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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.

				

			

			
						
					
			

	
		
		

			

				
				
December 21, 2021

				 Nikola Corporation will pay $125 million to resolve charges that the transportation systems provider, which designs and manufactures electric trucks and hydrogen fuel systems, misrepresented or omitted material facts about its products, technical advancements, and commercial prospects.  Many of these statements were made by Nikola’s founder and former CEO, Trevor Milton, on social media and otherwise, both before and after Nikola went public through a merger with a special purpose acquisition company (SPAC).  An SEC action against Milton is continuing.   SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 20, 2021

				 Private equity fund adviser Global Infrastructure Management, LLC will pay a $4.5 million civil penalty to resolve SEC charges that the company overcharged clients by failing to offset certain portfolio company fees against management fees charged to clients, as it was required to do under the offering and governing documents. Global has previously repaid $5.4 million to affected clients.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 17, 2021

				 J.P. Morgan Chase entities, including broker-dealer J.P. Morgan Securities LLC, will pay a total of $200 million -- $125 million as an SEC penalty and $75 million as a CFTC penalty -- to resolve claims that firm employees communicated both internally and externally on unapproved channels, failed to preserve written communications, and failed to supervise.  Defendants admitted that employees, including senior and supervisory employees, regularly and openly communicated about business using personal devices, text messages, WhatsApp, and other private messaging, none of which were preserved by the firm, in violation of recordkeeping requirements.  As a result, J.P. Morgan entities were unable to provide information in response to subpoenas and information requests from regulators.  SEC; CFTC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Fraud in CFTC-Regulated Markets, 
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 15, 2021

				 Broker-dealer Wedbush Securities Inc. has agreed to pay $1.2 million to resolve allegations related to the unregistered sale of large blocks of 50 different low-priced microcap companies by Silverton SA, a former offshore customer.  The SEC also found that Wedbush failed to file SARs for certain suspicious transactions that it executed for Silverton, despite the presence of numerous red flags.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Financial Institution Fraud, 
													  Money Laundering, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 7, 2021

				 The SEC has issued a whistleblower reward of $5 million to an individual who voluntarily provided original information to the Commission regarding the misuse of proceeds from a securities offering.  The SEC found that the whistleblower promptly reported the misconduct, enabling the Commission to quickly bring a successful enforcement action and return millions to harmed investors.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  SEC Whistleblower Reward Program, 
													  Securities Fraud, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 6, 2021

				 Dialysis provider American Renal Associates Holdings, Inc. and three of its former financial executives have entered into a settlement agreement resolving allegations of accounting fraud; ARA will pay a $2 million civil penalty. The company and it executives allegedly manipulated revenue by improperly recognizing payments from insurance companies for patient services, overstating net income by more than 30% in 2017 and by more than 200% for the first three quarters of 2018.  The company issued restated financial in 2019.  SEC				 					 

						
Tagged in:
													  Accounting Fraud, 
													  Financial and Investment Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 24, 2021

				 Guy Scott Griffithe, who controlled an entity called Renewable Technologies Solutions, Inc., and Robert William Russell, who owned an entity called SMRB, LLC, have been ordered to pay more than $6 million to resolve charges that they mislead investors by falsely stating that investments in Renewable would be used to operate SMRB, which held a license to grow marijuana under Washington’s recreational cannabis laws.  To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors, which were partially funded in a Ponzi-like fashion using funds from other investors.  Griffithe was found liable for more than $5.3 million in disgorgement, prejudgment interest, and civil penalties; Russell was found liable for more than $698,000 in disgorgement, prejudgment interest, and civil penalties.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Misrepresentations, 
													  Ponzi Schemes, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 22, 2021

				 Two whistleblowers who provided the SEC with new and significant information during an existing investigation, including information about misconduct occurring in different geographic areas, received awards of approximately $6.2 million and $1.3 million.  The award to the first claimant was also based in part on a recovery in a related action, based on findings that the whistleblower provided information to the relevant other agency.  In support of the first claimant’s larger award, the SEC also cited that their information was more significant, that the majority of the relief ordered was based on information provided by them, that they reported their concerns internally prior than reporting to the SEC, and they reported more expeditiously.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Multiple Whistleblowers and First-to-File, 
													  SEC Whistleblower Reward Program, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			


 			


 			


											

						

								

									
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