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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 27, 2019

Pharmaceutical manufacturer Mylan N.V. has agreed to pay $30 million to resolve SEC charges that the company failed to disclose or adequately accrue for possible losses arising from a DOJ investigation into Mylan's classification, pricing, and rebate practices regarding its EpiPen product.  In 2017, Mylan agreed to pay $465 million to resolve that DOJ investigation.  SEC

September 27, 2019

Fiat Chrysler Automobiles N.V. and its U.S. subsidiary FCA US LLC will pay $40 million to resolve SEC allegations that the automaker provided false and misleading information in press releases and regulatory filings about its monthly new vehicle sales and vehicle sales growth rate.  The SEC found that FCA US inflated new vehicle sales by paying dealers to report fake vehicle sales, but then failing to report those sales at the time.  Instead, Fiat Chrysler kept these sales in a separate database referred to internally as the "cookie jar," which the company would then dip into to report as current sales in a slow month.  SEC

September 27, 2019

Herbalife Nutrition Ltd. will pay $20 million to settle charges that it made misstatements in regulatory filings about its business in China.  While Herbalife, which has a direct sales model, claimed in filings that it did not use its customary multilevel marketing compensation model in China in order to comply with Chinese law, in fact, its compensation model in China was materially identical to its compensation model in every other country.  By failing to disclose this information, Herbalife was found to have deprived investors of valuable information regarding the risks faced by the company.  SEC

September 26, 2019

Wisconsin-based Quad/Graphics Inc., a digital and print marketing provider, has agreed to pay $10 million to settle charges of bribing government officials in Peru and China in violation of the Foreign Corrupt Practices Act (FCPA).  The alleged misconduct by Quad/Graphics’ Peruvian subsidiary, Quad/Graphics Peru S.A., occurred from at least 2011 to 2016 and involved paid or promised bribes to government officials in order to win contracts, avoid penalties, and influence the Peruvian tax authority.  From 2010 to 2015, Quad/Graphics’ Chinese subsidiary, Quad/Tech Shanghai Trading Company, Ltd., allegedly paid or promised bribes to government employees using sham sales agents.  As part of the settlement, Quad/Graphic will pay nearly $7 million in disgorgement, $1 million in prejudgment interest, and a $2 million civil penalty, as well as self-report on its compliance program for one year.  SEC

September 24, 2019

The SEC has simultaneously charged and settled with a global information and media analytics firm, Comscore, Inc., and its former CEO, Serge Matta, for $5 million and $700,000, respectively.  Comscore had been accused of manipulating the accounting of non-monetary transactions in order to present the illusion of smooth and steady growth to investors.  Matta also agreed to reimburse Comscore $2.1 million representing profits from the sale of Comscore stock and incentive-based compensation pursuant to Section 304(a) of the Sarbanes-Oxley Act and to the entry of an order barring him from serving as an officer or director of a public company for 10 years.  SEC

September 23, 2019

TechnipFMC plc. was ordered by the SEC to pay $5 million to resolve allegations that the company violated the FCPA by making payments to a third party consultant who used some of the money to bribe Iraqi government officials to win business with state-owned oil companies.  The company, which previously paid $296 million to settle FCPA charges by the DOJ, was also charged with violating the FCPA’s books and records and internal accounting controls provisions.  The SEC settlement included a three-year deferred prosecution agreeement.  SEC

September 23, 2019

Nissan, its former CEO Carlos Ghosn, and former director Greg Kelly have settled fraud charges by agreeing to pay a combined $16.1 million to the SEC.  From 2009 to 2018, Ghosn, Kelly, and subordinates at Nissan allegedly misled U.S. investors by concealing more than $90 million in executive compensation from public disclosure.  At the same time, using Ghosn’s authority to set individual compensation levels, including his own, the co-conspirators changed the calculation of Ghosn’s pension allowance to allow for more than $50 million in additional benefits.  To settle charges, Nissan agreed to pay $15 million, Ghosn agreed to pay $1 million, and Kelly agreed to pay $100,000.  SEC

September 23, 2019

PricewaterhouseCoopers LLP and PwC partner Brandon Sprankle will collectively pay $7.9 million to resolve SEC claims that they violated PCAOB Rule 3525 and SEC Rules of Practice 102(e) in performing non-audit services for 15 different SEC-registered audit clients.  The SEC found that PwC failed to make required disclosures of the non-audit services, denying the clients of information necessary to assess PwC's independence.  In addition, the SEC found that PwC failed to have adequate internal controls to monitor non-audit services for audit clients.  PwC and Sprankle consented to the order without admitting or denying the SEC findings.  SEC

September 20, 2019

After four years of litigation, the SEC obtained a $5.2 million judgment against Earl Miller, an Indiana-based defendant who leveraged his Amish heritage to raise money from investors from Michigan and Indiana Amish communities for two private funds. The SEC’s complaint alleged that Miller lied about investing in real estate and non-specified “green products” and that at least seventy-two investors lost over $4.1 million. SEC

September 18, 2019

The Securities and Exchange Commission filed an emergency action against Mediatrix Capital Inc. and three of its principals for misrepresenting the profitability of an algorithmic international trading program, which the company claimed had returned “more than 1,600 percent” since its inception. According to the SEC’s complaint, the trading strategy instead consistently failed to perform, losing $18 million in 2018 alone. The company also allegedly misled investors by falsifying statements and misusing funds to pay for personal purchases, including luxury cars. The SEC estimates that Mediatrix put a total of $125 million of investor funds at risk. SEC
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