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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.

				

			

			
						
					
			

	
		
		

			

				
				
February 9, 2023

				 Payward Ventures, Inc. and Payward Trading Ltd., better known as Kraken, has agreed to pay $30 million in disgorgement, prejudgment interest, and civil penalties for its failure to register the offer and sale of its crypto asset staking-as-a-service program.  Staking involves investors locking their crypto tokens with a blockchain validator; if the tokens then become used to validate data for the blockchain, their owners are rewarded with additional tokens.  According to the SEC, Kraken advertised its staking-as-a-service program as having annual investment returns of as much as 21%, but failed to properly register or disclose risks to investors.  SEC				 					 

						
Tagged in:
													  Cryptocurrency, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 7, 2023

				 Saivian LLC and owner EJ Dalius have agreed to pay $24 million in disgorgement, prejudgment interest, and penalties for operating a multimillion-dollar Ponzi and pyramid scheme.  According to the SEC, Savian and Dalius promised investors 20% cash back on retail shopping purchases as long as they paid a $125 fee every 28 days and submitted receipts for their purchases.  Savian and Dalius claimed the cash back payments were funded by monetizing receipt data, when in fact, it was funded by payments from prior investors.  In addition to the Ponzi scheme, Savian and Dalius also ran a pyramid scheme wherein affiliates sold memberships to others down the line.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Ponzi Schemes, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 3, 2023

				 Video game company Activision Blizzard has agreed to pay $35 million to settle charges that alleged it failed to implement controls to collect and review internal complaints about workplace misconduct.  The company also violated a whistleblower protection rule by requiring former employees to provide notice if they received information requests from the SEC.  SEC				 					 

						
Tagged in:
													  SEC Whistleblower Reward Program, 
													  Whistleblower Protection Laws, 
												
						

					
	
							
	
		
		
	


 			


 			




	
		
		

			

				
				
January 23, 2023

				 Bloomberg Finance L.P. has been ordered to pay $5 million to settle charges of making misleading disclosures related to BVAL, a paid subscription service that provides daily price valuations for fixed-income securities.  According to the order, Bloomberg failed to disclose that its valuations for certain fixed-income securities did not adhere to previously disclosed methodologies.  Financial service entities that relied on such valuations, including mutual funds, were impacted by the misleading disclosures.  SEC				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 23, 2023

				 Charlie Abujudeh of California has been ordered to pay over $5 million for his role in defrauding retail investors through a microcap fraud scheme.  Abujudeh and associates allegedly made misleading statements during high pressure sales calls and email promotions to urge investors to invest in Odyssey Group International, Inc., Scepter Holdings, Inc., and CannaPharmaRx, Inc., then gave hundreds of thousands of investor funds to a contact within Odyssey.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 19, 2023

				 Cryptocurrency company Nexo Capital Inc. has agreed to pay $22.5 million and comply with a cease and desist order in order to settle SEC charges of failing to register the offer and sale of its retail crypto asset lending product.  The company has agreed to pay another $22.5 million and comply with additional terms in order to settle similar charges in California, Indiana, Kentucky, Maryland, New York, Oklahoma, South Carolina, Vermont, Washington, and Wisconsin.  As part of those additional terms, Nexo must notify all remaining U.S. investors to withdraw all remaining assets from Nexo’s platform by April 2023.  SEC, AG NY				 					 

						
Tagged in:
													  Cryptocurrency, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			


 			




	
		
		

			

				
				
January 13, 2023

				 The SEC has awarded more than $5 million to a whistleblower who first reported internally, and whose subsequent tip to the agency helped shape its investigation.  Based on the whistleblower’s information, agency staff were able to identify witnesses and effectively draft document and information requests.  SEC				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 11, 2023

				 A man accused of defrauding ten pension funds out of $43 million has been ordered to pay over $10.2 million in disgorgement, interest, and penalties.  Jason Sugarman, his partner Jason Galanis, and six other co-conspirators had acquired control of two investment advisors with the intent to use their clients’ funds to purchase Native American tribal bonds.  Instead, the group misappropriated the funds and used them to acquire a foreign insurance company and the second investment advisor.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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