Other Federal Enforcement

March 9, 2022

Chevron Phillips Chemical Company LP has agreed to pay a $3.4 million penalty and undertake compliance measures valued at $118 million to resolve a federal complaint regarding alleged violations of the Clean Air Act and related laws arising from its flaring at petrochemical facilities in Cedar Bayou, Port Arthur, and Sweeney, Texas.  The government claimed that Chevron Phillips failed to properly operate and monitor its industrial flares, which resulted in excess emissions of harmful air pollution at the three facilities.  EPA

March 8, 2022

The operators of online stock trading site RagingBull.com, which used bogus earnings claims to lure customers into expensive and hard to cancel subscriptions, have been ordered to pay $2.4 million.  The proposed settlement order also prohibits the defendants from making similar claims in the future, requires them to obtain informed consent from consumers before signing them up to subscriptions, and requires them to provide consumers with easy methods of cancellation.  FTC

February 24, 2022

The National Bank of Pakistan and its New York branch will pay a total of $55.4 million to resolve investigations by the New York State Department of Financial Services and the Federal Reserve Bank of New York into Bank Secrecy Act/Anti-Money Laundering compliance deficiencies.  The bank had previously entered into agreements with the government entities, acknowledging BSA/AML weaknesses and agreeing to undertake remedial measures.  However, the bank had failed to undertake adequate remedial  measures, as found in examinations by the government entities.  NY DFS; Fed

December 7, 2021

Vyera Pharmaceuticals, LLC and its parent company Phoenixus AG will pay up to $40 million and have agreed to make its drug Daraprim available to any potential generic competitor at list price to resolve claims of anticompetitive conduct.  The federal government and state governments alleged that Vyera principals Martin Shkreli and Kevin Mulleady enacted a plan to acquire life-saving toxoplasmosis drug, Daraprim, and dramatically raise its list price by 400% while engaging in conduct to prevent generic competition and protect their monopolistic pricing.  The resolution also bars Mulleady from working in the pharmaceutical industry for seven years; claims against Shkreli are continuing.  FTC; CA; NY; NC; VA

November 9, 2021

The National Highway Traffic Safety Administration announced a $24.3 million whistleblower award to Gwang Ho Kim, a former Hyundai safety engineer who provided critical information to NHTSA about safety defects in millions of Hyundai and Kia vehicles.  The award under the Motor Vehicle Safety Whistleblower Act was made in connection with Hyundai and Kia’s 2020 agreement to pay combined penalties of up to $210 million. NHTSA.

October 19, 2021

JPay, a financial services company which, among other services, provides debit cards to prisoners to meet their essential needs as they are released from incarceration, will pay $6 million – $4 million in restitution and $2 million as a civil penalty – to resolve allegations that they violated the Consumer Financial Protection Act and Electronic Fund Transfer Act by charging consumers unlawful fees.  As part of the settlement, JPay is also limited in fees it can impose on release cards going forward.  CFPB

August 12, 2021

United Behavioral Health and United Healthcare Insurance Co. will pay $2 million in penalties to resolve claims that the insurer unlawfully denied coverage for mental health and substance use disorder treatment in violation of laws that require health insurance plans to cover mental health and substance use disorder treatment the same way they cover physical health treatment. New York and the federal Department of Labor alleged that United reduced allowed amounts for mental health and substance abuse services provided by non-physicians, but not for medical treatments provided by non-physicians, and conducting utilization reviews for psychotherapy that were not conducted at the same rate for medical/surgical services.  In addition the penalty, United agreed to pay $13.6 million to affected participants and beneficiaries.  DOL; NY

August 10, 2021

Five companies that operate the BitMEX cryptocurrency platform will pay a total of $100 million to resolve claims that the platform operated a facility to trade or process swaps without being approved as a Designated Contract Market (DCM) or a Swap Execution Facility (SEF), operated as an unregistered futures commission merchant (FCM), and failed to implement anti-money laundering procedures.  HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited jointly operated BitMEX, which offered leveraged trading of cryptocurrency derivatives, including to customers in the U.S.  BitMEX acted as a counterparty in certain transactions, and accepted bitcoin to margin digital asset derivative transactions.  BitMEX allowed customers to access its platform and conduct derivative trading without verifying customer identity beyond the collection of an email address, and failed to report suspicious activity as required. As part of the settlement, BitMEX certified that it terminated its U.S. business operations, barred access to the platform by U.S. customers, and had undertaken verification procedures for existing customers.  $50 million of the $100 million penalty will be paid to the CFTC, with $30 million of the remainder paid immediately to FinCEN, and an additional $20 million to FinCEN suspended pending defendants’ undertaking of specific compliance procedures.  CFTC; FinCEN

August 5, 2021

Pipeline company Summit Midstream Partners LLC, Meadowlark Midstream Company LLC, and Summit Operating Services Company LLC, have agreed to pay $35 million in fines and penalties to settle criminal and civil cases arising from the discharge of 29 million gallons of “produced water” – a waste product of hydraulic fracturing – from Summit’s pipeline near Williston, North Dakota, over the course of nearly five months in 2014-2015.  As part of the settlement, Summit admitted that it operated the pipeline without a reliable leak detection system and made incomplete and misleading reports to federal and state authorities about the spill.  DOJ; EPA; December, 2021 DOJ Release

June 30, 2021

Following its 2020 SEC penalty, Robinhood Financial LLC was ordered to pay $70 million by FINRA -- a $57 million penalty and $12.6 million in restitution and interest to harmed customers -- to resolve charges that the firm provided false and misleading information, improperly authorized customers for options trading without appropriate due diligence, and failed to reasonably supervise the technology it used to provide core broker-dealer services including for the acceptance and execution of customer orders.  FINRA