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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 30, 2022

				 In order to settle charges of failing to perform proper audits of a company committing fraud, audit firm RSM US LLP has been ordered to pay $3.75 million and retain an independent consultant, while partners Steven Kirn and Richard Condon, and senior audit manager Michael Piqueira have agreed to be suspended for 1-3 years.  Over the four-year period in which RSM audited Revolution Lighting Technologies Inc., RSM allegedly failed to detect that the company was fraudulently inflating revenue with bill and hold sales in violation of accounting principles.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 29, 2022

				 The Chinese affiliate of accounting firm Deloitte, known as Deloitte Touche Tohmatsu Certified Public Accountants LLP, has agreed to pay a $20 million penalty and submit to extensive remedial measures for its failures to comply with fundamental U.S. auditing requirements in audits of companies listed on U.S. exchanges.  According to multiple SEC audits spanning multiple years, instead of properly reviewing client financial statements and internal controls, Deloitte-China had a practice of asking clients to select their own samples for testing and prepare their own audit documentation.  SEC				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 29, 2022

				 Barclays PLC and Barclays Bank PLC has agreed to pay $361 million following charges that they offered and sold an unprecedented $17.7 million in unregistered securities without setting up internal controls to track those transactions in real time.  The firms eventually self-reported to regulators and commenced a rescission offer.  SEC				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 27, 2022

				 Oracle Corporation has been ordered to pay more than $23 million to resolve charges that its subsidiaries in Turkey, the UAE, and India violated the Foreign Corrupt Practices Act.  According to the SEC, between 2016 and 2019, the subsidiaries used slush funds to pay foreign officials and their families to attend international technology conferences in exchange for business.  Oracle India was previously sanctioned for similar charges in 2012.  SEC				 					 

						
Tagged in:
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 27, 2022

				 Fifteen broker-dealers and one affiliated investment advisor has been ordered to pay combined penalties of more than $1.1 billion following SEC charges of violating the recordkeeping provision of securities laws.  Barclays, Bank of America (including Merrill Lynch, Pierce, Fenner & Smith), Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, and UBS each paid $125 million, while Jefferies and Nomura each paid $50 million and Cantor Fitzgerald paid $10 million, to settle charges of failing to prevent or preserve communications their employees made via messaging apps on their personal devices.  SEC				 					 

						
Tagged in:
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 22, 2022

				 The Boeing Company and its former CEO, Dennis A. Muilenburg, have agreed to pay $200 million and $1 million respectively, in order to resolve SEC charges of making materially misleading statements to investors following crashes of two 737 MAX planes in 2018 and 2019.  Despite knowing the MCAS system at fault would be an ongoing safety issue, Boeing and Muilenburg repeatedly assured investors and the public otherwise.  SEC				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 20, 2022

				 Morgan Stanley Smith Barney LLC (MSSB) has agreed to pay $35 million to the SEC to settle charges of failing to protect the personal identifying information (PII) of some 15 million customers.  Between 2015 to 2020, MSSB failed to properly encrypt PII or properly dispose of devices and servers containing PII.  As a result, decommissioned devices containing unencrypted PII were resold by a third party via an internet auction site, and 42 decommissioned servers containing unencrypted PII went missing entirely.  SEC				 					 

						
Tagged in:
													  Cybersecurity and Data Breaches, 
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 19, 2022

				 Sparkster Ltd. and its CEO, Sajjad Daya, have agreed to pay $30 million to settle charges of offering and selling crypto asset securities called SPRK tokens that were not registered with the SEC and were not eligible for a registration exemption.  A crypto influencer, Ian Balina, was separately charged in federal court for promoting SPRK tokens on social media without disclosing that he received a 30% bonus on tokens he purchased in exchange for his posts, and for selling the tokens to an investing pool of around 50 individuals.  SEC				 					 

						
Tagged in:
													  Cryptocurrency, 
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 15, 2022

				 Brazil’s second largest airline, GOL Linhas Aéreas Inteligentes S.A. (GOL), has agreed to pay $70 million to the SEC and $41 million to civil and criminal authorities in the U.S. and Brazil to resolve charges of violating the Foreign Corrupt Practices Act.  The airline allegedly offered and paid $3.8 million in bribes to various officials in Brazil to help usher in legislation involving certain payroll taxes and fuel tax reductions that were favorable to the airline.  DOJ; SEC				 					 

						
Tagged in:
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
September 12, 2022

				 Registered investment advisers Hudson Advisors L.P. and Lone Star Global Acquisitions Ltd. have agreed to a resolution totaling $79.7 million to resolve claims that the firms included $54.6 million of its owner’s anticipated U.S. tax liability in fees charged to the funds although by law, those tax liabilities were payable by the owner and the firms were not authorized to charge the tax liability as a component of fees without full and fair disclosure to the funds. The firms will pay an $11.2 million civil penalty and reimburse the affected funds $68.5 million, which includes interest on the undisclosed tax liability charges.  SEC				 					 

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

					
	
							
	
		
		
	


 			


											

						

								

									
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