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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 28, 2022

				 The Income Collecting 1-3 Months T-Bills Mutual Fund and one of its principals, Victor Chilelli, have consented to judgments ordering the return $77 million to investors; litigation against other defendants continues.  The SEC alleges that defendants, including Ofer Abarbanel, defrauded investors by misrepresenting the planned use of their funds, directing customer funds to shell companies under their control in uncollateralized loan transactions, and misappropriating investor funds for high-risk trading. SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 22, 2022

				 Healthcare company Baxter International Inc. and two of its former executives have settled claims with the SEC related to reporting of its intra-company foreign exchange transactions.  Baxter agreed to pay a penalty of $18 million; the company’s former treasurer and assistant treasurer will pay penalties of $125,000 and $100,000, respectively.  The SEC alleged that in recording foreign currency transactions recognized by its subsidiaries, Baxter used a foreign exchange rate convention that was not in accordance with U.S. generally accepted accounting principles; the company then leveraged this FX convention by engaging in intra-company transactions for the sole purpose of generating FX gains or avoiding FX losses, resulting in material misstatements of its net income.  SEC				 					 

						
Tagged in:
													  Accounting Fraud, 
													  Financial and Investment Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 17, 2022

				 South Korean telecommunications company KT Corporation will pay $6.3 million to resolve charges that the company and its executives engaged in multiple improper payment schemes in Korea and Vietnam in violation of the Foreign Corrupt Practices Act. The company allegedly failed to have adequate accounting controls, resulting in the creation of slush funds used for gifts and illegal political contributions to government officials who had influence over KT Corp.’s business.  SEC				 					 

						
Tagged in:
													  FCPA, 
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 14, 2022

				 BlockFi, Inc. will pay a total of $100 million to resolve SEC and state claims arising from its sale to retail customers of cryptocurrency lending products, including its BlockFi Interest Accounts.  Through the “BIAs,” investors lent cryptocurrency assets to BlockFi in exchange for the company’s promise to provide a variable monthly interest payment.  The SEC alleged that the BIAs were securities, offered without registration, that BlockFi operated as an unregistered investment company, and made false and misleading statements about risk levels. The total settlement includes a $50 million SEC civil penalty and $50 million to be divided equally between U.S. jurisdictions that are members of North American Securities Administrators Association.   SEC; NASAA				 					 

						
Tagged in:
													  Cryptocurrency, 
													  Financial and Investment Fraud, 
													  Misrepresentations, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
February 11, 2022

				 Defendants Seyed Taher Kameli and his companies, Chicagoland Foreign Investment Group, LLC and American Enterprise Pioneers, Inc., will pay jointly and severally $1.6 million after entering into a judgment for defrauding EB-5 immigrant investors. Kameli is an immigration attorney, some of whose clients were victims of the fraud. He promised at least 226 foreign investors that their $500,000 investments would finance construction of a senior living project and pave the way for at least 10 permanent full-time jobs, as well as qualifying each investor for a path to permanent U.S. residency. Instead, he commingled and misused some of the $88.7 million raised. Defendants are enjoined from further violations of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Kameli also agreed administratively to a 5-year suspension from practicing before the SEC as an attorney. SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Misrepresentations, 
													  Securities Fraud, 
													  Visa Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 21, 2022

				 A whistleblower received an award of $1.5 million, with the SEC finding that the individual voluntarily provided new and original information as well as substantial assistance during the course of the government’s investigation.  The information helped Commission staff formulate their investigative strategy, saved government time and resources, and significantly contributed to the success of a government investigation.   SEC				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 21, 2022

				 A whistleblower received an award of $1.8 million, with the SEC finding that the individual voluntarily provided original information that led the SEC to open an investigation that was directly based on the whistleblower’s information.  The SEC further noted that the individual had also reported the misconduct internally in a timely manner, had suffered hardship as a result of reporting, and had provided substantial ongoing assistance during the government’s investigation.   SEC				 					 

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

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 21, 2022

				 Two unidentified whistleblowers were jointly awarded $37 million based on findings that they voluntarily provided key evidence to the government, which significantly contributed to the government’s understanding of the underlying wrong, and provided ongoing assistance during the government’s investigation.  The award is based on amounts recovered in a successful enforcement action by the SEC, as well as a separate related action by a different, unidentified, agency.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Multiple Whistleblowers and First-to-File, 
													  SEC Whistleblower Reward Program, 
													  Whistleblower Rewards, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
January 10, 2022

				 The SEC has issued two awards totaling more than $4 million to three whistleblowers whose information and assistance helped bring about two successful enforcement actions.  In the first order, a single whistleblower who reported internally before providing significant new information to the agency on an existing investigation was awarded $2.6 million.  According to the SEC, the misconduct occurred overseas and would have been difficult to detect without the whistleblower’s tip.  In the second order, two whistleblowers received a joint award of $1.5 million for providing substantial ongoing assistance.  SEC				 					 

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

					
	
							
	
		
		
	


 			


 			


											

						

								

									
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