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Financial and Investment Fraud

This archive displays posts tagged as relevant to financial and investment fraud. You may also be interested in the following pages:

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August 16, 2019

Brokers Cantor Fitzgerald & Co. and BMO Capital Markets Corporation will pay, respectively, $647,000 and $3.9 million to resolve allegations that they marketed pre-released American Depositary Receipts (ADRs) when they should have known that the transactions were not backed by foreign shares.  SEC

August 16, 2019

In a consent judgment, Hani Zeini, formerly the CEO of California-based silicone breast implant company Sientra, Inc., has been ordered to pay a $160,000 civil penalty to settle charges that he concealed damaging news in advance of a $60 million stock offering by the company in 2015.  Specifically, as the offering was preparing to close, Zeini learned that the Brazilian company that was Sientra's sole source for implants had lost a regulatory approval, but concealed that information from the underwriter and the company's general counsel.  When the news became public the day after the offering closed, Sientra's stock price fell over 50%.  SEC

Catch of the Week — Yukom Communications and Others Face CFTC Claims of Binary Options Fraud

Posted  08/16/19
computerized trading
The Commodity Futures Trading Commission filed suit against five entities and four individuals on August 12, 2019, in the Northern District of Illinois for running a $103 million fraudulent binary options scheme. The defendants, led by Israeli company Yukom Communications Ltd.,which marketed binary options using two websites known as BinaryBook and BigOption. In recent years, the CFTC has targeted fraudulent binary...

August 13, 2019

The SEC has charged and fined a New York broker-dealer, Canaccord Genuity LLC, of enabling over-the-counter (OTC) securities to be traded without adequate review required by the Exchange Act Rule 15c2-11.  Despite playing a critical gatekeeping role of protecting investors from fraud, Canaccord delegated the requisite review to a compliance associate who lacked necessary experience and training.  Canaccord has consented to the SEC’s cease and desist order, revised internal policies and procedures, and agreed to pay a $250,000 penalty.  SEC

July 25, 2019

Douglas MacKinnon of Buffalo, New York, and associated individuals and entities in the debt collection business, including Northern Resolution Group, LLC, Enhanced Acquisitions LLC, Delray Capital, LLC, and Mark Gray, will pay more than $66 million in restitution and penalties in a settlement reached with New York state and the Consumer Financial Protection Bureau.  The companies routinely engaged in unlawful and predatory debt collection practices, including: misrepresenting to consumers that they owed sums they did not owe or were not obligated to pay, or that the companies did not have a legal right to collect; falsely threatening consumers with legal action that the collectors had no intention of taking; and, impersonating law enforcement and other government officials.  The settlement permanently bans MacKinnon and Gray and their defendant companies from the debt collection industry. CFPB, NY

Constantine Cannon Partner Mary Inman Weighs in on Standard Chartered Allegations

Posted  07/23/19
Flag of Iran
London partner Mary Inman was quoted in articles regarding recent allegations that British banking and financial services company Standard Chartered (StanChart) handled more than $56 billion dollars in illegal transactions with entities connected to Iran. The allegations are spelled out in a whistleblower suit against StanChart originally filed in 2012, voluntarily dismissed, and then refiled in late 2018. The...

July 22, 2019

Credit reporting company Equifax has agreed to pay up to $700 million to resolve claims related to its 2017 data breach in a global settlement with the FTC, the CFPB, and 50 U.S. states and territories.  The settlement will be entered as a stipulated judgment in civil action pending against Equifax, alleging that Equifax failed to take adequate steps to secure its network and consumer data, despite being warned of network vulnerabilities, resulting in a hack that exposed the private information of almost 150 million people.  The settlement provides that defendant will pay between $300 million and $425 million to compensate affected consumers, in addition to a $100 million penalty to the CFPB and $175 million to the states.  Equifax also agreed to take specified steps to improve information security, subject to review by an independent third party.  FTC; CFPB; AG CA; AG NY; AG PA

July 22, 2019

Microsoft’s Hungarian subsidiary, Microsoft Magyarország Számítástechnikai Szolgáltató és Kereskedelmi Kft., has agreed to pay a $8.7 million to the DOJ and $16.6 million to the SEC to settle allegations of violating the Foreign Corrupt Practices Act.  From 2013 to 2015, executives at Microsoft Hungary falsely represented to Microsoft that steep discounts were necessary for resellers of software licenses to the Hungarian government.  However, the resellers did not pass on the discounts to the Hungarian government, and used them for instead unspecified corrupt purposes.  DOJ; USAO SDNY; SEC

July 19, 2019

Kelvin Ramirez of Houston, Texas, was ordered to pay more than $2.9 million – $2.2 million as a civil penalty, and $736,000 in restitution – in a default judgment that also permanently barred him from trading in any CFTC-regulated market or registering with the CFTC.  Ramirez solicited clients through social media platforms, offering bogus forex trading schemes.  CFTC

July 18, 2019

Swapnil Rege, who worked as a portfolio manager for a hedge fund that operated as a commodity pool operator, was been ordered by the CFTC  and SEC to pay a $100,000 civil penalty and disgorge a $600,000 performance bonus he received as a result of his fraudulent mismarking the valuations of interest rate swaps.  The mismarking, accomplished through various means, artifically inflated the profitability of his trades, earning him a larger performance bonus.  SEC, CFTC
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