June 16, 2023

June 16, 2023

Pacific Investment Management Company LLC (PIMCO) has agreed to pay $9 million to settle two SEC enforcement actions.  In the first action, PIMCO was found to have failed to disclose material information to investors concerning the use of interest rate swaps by one of its funds, and the impact those swaps had on the funds’ dividend.  In the second action, PIMCO was found to have failed to comply with a...

The Whistleblowers Behind the Impeachment Proceedings of Suspended Texas AG Ken Paxton

Whistleblowers come from all industries, occupations, backgrounds, and political affiliations.  On June 16, the Texas Tribune ran a profile on the four whistleblowers behind impeachment allegations against Texas Attorney General Ken Paxton, which drives home the point. First, some necessary context.  In November 2020, the four whistleblowers filed a lawsuit against Paxton under the Texas Whistleblower Act.  That lawsuit alleged that Paxton engaged in wrongful conduct, including “applying . ....

Catch of the Week: Smart Pharmacy, Inc.

This week's Department of Justice (DOJ) Catch of the Week goes to Florida-based compounding pharmacies Smart Pharmacy, Inc. and SP2, and their owner Gregory Balotin.  Yesterday, they agreed to pay at least $7.4 million to settle charges they violated the False Claims Act by adding an antipsychotic drug to topical pain creams solely to boost Medicare reimbursement.  Not because of any medical purpose the drug served.  The government made it...

June 16, 2023

Convertible note dealer, BHP Capital NY, Inc., and its managing member, Bryan Pantofel, have agreed to pay more than $2.5 million and surrender unregistered securities for cancellation in order to settle charges of failing to register with the SEC as securities dealers.  The defendants allegedly operated as an unregistered dealer—including purchasing notes from microcap issuers, converting the notes into four billion shares of stock, and selling the stocks—from 2017 to...

Constantine Cannon's Liz Soltan Featured in The Hill Discusses Protecting FinCEN Whistleblowers

Constantine Cannon Whistleblower associate Elizabeth “Liz” Soltan is featured in The Hill with an op-ed on remuneration for whistleblowers under the Financial Crimes Enforcement Network (FinCEN) whistleblower program.  FinCEN whistleblowers help fight money laundering and sanctions evasion. The FinCEN program is in its early days and has not published regulations. It may be modeled on the Securities and Exchange Commission’s successful whistleblower program, which began in 2010. Ms. Soltan writes...

SEC to Older Investors: "Never Stop Learning"

Earlier this week, the Securities and Exchange Commission (SEC) unveiled a public service campaign to help older investors protect themselves against securities fraud.  The campaign centers around a new TV spot called Never Stop Learning and several short and catchy informational videos highlighting various steps seniors and their caregivers should take to ward off fraud and safeguard retirement savings.  In all this, the SEC hopes to arm pensioners with the...

Bill To Reform New York’s Antitrust Laws Again Passes the State Senate

A bill in the New York State Legislature that would substantially reform New York’s antitrust laws and place the Empire State at the vanguard of antitrust enforcement has once again passed the New York State Senate and now rests with the Assembly. Although the final legislative session day was scheduled for June 8, 2023, as reported by the Times Union, the Assembly may return in the near future—perhaps June 20—to...

June 15, 2023

Two compounding pharmacies, Smart Pharmacy, Inc. and SP2, LLC, and their owner, Gregory Balotin, have agreed to pay at least $7.4 million to resolve two qui tam lawsuits by whistleblowers Amy Sanchez and Ashok Kohli, both former employees of Smart Pharmacy.  According to the suits, in order to increase orders for expensive compounded pain creams, the pharmacy routinely waived mandatory patient co-payments for them, and in order to boost reimbursements...

June 15, 2023

Wisconsin woman Kay Yang and her companies AK Equity Group LLC and Xapphire LLC have agreed to pay almost $13.7 million in restitution and over $10.4 million in civil monetary penalty in connection with a fraudulent scheme targeting the Hmong community.  Yang’s husband, Chao Yang, was also ordered to pay $1.42 million in disgorgement.  From 2017 until the pandemic hit in March 2020, the defendants solicited and received at least...

June 15, 2023

Online intimate apparel retailer AdoreMe, Inc. has agreed to pay $2.35 million to settle allegations by 31 states and the District of Columbia that it deceptively marketed a discount membership program and made it difficult for consumers who bought it to cancel it.  Consumers were charged about $40 a month to be in the program, but Adore Me failed to properly disclose the amount of the monthly charge, that discounts...