Archive

August 6, 2021

The SEC has awarded more than $3.5 million to three whistleblowers whose information and assistance led to two separate enforcement actions.  In the first order, an individual received approximately $2 million for providing information that launched an investigation into an ongoing fraud.  In the second order, one whistleblower received approximately $1 million and a second whistleblower received approximately $500,000 for providing information that assisted the agency in an existing investigation.  SEC

August 4, 2021

For causing more than $100 million in losses to employers, employees, financial institutions, and financing companies and laundering more than $1 billion in stolen funds, Michael Mann, the owner of shuttered payroll service companies ValueWise and MyPayrollHR, has been sentenced to 12 years in prison.  In addition to misappropriating payroll funds and money laundering, Mann was also found to have fraudulently obtained tens of millions of dollars in loans from three financing companies, as well as fraudulently obtained lines of credit from several banks in the New York area.  NY AG; USAO NDNY

August 2, 2021

Ernst & Young LLP and three of its audit partners, along with William Stiehl, who was serving as the chief accounting officer of a public company, collectively agreed to pay more than $10 million to resolve SEC claims of wrongdoing with respect to EY’s pursuit of audit business from the public company.  EY and its partners were alleged to have solicited and received confidential competitive intelligence and confidential audit committee information from Stiehl during the issuer’s auditor’s selection process, in violation of auditor independence rules.  EY agreed to pay $10 million and comply with a detailed set of undertakings for a period of two years; the individual auditors agreed to pay civil monetary penalties between $15,000 and $50,000 and to be suspended from appearing or practicing before the Commission for times ranging from one to three years; Stiehl agreed to pay a civil monetary penalty of $51,000 and to be suspended from appearing or practicing before the Commission for two years.  SEC

August 2, 2021

The SEC has announced awards totaling more than $4 million to whistleblowers whose contributions resulted in two successful enforcement actions.  In the first order, two whistleblowers were awarded $2 million and $150,000 each, while in the second order, another two whistleblowers were awarded $1.1 million and $500,000 each.  According to the SEC, the whistleblowers’ alerts sparked investigations into previously unknown misconduct.  SEC

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 21, 2021

The SEC has awarded nearly $3 million to an individual who alerted the agency to previously unknown misconduct.  The whistleblower’s substantial assistance helped conserve agency resources and led to a successful enforcement action.  SEC

July 19, 2021

UBS Financial Services Inc. will pay $8 million to resolve claims of compliance failures with respect to the sale of an exchange-traded product designed to track short-term volatility expectations in the market as measured against derivatives of a volatility index. UBS placed restrictions on the sale of the product to brokerage customers, but did not place similar restrictions on activity by financial advisors, and failed to monitor concentration limits on volatility-linked ETPs. SEC

July 15, 2021

The SEC has awarded more than $1 million to a single whistleblower whose timely information and ongoing assistance led to a successful enforcement action.  SEC

July 14, 2021

Following a lawsuit filed by the FTC in 2018, online lender LendingClub has agreed to pay $18 million to settle claims of deceiving consumers about hidden fees, misrepresenting consumers’ approvals for loans, and withdrawing money from consumer bank accounts without authorization.  In addition to the monetary penalty, LendingClub is now required to clearly and conspicuously disclose all fees, as well as the total amount of funds being borrowed.  FTC

July 13, 2021

Joel Jerome Tucker, the principal in payday loan business eData Solutions, LLC and related entities, was ordered to pay $8.1 million in restitution to the IRS and sentenced to 12.5 years in prison following his conviction on charges related to his fraudulent sale of non-existent payday loan portfolios and the failure by him and his companies to file federal income tax returns or pay taxes.  Tucker used nominee bank accounts to conceal income and assets and owed taxes, penalties, and interest of more than $12 million.  In addition, in 2020, Tucker fraudulently obtained a $20,000 Paycheck Protection Program loan.  USAO WD MO