Financial Institution Fraud Archives - Page 6 of 36

March 4, 2022

Venture capital fund adviser Alumni Ventures Group, LLC and its CEO Michael Collins have agreed to pay civil penalties totaling $800,000, and have returned $4.8 million to affected funds to resolve claims that they made misleading representations about AVG’s fees, and made inter-fund loans and transfers in violation of the funds’ respective operating agreements. The SEC alleged that while AVG told customers that its management fee was the “industry standard ‘2 and 20.,” its practice was different from the industry standard in that it assessed the entire 20 percent in management fees – that is, 10 years’ worth of management fees of two percent per annum – upfront at the time an investor made the capital contribution. SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Misrepresentations,

March 3, 2022

City National Rochdale, LLC agreed to a civil penalty just over $30 million to resolve SEC allegations that the registered investment adviser failed to disclose to discretionary account clients that it invested their assets in proprietary mutual funds that generated fees for CNR and its affiliates, rather than in competitor funds whose fees may be lower. The government also alleged that CNR failed to fully inform certain prospective customers of fees with respect to its proprietary funds. The disclosure failures resulted in an undisclosed conflict of interest according to the SEC. SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Misrepresentations, Regulatory Violations, Securities Fraud,

February 24, 2022

The National Bank of Pakistan and its New York branch will pay a total of $55.4 million to resolve investigations by the New York State Department of Financial Services and the Federal Reserve Bank of New York into Bank Secrecy Act/Anti-Money Laundering compliance deficiencies. The bank had previously entered into agreements with the government entities, acknowledging BSA/AML weaknesses and agreeing to undertake remedial measures. However, the bank had failed to undertake adequate remedial measures, as found in examinations by the government entities. NY DFS; Fed

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Money Laundering,

Top Ten SEC and CFTC Recoveries of 2021

Posted 01/7/22

As we recently detailed, 2021 proved to be a blockbuster year for whistleblowers under the CFTC and SEC Whistleblower Programs. Seven of the ten largest whistleblower awards of 2021 were made to SEC and CFTC whistleblowers, including a massive $200 million CFTC award that was roughly twice as large as all prior CFTC awards combined. In total, the SEC paid more awards—both in total dollars and individual...

Tagged in: Accounting Fraud, CFTC Whistleblower Reward Program, Cryptocurrency, Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Misrepresentations, Money Laundering, Regulatory Violations, SEC Whistleblower Reward Program, Securities Fraud, Top 10,

Top Ten Whistleblower Awards of 2021

Posted 01/6/22

2021 was another banner year for whistleblowers, who once again collectively recovered billions of dollars for the government and hundreds of millions of dollars in whistleblower rewards under the various government whistleblower programs. This includes awards under the qui tam provisions of the federal False Claims Act and various state False Claims Act programs. It includes awards under the Dodd-Frank SEC...

Tagged in: Anti-Kickback and Stark, Auto Safety, CFTC Whistleblower Reward Program, FCA Federal, FCA State, Financial and Investment Fraud, Financial Institution Fraud, Healthcare Fraud, Importance of Whistleblowers, Medical Billing Fraud, Medicare, SEC Whistleblower Reward Program, Securities Fraud, Top 10, Whistleblower Case, Whistleblower Rewards,

December 21, 2021

Financial services firm NatWest Markets Plc has pleaded guilty to charges related to its manipulation of the market for U.S. Treasury futures contracts and for the purchase and sale of U.S. Treasury securities in the secondary (cash) market. NatWest will pay approximately $35 million in criminal fines, restitution, and forfeiture. The government charged that NatWest traders engaged in spoofing by placing orders with the intent to cancel those orders before execution in order to artificially push up or down the prevailing market price. DOJ; USAO CT

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Financial Institution Fraud, Market Manipulation and Trading Violations,

December 20, 2021

Private equity fund adviser Global Infrastructure Management, LLC will pay a $4.5 million civil penalty to resolve SEC charges that the company overcharged clients by failing to offset certain portfolio company fees against management fees charged to clients, as it was required to do under the offering and governing documents. Global has previously repaid $5.4 million to affected clients. SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Misrepresentations,

December 17, 2021

J.P. Morgan Chase entities, including broker-dealer J.P. Morgan Securities LLC, will pay a total of $200 million -- $125 million as an SEC penalty and $75 million as a CFTC penalty -- to resolve claims that firm employees communicated both internally and externally on unapproved channels, failed to preserve written communications, and failed to supervise. Defendants admitted that employees, including senior and supervisory employees, regularly and openly communicated about business using personal devices, text messages, WhatsApp, and other private messaging, none of which were preserved by the firm, in violation of recordkeeping requirements. As a result, J.P. Morgan entities were unable to provide information in response to subpoenas and information requests from regulators. SEC; CFTC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Fraud in CFTC-Regulated Markets, Regulatory Violations, Securities Fraud,

December 15, 2021

Broker-dealer Wedbush Securities Inc. has agreed to pay $1.2 million to resolve allegations related to the unregistered sale of large blocks of 50 different low-priced microcap companies by Silverton SA, a former offshore customer. The SEC also found that Wedbush failed to file SARs for certain suspicious transactions that it executed for Silverton, despite the presence of numerous red flags. SEC

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Money Laundering, Regulatory Violations,

November 22, 2021

Seven financial institutions – Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, NatWest Markets Securities Inc., and Washington Mutual Mortgage Securities Corp. – have agreed to collectively pay $32.5 million to resolve claims by New Mexico that the banks did not adequately disclose the characteristics of certain mortgage-backed securities sold to New Mexico pension funds and a state-run investment council between 2003 and 2010. The settlement resolves a qui tam action under the New Mexico Fraud Against Taxpayers Act brought by Integra REC, LLC. NM

Tagged in: FCA State, Financial Institution Fraud, Housing and Mortgage Fraud, Whistleblower Case,

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