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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.

				

			

			
						
					
			

	
		
		

			

				
				
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				 					 

						
Tagged in:
													  Bribery and Bid-Rigging, 
													  Criminal Proceedings, 
													  FCPA, 
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
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				 					 

						
Tagged in:
													  Financial Institution Fraud, 
													  Fraud in CFTC-Regulated Markets, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 28, 2023

				 Thomas D. Renison and Timothy J. Allcott, co-founders of ARO Equity, LLC, were sentenced to 48 months and 30 months in prison, respectively, for lying to current and prospective investors about ARO's performance and for using new investors' funds to pay interest to older investors. For at least 3 years, and despite Renison being barred in 2014 by the SEC from associating with any investment adviser or broker-dealer, Renison and Allcott deceptively convinced investors to cash out their retirement accounts and invest instead with ARO, touting double-digit returns and zero downside, ultimately raising nearly $6 million from investors. ARO's investments began failing almost immediately, but Renison and Allcott continued to tell investors their investments were as safe with ARO as they were with a bank. In addition to their prison sentences, Renison was ordered to pay restitution of $6,098,198.30 and Allcott will pay restitution of $6,249,983.30. SEC				 					 

						
Tagged in:
													  Misrepresentations, 
													  Ponzi Schemes, 
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 28, 2023

				 Summitcrest Capital, Inc., and its principals, Johnny Tseng and Kevin Zhang, raised approximately $19.8 million from Chinese-speaking investors in the United States and China, misleading them to believe the funds would be used to make real estate-related loans "to the general public" and the income from these loans would be used to make interest payments and return of capital to investors. Tseng and Zhang, through their entity SC Development Fund, instead used investor funds for loans to Zhang's many real estate development and contracting businesses. Summitcrest, Tseng, and Zhang are on the hook jointly and severally for $16.6 million in disgorgement and over $4.3 million in prejudgment interest. Summitcrest and Zhang are permanently enjoined from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act. Additionally, Tseng is barred from acting as an officer or director and will pay disgorgement of $60,000, plus $15,721 in prejudgment interest and a $414,366 penalty. SEC				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
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				 					 

						
Tagged in:
													  Criminal Proceedings, 
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
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				 					 

						
Tagged in:
													  Cryptocurrency, 
												
						

					
	
							
	
		
		
	


 			


 			




	
		
		

			

				
				
July 6, 2023

				 Emerson Sousa Pires and Flavio Mendes Goncalves, who together operated a purported hedge fund called EmpiresX, has been ordered to pay over $32 million in disgorgement, over $2 million in prejudgment interest, and civil penalties of $6 million and $5 million, respectively.  The two men sold investments by assuring investors that a trading “bot,” or skilled manual trading, guaranteed daily profits of 1%.  In reality, the bot was fake, the profits were losses, and the defendants were using investor funds to fund personal expenses.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 30, 2023

				 Robert Christensen and Anthony Matic, both of Oregon, have been ordered to pay almost $5.4 million for their roles in a multi-year Ponzi scheme that defrauded retail investors of more than $10 million.  Using their companies—Foresee Inc., The Commission PDX LLC, The Policy PDX LLC, and Innings 150 LLC—Christensen and Matic offered and sold unregistered promissory notes to investors by leading them to believe the raised funds would be used to invest in real estate, and all funds raised would be returned in full within a few months with 9-15% interest.  In reality, however, Christensen and Matic used the funds on personal, unauthorized purposes.  SEC				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 26, 2023

				 Sanjay Singh, of Broward County, Florida, and his company, Royal Bengal Logistics Inc., have been charged by the SEC for fraudulently raising $112 million through a 5-year, Ponzi-like scheme, which targeted as many as 1,500 primarily Haitian-American investors through an unregistered securities offering. Singh promised investors guaranteed returns of 12.5 to 325 percent, and that the investors’ funds would be used to expand operations and increase its fleet of semi-trucks and trailers. Despite telling investors Royal Bengal generated up to $1 million in revenue per month, RB instead was operating at a loss and used approximately $70 million of new investor funds to make payments to other investors. Singh misappropriated at least $14 million of investor funds, and diverted more than $19 million into two brokerage accounts he controlled, engaged in highly speculative equities trading on margin in those accounts, and as a result lost more than $1 million of investor money. SEC				 					 

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

					
	
							
	
		
		
	


 			


											

						

								

									
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