Financial and Investment Fraud
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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 VANovember 21, 2019
Jin K. Chung was sentenced to 10 years in prison following his guilty plea on charges related to a foreign exchange trading scam he created and ran. Chung started two companies, SNC Asset Management, Inc., and SNC Investments, Inc., advertising them as highly successful foreign exchange trading firms and promising investors annual returns between 24% and 36%. Hundreds of individual investors opened accounts with SNC; Chung deposited their money bank accounts he controlled and sent them phony statements. In his guilty plea, Chung acknowledged that more than 400 victims lost over $60 million as a result of his scam. Chung was originally charged in 2009, but not extradited from South Korea until 2019. USAO ND CalNovember 15, 2019
Three whistleblowers who jointly submitted a tip to the SEC were awarded $260,000. The information provided by the unidentified whistleblowers lead to a successful enforcement action against a fraud that targeted retail investors. The whistleblowers were reported to be investors who were themselves harmed by the conduct. SECCFTC Whistleblower Program Annual Report Shows Program Open for Business, yet Challenges Persist
Posted 11/15/19
- $7 million to one individual whistleblower;
- Over $2 million to a non-insider whistleblower who provided independent analysis of market data; and,
- Close to $1.5 million to a...
November 14, 2019
Veritaseum, Inc. and Veritaseum, LLC, together with their owner Reginald Middleton, agreed to pay $9.5 million to resolve claims of fraudulent conduct in their VERI Initial Coin Offering. Defendants were alleged to have misrepresented the potential profitability and viability of Veritaseum's purported operations, the use of funds raised in the VERI ICO, and the amount of funds raised in the VERI ICO. Middleton was further alleged to have engaged in conduct to manipulate the price of VERI. Defendants will disgorge $7.9 million in gains, plus interest, and Middleton will pay a $1 million civil penalty. SECSecond Circuit Upholds SEC Denial of Whistleblower Rewards to Three Claimants in Deutsche Bank Settlement
Posted 11/13/19
November 8, 2019
Wells Fargo Bank, N.A. will pay $14.475 million -- a $10 million penalty, and $4.475 million in restitution -- to resolve CFTC charges related to the bank's actions in a single 2014 FX forward contract trade valued at approximately $4 billion. The contract required Wells Fargo to calculate the price based on a weighted average spot rate on the relevant day. However, Wells Fargo had no system in place to accurately determine such a rate, but rather that inform the counterparty of that fact, Wells Fargo simply picked a rate it believed was in the range and provided the counterparty with a false spreadsheet that purported to calculate the rate but that did not, in fact, reflect relevant trades. CFTCIn Second-Ever Enforcement Action of Its Kind, SEC Stands with Whistleblower Against Company’s Attempt to Muzzle Reporting
Posted 11/8/19
