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Financial and Investment Fraud

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December 12, 2019

Two oil and gas executives have settled insider trading charges with the SEC by agreeing to pay nearly $6 million in civil penalty, disgorgement, and prejudgment interest.  The two, John Davidson and John Special, allegedly purchased shares of medical device company, Covidien PLC, upon learning non-public information about a potential merger with Medtronic PLC.  When news of the merger was officially released, investment accounts controlled by the men earned over $1 million in illicit gains.  SEC

December 10, 2019

Internet service provider CenturyLink has entered into a $6.1 million settlement with the State of Washington, resolving allegations that the company added charges to customer bills without accurately disclosing those fees, and failed to provide discounts promised by sales agents.  While $900,000 of the settlement will be immediately distributed to affected customers, the remainder will be held pending resolution of a nationwide class action against the company.  WA

December 9, 2019

Colorado resident Jeffrey O. Friedland and two companies associated with him, Intiva Pharma LLC and Global Corporate Strategies LLC, have entered into a $4.2 million settlement -- $2.1 million in disgorgement plus a $2 million penalty and prejudgment interest -- with the SEC, resolving charges that Friedland and his companies fraudulently promoted the stock of cannabis company OWC Pharmaceutical Research Corp.  Friedland and his companies were alleged to have misrepresented their ownership interest in OWC, as well as Friedland's compensation in OWC stock in exchange for his promotion of the shares.  SEC

December 9, 2019

Former U.S. Representative Christopher Collins, his son Cameron Collins, and the father of Cameron Collins’ former girlfriend, Stephen Zarsky, have settled insider trading charges with the SEC.  While serving on the board of Australian biotech company Innate Immunotherapeutics Ltd., the elder Collins learned about the impending release of negative test results for a multiple sclerosis drug.  His subsequent disclosure to his son, and his son’s disclosure to Zarsky, led the three to sell $700,000 worth of Innate shares before news hit the market.  Defendants will disgorge approximately $700,000, and have pleaded guilty to related criminal charges.  SEC

December 9, 2019

Broker-dealer Jefferies LLC has agreed to pay $4 million to settle allegations of improperly handling pre-released American Depository Receipts (ADRs), a form of securities that represent foreign shares in a foreign company.  Despite knowing that requisite corresponding foreign shares were unavailable, Jefferies improperly borrowed pre-released ADRs from other brokers and failed to properly supervise personnel about these borrowing practices.  SEC

December 6, 2019

Telefonaktiebolaget LM Ericsson (“Ericsson”) has agreed to pay more than $1 billion to resolve DOJ and SEC allegations that its subsidiaries engaged in a large-scale bribery scheme, in violation of the Foreign Corrupt Practices Act (FCPA).  The alleged misconduct occurred over a span of 16 years ending in 2016 and involved approximately $45 million in bribes paid to a consulting party in Indonesia, $31.5 million paid to third parties in China, $4.8 million paid to a consulting company in Vietnam, $2.1 million paid to government officials in Djibouti, and $450,000 paid to a consulting company in Kuwait.  To settle charges, Ericsson has entered into a deferred prosecution agreement and will pay a criminal penalty of over $520 million, as well as disgorgement and prejudgment interest of $540 million.  DOJ; USAO SDNY; SEC

December 5, 2019

Brand management company Iconix Brand Group Inc. and former top executives have agreed to settle SEC fraud charges by agreeing to pay at least $5.5 million.  The complaint against Iconix, former CEO Neil Cole, former COO Seth Horowitz, and former CFO Warren Clamen alleged that the executives profited off a fraudulent scheme that created fictitious revenue and concealed the company’s lackluster earnings, while Iconix failed to recognize false revenue and made false statements to the SEC.  Horowitz and Clamen have agreed to settle, while the charges against Cole remain pending.  SEC

November 22, 2019

BGC Financial, L.P., a futures industry voice broker and registered futures commission merchant, has agreed to pay a $3 million civil monetary penalty to resolve CFTC charges that the company did not have an adequate supervisory system and failed to adequately perform its supervisory duties, including with respect to its traditional and block trading futures brokerage businesses. In addition, BGC violated recordkeeping, reporting, and other obligations, and failed to inform the CFTC of investigations by other regulatory entities.  CFTC

November 22, 2019

The former president of Transport Logistics International, Mark Lambert, was found guilty of violating the Foreign Corrupt Practices Act for his role in a bribery scheme designed to secure a contract for TLI from JSC Techsnabexport (TENEX), a subsidiary of Russia’s State Atomic Energy Corporation.  According to the evidence at trial, Lambert worked for years to direct payments to TENEX official Vadim Mikerin, using offshore accounts and creating fake invoices.  Lambert faces five years in prison.  TLI previously agreed to pay a $2 million penalty; Mikerin previously pleaded guilty on related charges.  USAO MD

November 22, 2019

South Korea-based Samsung Heavy Industries Company Ltd. will pay $75 million in a global settlement of allegations that it engaged in an unlawful scheme to bribe government officials in Brazil.  Half of the total settlement, $37.74 million, will be paid to resolve a U.S. criminal action that the company violated the Foreign Corrupt Practices Act; the other half will be paid either to Brazilian authorities on or before November 25, 2020, or to the U.S.  Samsung was alleged to have paid millions to a Brazil-based intermediary, knowing and intending that those funds would be used to bribe officials at the Brazilian state-owned Petrobras in order to obtain a shipbuilding contract for Samsung.  DOJ; USAO ED VA
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