteed rates of return.  However, rather than trading the fu­nds on foreign currencies and cryptocurrency pairs, Saffron directed­­ portions to his personal cryptocurrency wallet and used other portions to pay prior investors.  CFTC

Tagged in: Cryptocurrency, Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Ponzi Schemes,

April 8, 2021

A man in New Mexico has been ordered to pay over $10.3 million in monetary sanctions and relief after he admitted to running a Ponzi scheme that spanned nearly twenty years.  Instead of investing client funds in U.S. Treasury Bond futures, Douglas Lien misappropriated over $14.2 million from 45 clients, while charging them over $3.5 million in so-called management fees.  Lien has now been permanently banned from commodities trading and registering as a futures commission merchant.  CFTC

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

April 7, 2021

A default judgment was ordered against Negus Capital Inc. and its principal Aaron Butler, based on charges of commodity pool fraud in connection with binary options trading.  The order finds that defendants unlawfully solicited  the public to trade binary options contracts on the North American Derivatives Exchange, defrauded 70 customers who sent in nearly $300,000, misappropriated customer funds, and operated as an unregistered commodity pool operator. In addition to restitution, defendants were ordered to pay civil penalties of nearly $900,000.  CFTC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations, Ponzi Schemes, Regulatory Violations,

March 29, 2021

The SEC has awarded an anonymous whistleblower $500,000 based on recoveries in a covered action and a related action that resulted in the shut-down of an ongoing fraudulent scheme. The whistleblower first reported the alleged misconduct to their employer, using the employer’s internal compliance procedures.  Then, within 120 days of reporting the violations internally, the whistleblower submitted a TCR to the SEC.  According to the SEC, the whistleblower provided significant information that prompted it to open an investigation, and provided ongoing assistance to Commission staff.  Separately, the employer began an internal investigation and ultimately made a report to a government agency.  Because the whistleblower reported internally and to the SEC within 120 days of their internal report, the SEC applied its “safe harbor” rule and treated the whistleblower’s SEC submission as if it had been made on the day that the whistleblower reported internally.  SEC

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

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