Archive

August 29, 2023

Goldman Sachs & Co. has been ordered to pay $5.5 million to settle CFTC charges of violating the cease-and-desist provision of a previous order.  The 2019 order had involved a failure of Goldman’s hardware to record calls to its trading and sales desk for 20 calendar days in 2014.  The present order covers two additional failures involving Goldman’s use of two third-party vendors to record and retain audio calls.  During the early days of the pandemic, increased usage led to increased failures of the vendors’ hardware and software, which in turn led to additional failures to fully record and retain thousands of calls per CFTC recordkeeping requirements.  CFTC

August 28, 2023

Roomster and owners John Shriber and Roman Zaks have been ordered to pay $36.2 million in monetary judgment and $10.9 million in civil penalties to resolve allegations of charging consumers for access to fake listings for available housing.  Additionally, Roomster was found to have bought tens of thousands of fake reviews which it used to populate the listings.  Per settlement terms, the required payments are suspended upon payment of $1.6 million to New York, California, Colorado, Florida, Illinois, and Massachusetts, which led the investigation along with the FTC.  FTC

August 28, 2023

Some of the largest credit repair brands in the country, including CreditRepair.com and Lexington Law, have been banned from offering telemarketing credit repair services for 10 years to settle charges of using telemarketers to collect illegal advance fees for their services, in violation of the federal Telemarketing Sale Rule.  The companies have also been ordered to pay $2.7 billion in restitution, and two entities, Progrexion Marketing and Health law firm, will pay $64 million in civil penalties.  CFPB

August 28, 2023

Impact Theory, LLC will pay more than $6.1 million in disgorgement, prejudgment interest, and a civil penalty, for offering and selling crypto asset securities to the public in an unregistered offering. Impact Theory sold three tiers of non-fungible tokens (NFTs)--"Legendary," "Heroic," and "Relentless," which were ostensibly an investment into their business in which Impact was "trying to build the next Disney" which would provide "tremendous value" to investors. In addition to the $6.1 million, the order establishes a Fair Fund to return monies paid by injured investors, and Impact Theory will destroy all Founder's Keys in its possession or control and will eliminate any royalty Impact might otherwise receive from secondary market transactions. SEC

August 25, 2023

A whistleblower has been awarded more than $18 million for providing the SEC with information that launched an investigation.  According to the SEC, the whistleblower initially reported concerns internally before reporting to the agency.  Their assistance ultimately led to a successful enforcement action.  SEC

August 25, 2023

3M Company has agreed to pay more than $6.5 million to resolve charges that a wholly-owned subsidiary in China provided bribes to Chinese government officials in violation of the Foreign Corrupt Practices Act (FCPA).  The bribes to officials at state-owned healthcare facilities came in the form of guided overseas travel—ostensibly to conferences, educational events, and healthcare facility visits, but in reality to sightseeing, shopping, and other leisure activities.  The subsidiary ultimately paid almost $1 million to fund at least 24 such trips from about 2014 to 2017.  SEC

August 25, 2023

Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network LLC (collectively, Wells Fargo), has agreed to pay $35 million in civil penalties to resolve charges of overcharging more than 10,900 investment advisory accounts more than $26.8 million in excessive advisory fees.  The fees were inadvertently charged to certain clients who opened accounts before 2014 through the end of 2022, after account processing staff failed to enter agreed-upon reduced fees into billing systems.  Wells Fargo has already reimbursed affected accountholders approximately $40 million with interest.  SEC

August 14, 2023

UBS AG has agreed to pay $1.4 billion to settle a DOJ investigation alleging the financial institution and its U.S.-based affiliates defrauded investors by making false and misleading statements regarding its residential mortgage-backed securities (RMBS), which it knew largely did not hold up to loan underwriting guidelines and consumer protection laws.  During the 2008 financial crisis, 40 RMBS that UBS issued in 2006 and 2007 ultimately tanked, causing substantial losses to investors.  This settlement is the last case brought by a DOJ working group focused on failed RMBS that led to the crisis.  DOJ

August 10, 2023

Crypto asset trading platform Bittrex Inc. and its co-founder and former CEO, William Shihara, has agreed to pay $24 million in civil penalties, disgorgement, and prejudgment interest to settle charges of acting as an unregistered broker, exchange, and clearing agency, in violation of the Securities Exchange Act of 1934.  According to the SEC, Bittrex had actively avoided government regulation by directing token issuers to scrub their public statements of certain statements that may be problematic.  SEC

August 10, 2023

Colombian financial services institution Corporación Financiera Colombiana S.A. (Corficolombiana) has agreed to pay over $80 million to resolve foreign bribery investigations by criminal, civil, and administrative authorities in the United States and Colombia.  Between 2012 and 2015, Corficolombiana allegedly conspired with Brazilian-based construction conglomerate Odebrecht S.A. (Odebrecht) to offer and pay more than $20 million in bribes to Colombian government officials in order to win rights to construct and operate a 328-mile toll road.  As a result, Corficolombiana earned more than $28 million in profits.  Now, in addition to the financial penalties that it will pay—which will be divided between DOJ and SEC—the company will be subject to a three-year deferred prosecution agreement with DOJ.  DOJ; SEC