Government Enforcement Actions

March 1, 2024

Switzerland-based international commodities trading company Gunvor S.A. has pleaded guilty and agreed to pay over $661 million to resolve charges of violating the Foreign Corrupt Practices Act in connection with misconduct in Ecuador.  Over half of the proceeds will cover a criminal monetary penalty, while the remainder is a forfeiture of funds illegally gained through 8 years of bribes to Ecuadorean government officials to secure business with Petroecuador, the state-owned and controlled oil company.  Gunvor will also pay $98 million to Swiss authorities to resolve charges there.  DOJ

February 28, 2024

The owner and operator of a clinical laboratory in Georgia has pleaded guilty and agreed to pay $14.3 million to resolve charges of paying illegal kickbacks and causing false claims to be submitted to Georgia’s Medicaid program.  According to Capstone Diagnostics’ former laboratory manager, Andrew Maloney directed Capstone to pay volume-based commissions to independent sales representatives in exchange for them arranging medically unnecessary urine drug tests and respiratory pathogen panels to come their way.  The laboratory ultimately submitted over $1 million in tainted claims to Georgia Medicaid.  For bringing a successful case under the False Claims Act, whistleblower Jesse Allen will receive almost $3 million.  DOJ

February 14, 2024

A merchant cash advance operator who was found guilty of deceiving small businesses has been ordered to pay $20.3 million in civil penalties and monetary relief.  Jonathan Braun was convicted of misrepresenting the terms of merchant cash advances his business provided, using unfair collection practices, and threatening consumers with physical violence to get them to pay up.  FTC

February 9, 2024

Five broker-dealers, seven dually registered broker-dealers and investment advisers, and four affiliated investment advisors have been ordered to pay more than $81 million in total for longstanding, widespread violations of the recordkeeping provisions of the Investment Advisers Act of 1940.  The firms were found to have failed to maintain and preserve electronic communications since at least 2019.  The firms include Northwestern Mutual Investment Services LLC, Northwestern Mutual Investment Management Co. LLC, and Mason Street Advisors LLC, who will pay $16.6 million; Guggenheim Securities LLC and Guggenheim Partners Investment Management LLC, who will pay $15 million; Oppenheimer & Co. LLC, who will pay $12 million; Cambridge Investment Research Inc. and Cambridge Investment Research Advisors Inc., who will pay $10 million; Key Investment Services LLC and KeyBanc Capital Markets Inc., who will pay $10 million; Lincoln Financial Advisors Corp. and Lincoln Financial Securities Corp., who will pay $8.5 million; U.S. Bancorp Investments Inc., who will pay $8 million; and The Huntington Investment Company, Huntington Securities Inc., and Capstone Capital Markets LLC, who will pay $1.25 million.  SEC

February 9, 2024

Simple Health Plans LLC and CEO Steven J. Dorfman have been ordered to pay $195 million for violating the FTC Act and Telemarketing Sales Rule and misleading consumers into believing they were signing up for healthcare plans that covered a wide array of services.  Despite  paying as much as $500 per month for benefits, consumers were essentially uninsured and exposed to limitless medical expenses.  FTC