Financial and Investment Fraud
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September 28, 2021
Interactive Brokers LLC has been ordered to pay $1.75 million in civil monetary penalty and $82.57 million in restitution for violating CFTC Regulation 166.3 in failing to supervise the handling of customer accounts. According to the CFTC, Interactive Brokers was aware of the possibility of negative oil futures prices but failed to prepare and configure its electronic trading system to display those prices or allow customers to place buy and sell orders with negative-priced limits. Subsequently, customers suffered losses in excess of $82.57 million. CFTCSeptember 27, 2021
Citibank, N.A. and Citigroup Global Markets Limited, which are provisionally registered swap dealers, will pay a $1 million civil penalty to resolve allegations that they failed to properly report Legal Entity Identifier information to a swap data repository as required by applicable regulations. In addition, Citi was found to have supervisory failures and to be out of compliance with a prior 2017 order on related matters. CFTCSeptember 27, 2021
Wells Fargo Bank, N.A. will pay $72.6 million to resolve claims that it violated the Financial Institutions Reform Recovery and Enforcement Act (“FIRREA”) by overcharging commercial customers from 2010 to 2017 for foreign exchange (“FX”) service. The government alleged that the bank fraudulently marked up the prices on currency it was selling and marked down the prices on currency it was buying, and concealed those markups from customers through various misrepresentations and deceptive practices. The total settlement includes a $37.3 million civil penalty and forfeiture, as well as $35.3 million in restitution to customers. USAO SDNYSeptember 24, 2021
The former pastor of the Church of the Healthy Self has been sentenced to 14 years in federal prison and ordered to pay over $22.5 million in restitution for orchestrating an investment scam that defrauded church members of more than $33 million over a five-year period. To solicit investments for the church’s investment arm, CHS Trust, church representatives under Kent Whitney’s direction appeared on television and live seminars and made false and misleading statements that were often recorded and uploaded to YouTube. The statements included guaranteeing a 12% annual rate of return and return of principal with no risk, and claiming that the trust was audited by KPMG. USAO CDCASeptember 24, 2021
London-based advertising company WPP plc, which has ADRs registered in the US, will pay $19 million in disgorgement, interest, and penalties to resolve allegations that it violated the Foreign Corrupt Practices Act. The SEC charged that WPP acquired advertising agencies in high-risk markets and failed to insure that these subsidiaries implemented appropriate internal controls or respond to repeated warning signs and internal complaints about activities including payments to government officials in India, China, Brazil, and Peru. SECSeptember 24, 2021
An anonymous whistleblower received an award of $36 million from the SEC. The SEC found that the individual provided information that significantly contributed to a previously-opened SEC investigation and recoveries by the SEC and another agency. The SEC found that the individual had unreasonably delayed in reporting the conduct, and had participated in the underlying scheme, although they did not direct, plan, or initiate it. Two other claimants were denied any recoveries on the grounds that the information they provided did not significantly contribute to the recoveries in the covered action or related action. SECThe Evergrande Crisis Shows the Need for Greater Regulatory Oversight of the OTC Markets
Posted 09/23/21
