Financial and Investment Fraud

June 22, 2021

Loci Inc., whose InnVenn platform provides intellectual property search services for inventors and others users, will pay $7.6 million to resolve SEC charges arising from its unregistered initial coin offering of "LOCIcoins."  In the course of the ICO, Loci and its CEO John Wise allegedly misrepresented the company’s revenues, number of employees, and InnVenn’s user base. SEC

June 21, 2021

The SEC has issued awards totaling nearly $5.3 million to whistleblowers whose information caused the SEC to launch investigations that ultimately resulted in successful enforcement actions.  In the first award, a whistleblower received nearly $4 million for extraordinary assistance, including providing documents, identifying witnesses, and participating in hours of interviews.  In the second award, three whistleblowers received about $1.3 million for providing ongoing assistance that conserved agency time and resources.  SEC

June 15, 2021

Real estate settlement services company First American Financial Corporation will pay a penalty of $487,616 to resolve allegations that the publicly-traded company released incomplete information about a cybersecurity vulnerability in its document sharing platform that exposed over 800 million document images dating back to 2003, including images containing sensitive personal data such as social security numbers and financial information. The SEC charged that First American had deficient disclosure controls that left senior management unaware of the company's earlier discovery of the vulnerability and its attempts to remediate it.  SEC

June 14, 2021

The SEC has awarded approximately $3 million to two whistleblowers whose separate tips led to a successful enforcement action.  According to the press release, the first whistleblower’s early tip helped agency staff develop its case and focus its resources, while the second whistleblower helped uncover misappropriated funds and fraudulent transfers.  SEC

June 3, 2021

A man in Kansas, Christopher Matthew Meredith, has been ordered to spend 14 years in prison and pay over $6.8 million in restitution for defrauding investors to his company, Strategic Pharma, Inc. (SPI).  In addition to failing to disclose that he was under investigation for an investment fraud scheme in Florida, Meredith had falsely represented to investors that SPI had entered into lucrative agreements, including with the Department of Veterans Affairs, that would result in substantial revenue for SPI.  USAO WDTX

June 2, 2021

The SEC awarded $23 million to two individuals who voluntarily provided information as whistleblowers that led to recoveries by the SEC and another federal agency in related enforcement actions. Information provided by the first whistleblower, who received approximately $13 million, initiated the investigations.  The second whistleblower, who waited several years before coming forward, provided additional information that substantially contributed, and was awarded approximately $10 million.  Both provided ongoing assistance to the Commission and the other agency, providing documents, participating in interviews, and identifying key individuals and systems involved in the investigations.  SEC

May 28, 2021

Eric Pulier, who previously served as an executive at ServiceMesh, Inc., which later merged with Computer Sciences Corporation (CSC), entered into a consent judgment for $4.8 million in disgorgement, civil penalties, and interest.  The judgment resolved an SEC action alleging that Pulier paid more than $2 million in bribes to executives at the Commonwealth Bank of Australia to secure business for CSC.  Securing the Australia business entitled ServiceMesh to a $98 million earn-out payment from the CSC acquisition, and Pulier was personally entitled to $30 million of that earn-out.  SEC