Financial and Investment Fraud

February 23, 2021

Cryptocurrency trading platform Bitfinex, operated by iFinex, and Tether were ordered to end all trading activity for NY customers and agreed to pay $18.5 million in penalties following an investigation into their handling of customer deposits and withdrawals that resulted in the loss of hundreds of millions of customer assets.  Tether was found to have falsely represented that each of its stablecoins was backed one-to-one by U.S. dollars in reserve when, in fact, they were not.  NY

February 23, 2021

Chicken producer Pilgrim’s Pride Corporation has pleaded guilty to criminal antitrust violations and agreed to pay a fine of $107 million.  According to the plea agreement, Pilgrim’s participated in a conspiracy to fix prices and rig bids for broiler chicken products and thereby suppress and eliminate competition. DOJ

February 19, 2021

The SEC has awarded two whistleblowers a total of almost $3 million for alerting the agency to misconduct.  The first award of over $2.2 million went to an individual whose information helped bring a successful enforcement action to an open investigation.  The second award of almost $700,000 went to an individual whose tip about a fraudulent reporting scheme helped launch an investigation.  SEC

February 16, 2021

Nigerian national Obinwanne Okeke was sentenced to ten years in prison on charges arising from his role in a computer-based fraud scheme that caused an estimated $11 million in losses.  Okeke’s fraud included unauthorized access via email compromise to the computer systems of a division Caterpillar, from which defendant directed fraudulent wire transfers supported by fake invoices.  USAO ED VA

February 12, 2021

Registered investment advisor and broker-dealer Winslow, Evans & Crocker, Inc. will pay $1.9 million in disgorgement, interest, and penalties to resolve allegations regarding its mutual fund share class and cash sweep selection practices.  Winslow allegedly recommended mutual fund share classes and money market funds to its customers without adequately disclosing that it received 12b-1 fees and revenue-sharing payments in connection with those shares and funds, when lower-cost share classes and options were available.  SEC

February 12, 2021

General Motors (GM) has agreed to a $5.75 million settlement with the State of California to resolve allegations of making false and misleading statements to investors, including the state’s largest pension system, California Public Employees’ Retirement System (CalPERS).  According to Attorney General Xavier Becerra, GM cheated California twice—first by failing to disclose a faulty ignition-switch issue to the National Highway and Traffic Safety Administration (NHTSA) that it had been aware of for almost ten years, and which ultimately led to 124 fatalities and 274 injuries, and second by concealing the problem from investors and failing to build reserves for losses it knew was coming.  The company’s actions artificially inflated its stock price, causing CalPERS to lose millions of dollars.  CA AG

February 5, 2021

Private equity fund ACP X, LP, its manager Laurence Allen, and other corporate entities owned and controlled by Allen including NYPPEX Holdings, LLC, have been ordered to pay nearly $7 million.  Allen allegedly used investor funds to pay himself and others exorbitant salaries and cover the expenses of Allen’s affiliated entities, contrary to representations to investors.  A receiver was appointed to wind down the fund.  NY

February 2, 2021

Premier Holding Corp., a microcap issuer which described itself as a green energy services provider, and its former CEO, Randall Letcavage, have been ordered to pay a total of $10.5 million in disgorgement, penalties, and interest in connection with judgment finding that defendants materially mislead investors about the value of Premier’s assets and perks paid to Letcavage.  SEC