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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 19, 2023

Commercial real estate firm CBRE, Inc., a subsidiary of CBRE Group, Inc., has agreed to pay $375,000 to settle charges of violating the SEC’s whistleblower protection rule between 2011 and 2022.  In order to receive separation pay, CBRE allegedly required over 800 of its departing employees to sign releases stating they had not filed complaints with any federal agency.  As part of its settlement with the SEC, CBRE has informed former employees who signed the release of their right to communicate with the government, as well as taken revised all of its releases to be in compliance with the whistleblower protection rule.  SEC

September 18, 2023

Lyft Inc. will pay a $10 million civil penalty for its failure to disclose a board director's role in the sale of $424 million worth of private shares prior to Lyft's initial public offering. The director arranged for a shareholder to sell their shares to a special purpose vehicle, and then arranged for another investor to purchase the shares through the SPV. Lyft failed to disclose this information in its 2019 Form 10-K, depriving investors of critical information. SEC

September 12, 2023

Canadian resident George Stubos will pay disgorgement of $5,367,926 and prejudgment interest of $806,108 for his microcap stock investment scheme. Stubos gained control of several thinly traded microcap companies and then lied to investors, brokers, and transfer agents, and convinced them his stock shares were eligible to be publicly traded. In addition to not registering his sales with the SEC and failing to disclose his control over the entities, Stubos also engaged in market manipulation to create demand for his stock. In addition to the disgorgement and interest, Stubos is subject to a penny stock bar and is prohibited from participating in the issuance, purchase, offer, or sale of any security other than for his own personal accounts. SEC

September 6, 2023

Ameritrust Corporation and relief defendant Beespoke Capital, Inc. will pay more than $20 million in disgorgement, civil penalties, and prejudgment interest for lying to investors primarily located in the Republic of Korea, telling them their investments would be used to purchase shares of a publicly traded company in the U.S. Ameritrust's CEO, Seong Yeol Lee, through a network of recruiters, solicited and received funds from investors, which he then deposited in his corporate and personal bank accounts, as well as bank accounts for three of his adult children. Lee in fact never applied for Ameritrust's exchange listing. In addition to paying the $20 million, Ameritrust is prohibited from violating Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act. 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 28, 2023

Impact Theory, LLC will pay more than $6.1 million in disgorgement, prejudgment interest, and a civil penalty, for offering and selling crypto asset securities to the public in an unregistered offering. Impact Theory sold three tiers of non-fungible tokens (NFTs)--"Legendary," "Heroic," and "Relentless," which were ostensibly an investment into their business in which Impact was "trying to build the next Disney" which would provide "tremendous value" to investors. In addition to the $6.1 million, the order establishes a Fair Fund to return monies paid by injured investors, and Impact Theory will destroy all Founder's Keys in its possession or control and will eliminate any royalty Impact might otherwise receive from secondary market transactions. SEC

August 25, 2023

3M Company has agreed to pay more than $6.5 million to resolve charges that a wholly-owned subsidiary in China provided bribes to Chinese government officials in violation of the Foreign Corrupt Practices Act (FCPA).  The bribes to officials at state-owned healthcare facilities came in the form of guided overseas travel—ostensibly to conferences, educational events, and healthcare facility visits, but in reality to sightseeing, shopping, and other leisure activities.  The subsidiary ultimately paid almost $1 million to fund at least 24 such trips from about 2014 to 2017.  SEC

August 25, 2023

Wells Fargo Clearing Services LLC and Wells Fargo Advisors Financial Network LLC (collectively, Wells Fargo), has agreed to pay $35 million in civil penalties to resolve charges of overcharging more than 10,900 investment advisory accounts more than $26.8 million in excessive advisory fees.  The fees were inadvertently charged to certain clients who opened accounts before 2014 through the end of 2022, after account processing staff failed to enter agreed-upon reduced fees into billing systems.  Wells Fargo has already reimbursed affected accountholders approximately $40 million with interest.  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
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