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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.

				

			

			
						
					
			

	
		
		

			

				
				
April 8, 2015

				 Oregon-based defense contractor FLIR Systems Inc. agreed to pay more than $9.5 million to settle charges it violated the Foreign Corrupt Practices Act (FCPA) by financing a “world tour” of personal travel and gifts for Middle East government officials.  FLIR, which develops infrared technology for use in binoculars and other sensing products, allegedly earned more than $7 million in profits from sales influenced by the improper travel and gifts.  Whistleblower Insider				 					 

						
Tagged in:
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 7, 2015

				 The SEC charged Los Angeles-based Pacific West Capital Group Inc. and its owner Andrew B. Calhoun IV with fraud in the sale of “life settlement” investments.  The SEC’s complaint alleges since at least 2012, Pacific West and Calhoun defrauded investors by using proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier to make life settlement investments appear successful.  SEC

 				 					 

						
Tagged in:
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 7, 2015

				 The SEC announced fraud charges against former professional football player William D. Allen and his business partner Susan C. Daub and others, alleging they operated a Ponzi scheme that raised more than $31 million from investors who were promised profits from loans to professional athletes.  SEC				 					 

						
Tagged in:
													  Ponzi Schemes, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 6, 2015

				 The SEC charged 12 companies and six individuals with defrauding investors in a scheme involving applications to the Federal Communications Commission (FCC) for cellular spectrum licenses.  According to the SEC’s complaint, David Alcorn and Kent Maerki orchestrated the offering fraud through their Arizona-based company Janus Spectrum LLC. and raised more than $12.4 million, much of which they and their co-conspirators kept for personal use.  Those alleged to be involved in the scheme include Daryl G. Bank and his companies Dominion Private Client Group LLC, Janus Spectrum Group LLC, Spectrum Management LLC, Spectrum 100 LLC, Spectrum 100 Management LLC, Prime Spectrum LLC and Prime Spectrum Management LLC; Bobby D. Jones and his company Premier Spectrum Group PMA; Terry W. Johnson and Raymon G. Chadwick Jr. and their companies Innovative Group PMA, Premier Group PMA and Prosperity Group PMA.  SECv				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 2, 2015

				 The SEC charged two longtime friends, Amit Kanodia and Iftikar Ahmed, with insider trading on news of a proposed acquisition of Cooper Tire and Rubber Company by Apollo Tyres Ltd.  The SEC also named Rakitfi Holdings LLC, a company owned by Ahmed, and Lincoln Charitable Foundation, a supposed charity operated by Kanodia, as relief defendants.  SEC				 					 

						
Tagged in:
													  Insider Trading, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 1, 2015

				 Timothy Scronce agreed to settle charges of defrauding Illinois-based telecommunications company PCTEL Inc. and its shareholders during and after its acquisition of his business TelWorx Communications LLC and his three related telecommunications companies.  According to the SEC, Scronce used false accounting entries to inflate TelWorx’s quarterly revenues and earnings in the months leading up to the purchase to inflate the price PCTEL paid for the companies.  He also allegedly falsified PCTEL’s books and records and circumvented the company’s internal controls by recording bogus transactions.  Scronce consented to the SEC’s order requiring him to return his allegedly ill-gotten gains with interest, pay a civil penalty, and be barred for 10 years from serving as a public company officer or director.  SEC				 					 

						
Tagged in:
													  Accounting Fraud, 
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
April 1, 2015

				 Houston-based global technology and engineering firm KBR Inc.agreed to pay a $130,000 penalty to settle SEC charges of violating whistleblower protection Rule 21F-17 under the Dodd-Frank Act which prohibits confidentiality agreements that discourage protected whistleblowing activity.  It is the SEC’s first enforcement action against a company for using improperly restrictive language in confidentiality agreements with the potential to stifle the whistleblowing process.  At issue was KBR’s requirement that witnesses in certain internal investigations sign confidentiality statements with language warning that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department.  As part of the settlement, KBR amended its confidentiality statement by adding language making clear that employees are free to report possible violations to the SEC and other federal agencies without KBR approval or fear of retaliation.  Whistleblower Insider				 					 

						
Tagged in:
													  Employment Issues, 
													  SEC Whistleblower Reward Program, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 31, 2015

				 The SEC charged Andrew Miller, the former CEO of Silicon Valley-based technology firm Polycom Inc., with using nearly $200,000 in corporate funds for personal perks that were not disclosed to investors.  The SEC separately charged Polycom in an administrative order finding the company had inadequate internal controls and failed to report Miller’s perks to investors.  Polycom agreed to pay $750,000 to settle the SEC’s charges.  SEC				 					 

						
Tagged in:
													  Misrepresentations, 
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 30, 2015

				 The SEC announced fraud charges against investment adviser Lynn Tilton and her New York-based Patriarch Partners firms accusing them of hiding the poor performance of loan assets in three collateralized loan obligation (CLO) funds they manage collectively referred to as the Zohar funds.  SEC				 					 

						
Tagged in:
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
March 27, 2015

				 New York-based brokerage firm Macquarie Capital (USA) Inc., a wholly owned subsidiary of global financial services firm Macquarie Group Limited, agreed to pay $15 million to settle SEC charges for underwriting a public offering o Puda Coal despite obtaining a due diligence report indicating that the China-based company’s offering materials contained false information.  Former Macquarie Capital managing director Aaron Black and former investment banker William Fang also agreed to pay $212,711 and $35,000, respectively, to settle charges they failed to exercise appropriate care in their due diligence review.  SEC				 					 

						
Tagged in:
													  Misrepresentations, 
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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