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Government Enforcement Actions

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Page 8 of 533

September 29, 2023

SMC Systems Inc., d/b/a Skyetec, has agreed to pay $2.35 million to resolve allegations of violating the Financial Institutions Reform, Recovery and Enforcement Act of 1989.  Over a seven year period, Skyetec allegedly made false statements to the EPA regarding the results of inspections for the EPA’s Energy Star Home Certification Program, which verifies the presence and installation quality of a home's insulation.  DOJ

Tagged in: Environmental Fraud, Misrepresentations,

September 29, 2023

Goldman Sachs & Co. LLC has been ordered to pay $3 million to settle charges of failing to maintain adequate supervisory systems and controls, in connection with a 2017 malfunction.  Additionally, Goldman allegedly omitted material information regarding the malfunction when responding to a CFTC request for information on how customer orders were executed.  CFTC

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

September 29, 2023

North Carolina-based global specialty chemical manufacturing company Albemarle Corporation has agreed to pay over $218 million in penalties and forfeiture to the DOJ, $103.6 million in disgorgement and prejudgment interest to the SEC, and enter into a three-year non-prosecution agreement to settle charges of violating the anti-bribery, recordkeeping, and internal accounting controls provision of the Foreign Corrupt Practices Act (FCPA).  Albemarle admitted to using third-party intermediaries to pay bribes from about 2009 to 2017 in order to obtain and retain business with state-owned oil refineries in Vietnam, Indonesia, and India.  As a result, the company obtained profits of about $98.5 million.  DOJ; SEC

Tagged in: Bribery and Bid-Rigging, Criminal Proceedings, FCPA,

September 29, 2023

Registered investment adviser D. E. Shaw & Co. L.P. has agreed to pay $10 million to settle charges of violating the whistleblower protection rule of the Securities Exchange Act of 1934.  According to the SEC, between 2011 and 2019, the company required new employees to sign agreements prohibiting them from disclosing information to anyone outside the company without company authorization, a court order, or as required by law.  Between 2011 and 2023, the company also required about 400 departing employees to sign releases stating they had not filed complaints with any federal agency before they were able to receive benefits.  SEC

Tagged in: Importance of Whistleblowers, SEC Whistleblower Reward Program,

September 29, 2023

Consumer products company Newell Brands Inc. and its CEO, Michael Polk, have agreed to pay $12.5 million and $110,000 in civil penalties, respectively, to resolve charges of misleading investors about its core sales growth.  The company allegedly engaged in accounting practices that were inconsistent with Generally Accepted Accounting Principles (GAAP), which made it appear as if it had hit its sales targets when in fact it had not.  SEC

Tagged in: Financial and Investment Fraud,

September 29, 2023

Goldman Sachs, J.P. Morgan, and Bank of America and Merrill Lynch have been ordered to pay $30 million, $15 million, and $8 million respectively in connection with a variety of swap dealer failures.  Goldman Sachs failed to diligently supervise a wide range of its swap dealer activities, some of them since 2013, and failed to accurately or timely report a significant portion of its swap data.  J.P. Morgan underreported or misreported over 40 million swap transactions.  Bank of America and Merrill Lynch underreported or misreported almost 4 million swap transactions.  CFTC

Tagged in: Financial Institution Fraud, Fraud in CFTC-Regulated Markets,

September 29, 2023

Interactive Brokers Corp., an introducing broker, and Interactive Brokers LLC, a futures commission merchant, has been ordered to pay $20 million to the CFTC and $35 million to the SEC to resolve charges of failing to maintain and preserve records.  The records included communications through unapproved channels, such as text and WhatsApp, which employees at all levels used and which the company failed to maintain and preserve.  The SEC also resolved charges against other firms for similar misconduct, including Robert W. Baird & Co. Inc. ($15 million); William Blair & Company LLC and William Blair Investment Management LLC ($10 million); Nuveen Securities LLC ($8.5 million); Fifth Third Securities Inc. ($8 million); and Perella Weinberg Partners LP, Tudor, Pickering, Holt & Co. Securities LLC, and Perella Weinberg Partners Capital Management LP ($2.5 million).  CFTC; SEC

Tagged in: Financial Institution Fraud, Fraud in CFTC-Regulated Markets, SEC Whistleblower Reward Program,

September 28, 2023

The Boeing Company has agreed to pay $8.1 million to resolve allegations of violating the False Claims Act.  Under a Navy contract to manufacture a tiltrotor military aircraft, Boeing allegedly failed to comply with certain manufacturing specifications, submitted false claims, and made false statements.  The claims were brought in a qui tam suit by former Boeing employees, who will receive a relator’s share of $1.5 million as a result of the settlement.  DOJ

Tagged in: Defense Contract Fraud, FCA Federal, Whistleblower Case, Whistleblower Rewards,

September 28, 2023

Energy provider Exelon Corporation and its subsidiary Commonwealth Edison Company (ComED) have agreed to pay $46.2 million to settle charges of attempting to influence legislation through illegal bribes to then-Speaker of the Illinois House of Representatives, Michael Madigan.  Between 2011 and 2019, in anticipation of benefits worth more than $150 million, ComEd provided $1.3 million in monetary payments, as well as employment and subcontracts, to Madigan’s associates.  Former ComED CEO Anne Pramaggiore—who allegedly directed and participated in the scheme, lied to investors and auditors, and filed false certifications—continues to face charges of violating federal securities laws.  SEC

Tagged in: Bribery and Bid-Rigging, Misrepresentations,

September 27, 2023

The CFTC has awarded more than $300,000 to a whistleblower whose tip led to an investigation and whose aid led to a successful enforcement action. The whistleblower’s information was described as particularly informative and precise, and helped save the agency substantial resources.  CFTC

Tagged in: CFTC Whistleblower Reward Program, Whistleblower Rewards,

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