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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 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

September 17, 2019

Raymond James & Associates, Inc., Raymond James Financial Services Advisors, Inc., and Raymond James Financial Services, Inc. will pay $15 million to resolve allegations that they improperly charged advisory fees on inactive retail client accounts without adequate suitability review, and charged excess commissions for brokerage customer investments in certain unit investment trusts that Raymond James recommend clients sell before their maturity, without adequate review of whether those recommendations were suitable.  SEC

September 16, 2019

Marvell Technology Group, Ltd. will pay $5.5 million to resolve charges of fraudulent accounting practices in 2015 and 2016.  Marvell allegedly accelerated sales in the fourth quarter of 2015 and first quarter of 2016, pulling those sales into the earlier quarters in order to mask a substantial decline in customer demand and loss of market share and make it appear that they were meeting forecasted revenue and publicly-issued revenue guidance.  The "pull-in" sales, in the amount of $24 million and $64 million, accounted for 5% and 16% of total revenue in the respective quarters.  SEC

September 16, 2019

Two subsidiaries of Prudential Financial, Inc., AST Investment Services Inc. and PGIM Investments LLC, will pay a civil monetary penalty of $5 million and disgorge $27.6 million to resolve charges that they failed to disclose a conflict of interest that arose between the subsidiaries, which served as investment advisors to 94 insurance-dedicated mutual funds, and Prudential, following a 2006 reorganization.  The reorganization was designed so that Prudential could receive certain tax benefits, but resulted in increased costs to the funds, which were not disclosed to the funds' boards of trustees of the beneficial owners of the funds' shares.  Prudential had previously reimbursed the funds for $155 million, and AST and PI self-reported to the SEC.  SEC

September 16, 2019

Two investment banks--Stifel, Nicolaus & Co., Inc. and BMO Capital Markets--pay $2.7 million and and $1.95 million in penalties, respectively, for failing to provide accurate data to the SEC. Broker-dealers must provide what is known as "blue sheet data," information about securities trading information that the SEC uses to monitor and investigate transactions. For a period of seven years, both entities failed to provide data and inaccurately reported information for several millions of transactions. The banks also admitted the SEC's allegations that they did not have proper mechanisms in place to verify the accuracy of their submissions. SEC

September 13, 2019

The SEC has enjoined Kevin B. Merrill, Jay B. Ledford, and Cameron R. Jezierski from further violations of securities laws, based on their role in a $345 million offering fraud, through which they represented to investors that their funds would used to acquire and service debt portfolios, but instead used investor funds to make payments to earlier investors, and to fund their own extravagant lifestyles.  The SEC continues to investigate the Ponzi-like scheme, and a receiver has been appointed for the involved entities, Global Credit Recovery, LLC, Delmarva Capital, LLC, Rhino Capital Holdings, LLC, Rhino Capital Group, LLC, DeVille Asset Management LTD, and Riverwalk Financial CorporationSEC
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