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SEC Enforcement Actions

The Securities and Exchange Commission (SEC) is the United States agency with primary responsibility for enforcing federal securities laws. Whistleblowers with knowledge of violations of the federal securities laws can submit a claim to the SEC under the SEC Whistleblower Reward Program, and may be eligible to receive  monetary rewards and protection against retaliation by employers.

Below are summaries of recent SEC settlements or successful prosecutions. If you believe you have information about fraud which could give  rise to an SEC enforcement action and claim under the SEC Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

September 25, 2023

Investment adviser DWS Investment Management Americas Inc. (DIMA), a subsidiary of Deutsche Bank AG, has agreed to pay $25 million to settle two separate enforcement actions.  In the first action, DIMA was found to have failed to develop and implement an anti-money laundering (AML) program to comply with the Bank Secrecy Act and Financial Crimes Enforcement Network regulations.  In the second action, DIMA was found to have made materially misleading statements about how it managed its Environmental, Social, and Governance (ESG) products while marketing itself as a leader in the field.  SEC

September 22, 2023

Goldman Sachs & Co. LLC has agreed to pay $6 million to resolve charges of failing to provide accurate securities trading information to the SEC.  The firm admitted to making 26 of 43 total types of errors, through 22,000 deficient blue sheet submissions, ultimately causing inaccurate or missing trade data for at least 163 million transactions.  SEC

September 22, 2023

American Infrastructure Funds LLC (AIM) has agreed to pay $1.6 million in civil penalties, disgorgement, and prejudgment interest to settle charges of violating the antifraud and compliance provisions of the Advisers Act while acting as an investment advisor to private funds.  According to the SEC, AIM failed to disclose multiple conflicts of interest to its clients, including instances where it failed to consider whether a fee acceleration or a loan was in its clients’ best interests.  It also violated its fiduciary duties by transferring funds from one fund nearing the end of its term to a new fund without obtaining investor consent or providing investors with an exit, even though doing so would lock up investor funds for another decade.  SEC

September 6, 2023

Fluor Corporation and five of its former and current officers and employees have agreed to pay $14.5 million to settle charges of improper accounting and delayed loss recognition on two large construction projects.  According to the SEC, the errors caused the company to overstate its net earnings by as much as 37% from 2016 to 2019.  SEC

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

August 8, 2023

BNP Paribas, Société Générale, Wells Fargo, and Bank of Montreal have been ordered to pay a combined $260 million for violating CFTC rules around recordkeeping and supervision.  Separately, two of those institutions, BNP Paribas and Wells Fargo, along with BMO Capital Markets Corp., Houlihan Lokey Capital, Inc., Mizuho Securities USA LLC, Moelis & Company LLC, SMBC Nikko Securities America, Inc., and Wedbush Securities Inc., have agreed to pay a combined $289 million for violating similar SEC rules.  The financial institutions were found to have failed to maintain, preserve, or produce communications sent via unapproved channels, such as personal texts.  With this enforcement action, the CFTC has recovered over $1 billion from actions against 18 financial institutions for similar charges, while the SEC has recovered over $1.5 billion from actions against 30 financial institutions.  CFTC, SEC

July 14, 2023

The former CEO of SPAC African Gold Acquisition Corp., Cooper J. Morgenthau, has been ordered to pay over $5 million in disgorgement with prejudgment interest to the SEC for stealing more than $5 million from the company and investors via unauthorized withdrawals, which he disguised through falsified documents to auditors and accountants.  In a related criminal action, Morganthau was sentenced to 3 years in prison, ordered to forfeit over $5 million, and pay over $5 million in restitution.  SEC

July 13, 2023

Cryptocurrency platform Celsius Network has been banned from handling consumer assets and ordered to pay a $4.7 billion judgment, suspended pending the return of remaining assets to consumers in ongoing bankruptcy proceedings.  Before filing for bankruptcy in July 2022, Celsius marketed the platform as a safe place to deposit cryptocurrency and made various representations to build consumer confidence, including promises that consumers could withdraw deposits at any time, that deposits were insured by a $750 million policy, that sufficient reserves were on hand, and that deposits could earn as high as 18% APY.  However, all of those claims were all false, and in fact, Celsius misappropriated $4 billion in deposits, using them to fund operations, reward other consumers, and make high-risk investments that often lost money.  FTC; SEC
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