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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:

Page 11 of 91

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,

September 2, 2022

Swapnil Rege, SwapStar Capital LLC, and Reema Rege have been ordered to pay $5 million in disgorgement and pre-judgment interest for engaging in fraudulent solicitation and misappropriation, including on Swapnil’s part, engaging in trading despite an existing bar for prior violations, and on Reema’s part, receiving illegally-obtained profits she was not entitled to.  The orders resulted from parallel but separate enforcement actions by the CFTC and SEC, and included a permanent trading and registration ban against Swapnil.  CFTC; SEC

Tagged in: Financial and Investment Fraud, Fraud in CFTC-Regulated Markets, Regulatory Violations, Securities Fraud,

August 24, 2022

Taronis Technologies, Inc. and related entities have agreed to pay a total of $5.1 million in disgorgement and interest to resolve allegations that the companies issued false and misleading statements claiming to have agreements and relationships with customers that did not exist or were exaggerated.  Taronis executives created fake and backdated orders, resulting in improper revenue recognition.  Based on these misstated financials, defendants raised approximately $30 million from investors in private placements.  SEC

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

August 10, 2022

Angel Oak Capital Advisors and its portfolio manager Ashish Neghandi will pay $1.75 million and $75,000 respectively to settle charges of misleading investors via their $90 million securitization of home renovation loans. When delinquency rates on their “fix-and-flip” loans increased unexpectedly, rather than accelerating return payments to certain investors, as contractually required, defendants artificially reduced delinquency rates by diverting borrowers’ funds to pay down outstanding loan balances. SEC

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

August 3, 2022

Arthur Merson will spend 15 months in prison and will pay over $3.4 million in restitution for his scheme to defraud investors by conspiring to commit wire fraud. Merson acted as an intermediary between investors and the principal co-conspirators, representing to investors they could receive a portion of the value of multi-million-dollar Standby Letters of Credit with a minimal investment, and would reap multiples of their investment in a matter of weeks. In 2017 and 2018, Merson lied to investors, calling himself an independent consultant who would receive only a small finder’s fee for his efforts, when in reality he had significant financial interest in the investments and affirmatively misled investors when responding to their inquiries. USAO ME

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations,

August 2, 2022

Crown Bridge Partners, Soheil Ahdoot, and Sepas Ahdoot, will pay more than $9 million for operating as unregistered securities dealers, and are required to surrender all conversion rights, unexercised warrants, and cancel any shares acquired by converting notes or exercising related warrants resulting from their fraud. Over a 5-year period, from 2016 to 2020, the defendants bought convertible notes, converted them into billions of newly issued shares of heavily-discounted stock, and sold the new shares at significant profit, all while not being registered as dealers with the SEC, skirting regulatory oversight. Defendants are subject to a 5-year penny stock bar in addition to the monetary penalties. SEC

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

July 29, 2022

Aegis Capital Corp., and two of its former representatives, Alan Z. Appelbaum and Paul F. Gallivan will pay around $2.5 million total for making materially false and misleading statements and making unsuitable investment recommendations, namely, variable interest rate structured products. Appelbaum, Gallivan, and 14 Aegis brokers recommended these highly complex and risky products to customers with “moderate” risk tolerance, despite having investment timelines inconsistent with the VRSP maturity dates. The targeted customers’ financial needs were disregarded, as were their risk tolerance, investment objectives, age, investment experience, and liquidity needs. SEC

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

July 29, 2022

First American Payment Systems—a merchant payment processing provider—and two sales affiliates have been ordered to return $4.9 million to businesses harmed by FAPS’ hidden terms, surprise exit fees, and zombie charges. FAPS’ preyed mostly on merchants with limited English proficiency, promising low costs and an easy exit, but hit them with surprise fees and illegal charges when the customers tried to get out. In addition to the monetary penalty, FAPS is required to stop misleading customers about fees and pricing, stop unauthorized bank withdrawals, make service cancellation easier, and stop charging early termination fees. FTC

Tagged in: Financial and Investment Fraud, Misrepresentations,

July 28, 2022

Jaeson Birnbaum, disbarred attorney and owner of now-bankrupt litigation finance firm, Cash4Cases, will spend 3 years in prison for defrauding investors, in addition to paying over $2.6 million in restitution, and forfeiting another $2.6 million in fraud proceeds. Birnbaum offered sham “Investor Security Agreements,” allowing investors to share in recoveries from lawsuits supposedly purchased by Cash4Cases. Birnbaum netted over $3 million in investors’ funds through his fraud, misappropriated client funds for personal use, and directed his employee to falsify the company’s books and records to show already-paid-out funds as still available to be pledged as collateral to new investors. USAO SDNY

Tagged in: Accounting Fraud, Criminal Proceedings, Financial and Investment Fraud, Ponzi Schemes, Regulatory Violations, Securities Fraud,

July 28, 2022

U.S. Bank will pay a $37.5 million penalty and is required to make harmed customers whole for illegally accessing their credit reports and opening new, unauthorized accounts in these customers’ names. The bank’s actions violated the Consumer Financial Protection Act, the Fair Credit Reporting Act, the Truth in Lending Act, and the Truth in Savings Act. The bank pressured its employees to hit certain sales goals and implemented an incentive-compensation program that financially rewarded employees for selling bank products. As a result, the bank’s customers held unwanted accounts, had negative effects on their credit profiles, and lost control over their personally identifiable information—not to mention the time-consuming hassle of closing unauthorized accounts and resolving other consequences stemming from this practice.  CFPB

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Regulatory Violations,

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