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Misrepresentations

This archive displays posts tagged as relevant to fraudulent misrepresentations in financial transactions and financial markets. You may also be interested in the following pages:

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January 24, 2023

A former energy company executive accused of defrauding investors of more than $15 million and misappropriating investor funds has been sentenced to 5 years in prison after pleading guilty to wire fraud.  While serving as the executive chairman and managing partner of Citadel Energy, which supposedly helped oil and gas companies with fluid management, Joey Stanton Dodson made false and misleading representations and omissions to investors concerning the intended use of their funds and his own compensation.  After obtaining over $15.6 million from over 50 investors, Dodson misappropriated $1.3 million into his own accounts, and used some of it to repay investors of unrelated entities.  DOJ

December 21, 2022

Precious metals firm Monex Deposit Company, together with related entities and individual owners, have been ordered to pay a civil penalty of $5 million, and customer restitution of $33 million, to resolve claims arising from the defendants’ operation of a retail over-the-counter trading platform, known as “Atlas,” which allowed customers to speculate on precious metals price movements, with Monex acting as the counterparty to every transaction. While the defendants claimed in marketing that leveraged trading of precious metals was highly profitable, in fact, the majority of the trades resulted in losses for customers.  CFTC

November 21, 2022

Michael and Betsy Feinberg, owners of Catharon Software Company and who lied about having developed software capable of generating large returns for investors and philanthropists, will spend 5 years in prison and pay restitution for the $5 million in victim losses. The software, called VDelta, was in fact not under development, yet over a period of 15 years, the Feinbergs lied to investors with false promises about the software’s completion, release date and capabilities. Their investors were comprised mostly of the Feinbergs’ friends and associates located in Sedona, Arizona. The stolen funds were used to pay the Feinbergs’ salaries and to pay for personal expenses. USAO AZ

November 1, 2022

Two Florida-based companies and their owners have been ordered to pay more than $24.8 million for violating the state Consumer Protection Act by sending 232,091 deceptive letters to more than 15,000 small business owners in Washington State, resulting in $1.3 million in payments to the fraudsters.  The letters by CA Certificate Service and Labor Poster Compliance appeared to originate from the government and demanded payment for certificates or posters that were implied to be mandatory, but were in fact available free of charge from state and federal agencies.  Although the nationwide fraud scheme resulted in $5.3 million in losses around the country, this is the first judgment against the defendants.  WA AG

October 28, 2022

An Illinois lawyer who defrauded victims in multiple states has been sentenced to nine years in prison and ordered to pay restitution and forfeiture of $2 millionHassan Abbas of Belgium and Lebanon was convicted of using his license to scam victims through a series of fake romance, real estate, and business email compromise (BEC) scams.  Once he received the money, Abbas wired funds to co-conspirators located abroad, and kept a cut for himself, which he spent on international travel and luxury goods.  USAO MA

October 24, 2022

Cetera Advisors, LLC and Cetera Advisor Networks, LLC were ordered to pay over $8.5 million in disgorgement, prejudgment interest, and civil penalties combined. Defendants breached their fiduciary duty to their retail advisory clients by not disclosing compensation-related conflicts of interest. SEC

October 17, 2022

In one of New Jersey’s largest civil monetary recoveries ever, Credit Suisse Securities (USA) LLC, Credit Suisse First Boston Mortgage Securities Corp., and DLJ Mortgage Capital, Inc. (collectively, “Credit Suisse”) has agreed to pay $495 million to settle a lawsuit involving misrepresentations it made to investors on the risks of residential mortgage-backed securities (RMBS) in the years leading up to the 2008 financial crisis.  Approximately $100 million will resolve a civil monetary penalty, while another $300 million will be allocated toward restitution for victims nationwide.  Although Credit Suisse previously settled with DOJ for $5.28 billion and with New York for $10 million, the New Jersey settlement is the first to provide restitution.  NJ AG

September 22, 2022

The Boeing Company and its former CEO, Dennis A. Muilenburg, have agreed to pay $200 million and $1 million respectively, in order to resolve SEC charges of making materially misleading statements to investors following crashes of two 737 MAX planes in 2018 and 2019.  Despite knowing the MCAS system at fault would be an ongoing safety issue, Boeing and Muilenburg repeatedly assured investors and the public otherwise.  SEC

September 19, 2022

Sparkster Ltd. and its CEO, Sajjad Daya, have agreed to pay $30 million to settle charges of offering and selling crypto asset securities called SPRK tokens that were not registered with the SEC and were not eligible for a registration exemption.  A crypto influencer, Ian Balina, was separately charged in federal court for promoting SPRK tokens on social media without disclosing that he received a 30% bonus on tokens he purchased in exchange for his posts, and for selling the tokens to an investing pool of around 50 individuals.  SEC

September 13, 2022

Uber Technologies Inc. and subsidiary Rasier LLC have paid $100 million to the New Jersey Department of Labor and Workforce Development’s Unemployment Trust Fund after the agency found that nearly 300,000 Uber drivers in the state were improperly classified as independent contractors and thus ineligible for safety net benefits.  The companies were originally assessed $523 in overdue contributions, with penalties and interest adding up to another $119 million, but contested the amount and made the payment based on a revised assessment.  NJ AG
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