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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 11, 2015

The SEC charged Charles L. Hill Jr. with insider trading.  Specifically, the government alleges Hill made approximately $740,000 in illicit profits by trading in Radiant Systems stock on the basis of confidential inside information he received from a friend about an impending tender offer by NCR Corporation to buy the company.  SEC

February 10, 2015

The SEC announced William Slater and Peter E. Williams III, former CFOs of Silicon Valley software company Saba Software, agreed to return nearly a half-million dollars in bonuses and stock sale profits they received while Saba was committing accounting fraud.  While not personally charged with the company’s misconduct, Slater and Williams are still required under the Sarbanes-Oxley Act to reimburse the company for bonuses and stock sale profits received while the fraud occurred.  Last year, the SEC charged Saba Software and two former executives responsible for the accounting fraud in which timesheets were falsified to hit quarterly financial targets.  SEC February

February 10, 2015

Craig S. Lax, former CEO of a ConvergEx, agreed to pay more than $783,000 and admit wrongdoing to settle charges he participated in a scheme that caused his company’s customers to pay substantially higher amounts than the disclosed commissions for buying and selling securities.  The company previously paid $107M and admitted wrongdoing to settle related charges.  In settling the SEC’s charges, Lax also agreed to be barred from the securities industry for at least five years.  SEC

February 6, 2015

The SEC imposed sanctions against four China-based accounting firms that had refused to turn over documents related to investigations of potential fraud.  The China-based firms are members of large international networks associated with the “Big Four” accounting firms and include Deloitte Touche Tohmatsu Certified Public Accountants Limited, Ernst & Young Hua Ming LLP, KPMG Huazhen, andPricewaterhouseCoopers Zhong Tian CPAs Limited Company.  Under the settlement, the firms each agreed to pay $500,000 and admit they did not produce documents before the proceedings were instituted against them in 2012.  SEC

February 5, 2015

The SEC charged Chicago-area alternative energy company Broadwind Energy, along with its former CEO J. Cameron Drecoll and CFO Stephanie K. Kushner, for accounting and disclosure violations that prevented investors from knowing that reduced business from two significant customers had caused substantial declines in the company’s long-term financial prospects.  Broadwind Energy agreed to pay a $1 million penalty, and Drecoll and Kushner agreed to pay nearly $700,000 in combined disgorgement and penalties.  SEC

February 5, 2015

The SEC charged a stock research analyst, a corporate insider, and two others involved in a California-based insider trading ring that generated nearly $750,000 in illegal profits by trading in advance of four corporate news announcements.  According to the government, John Gray, then an analyst at Barclays Capital, and his friend Christian Keller traded on confidential merger information that Keller learned while working in finance at two Silicon Valley-based public companies Applied Materials Inc. and Rovi Corporation.  Gray, Keller and their accomplices agreed to settle the SEC’s charges by paying more than $1.6M combined.  SEC

January 29, 2015

Chicago-based International Capital Group, along with its two co-founders and former chief operating officer, agreed to pay more than $4.3M to settle charges they sold more than nine billion shares of penny stocks through purported stock-based loans, block trades, and other transactions without registering with the SEC as a broker-dealer as required under the federal securities laws.  SEC

January 27, 2015

Oppenheimer & Co. agreed to pay $20M to settle charges of violating federal securities laws by improperly selling penny stocks in unregistered offerings on behalf of customers.  SEC

January 22, 2015

Florida-based engineering and construction firm The PBSJ Corporation (now known as The Atkins North America Holdings Corporation) agreed to pay $3.4M to settle charges of violating the Foreign Corrupt Practices Act (FCPA) by offering and authorizing bribes and employment to foreign officials to secure Qatari government contracts.  SEC

January 21, 2015

The SEC announced fraud charged and an asset freeze against Fort Lauderdale, Florida-based investment advisory firm Elm Tree Investment Advisors LLC, and its founder and manager Frederic Elm, in a scheme that raised more than $17M since November 2013.  According to the SEC, Elm and his company misled investors and used most of the money raised to make Ponzi-like payments to the investors while treating the funds as a “personal piggy bank,” to purchase a $1.75M home, luxury automobiles, and jewelry, and to cover daily living expenses.  SEC
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