Financial and Investment Fraud

December 7, 2020

The SEC has granted awards to five whistleblowers whose disclosures led to three successful enforcement actions.  The first award of $1.8 million was granted to a company insider who gave information about fraudulent conduct that would have been difficult to detect otherwise.  The second award of $750,000 was granted to two whistleblowers, one of whom received a waiver on TCR filing requirements by providing a tip that prompted an investigation, and the other who provided new information that resulted in additional actions being added.  The last award of $400,000 was also granted to two whistleblowers; the two individuals had provided analysis that prompted an investigation.  SEC

December 2, 2020

Energy company SCANA Corp. has agreed to pay a $25 million penalty to settle SEC charges of defrauding investors.  SCANA and its subsidiary, South Carolina Electric & Gas Co. (SCE&G), have also agreed to pay $112.5 million in disgorgement.  According to the SEC, SCANA, SCE&G, and top executives Kevin Marsh (former CEO) and Stephen Byrne (former executive VP) defrauded investors by making false and misleading statements concerning a nuclear power plant expansion that they said would qualify the company for more than $1 billion in tax credits.  However, defendants knew the project was far behind schedule and likely to be scrapped.  The false statements led investors to buy more than $1 billion in bonds, and caused millions of dollars in losses when the project was ultimately scrapped in mid-2017.  DOJ; SEC

December 1, 2020

The SEC has awarded two whistleblowers over $6 million for providing information and assistance that led to multiple successful enforcement actions by the SEC and another government agency and the forfeiture of tens of millions of dollars in ill-gotten gains.  SEC

November 30, 2020

An attorney in Pennsylvania who defrauded his own clients through a $2.7 million Ponzi scheme has been sentenced to 6.5 years in prison and ordered to pay over $2.1 million in restitution and $273,091 in forfeiture.  In pleading guilty earlier this year, Todd Lahr admitted to soliciting investments from his clients for business opportunities that didn’t actually exist—including property leases in Europe and mining operations in Papua New Guinea—and then using the money that he didn’t spend on personal expenses to pay prior investors.  The monetary penalty in this criminal action will be offset by the final judgment obtained by the SEC in June; in the parallel civil action with the SEC, Lahr was ordered to pay over $1.1 million in disgorgement and pre-judgment interest.  DOJ; USAO EDPA

November 19, 2020

A whistleblower who reported securities fraud occurring overseas has been awarded over $900,000 by the SEC.  According to the agency, an investigation into the misconduct was already underway, and the whistleblower’s timely tip led to a significant expansion of the investigation.  SEC