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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 13, 2020

San Francisco-based fund advisor Michael Rothenberg has been ordered to pay more than $31 million for misappropriating millions of dollars in client funds.  Instead of investing clients funds in emerging technology, the head of Rothenberg Ventures LLC allegedly funneled it toward personal business ventures and events, in violation of the antifraud provisions of the Investment Advisers Act of 1940.  As part of the settlement, Rothenberg has also agreed to be barred from the securities industry for five years.  SEC

January 10, 2020

Richard Carter of Illinois has been ordered to pay $2.5 million for his role in a $1.76 million commodity pool fraud operated by Blue Guru, LLC.  According to the CFTC, from 2014 to 2018, Carter misrepresented the profitability of the commodity pool to current and prospective customers, while misappropriating customer funds, ignoring customer requests to withdraw, and lying to customers about disbursement issues.  Carter's co-defendant, Mark Slobodnik, was previously ordered to pay about $400,000, while Blue Guru was ordered to pay $7 million.  CFTC

January 9, 2020

After being charged with defrauding brokerage customers in May 2018 and pleading guilty in December 2018, a former registered investment advisor, Steven Pagartanis, has been sentenced to over 14 years in prison and ordered to pay $6.5 million for orchestrating the 18-year, $13 million fraud.  Pagartanis had targeted elderly women and promised an 8% return on investments.  However, he secretly laundered their investments and used the money on personal expenses, causing investors to lose over $9 million in total.   USAO EDNY

January 7, 2020

Behavioral Consulting of Tampa Bay (BCOTB) has agreed to pay $675,000 to settle claims alleging the autism service provider submitted false or fraudulent claims to TRICARE.  Following an audit by TRICARE's managed care support contractor, the United States launched an investigation into BCOTB's claims that revealed it had misrepresented the services that were provided, misrepresented the identity of service providers, requested payment on more units of time than reflected by records, and requested payment on services that were not substantiated by records.  USAO MDFL

December 10, 2019

The University of Phoenix and its parent company, Apollo Education Group, have agreed to resolve FTC charges through a record $191 million settlement, with $50 million to be paid in cash and $141 million in debts owed by affected students to be canceled.  The charges involved ads that gave prospective students the false impression that the university worked with major technology companies to design its curriculum and provide job opportunities.  FTC

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.  SEC

November 5, 2019

AT&T has agreed to pay $60 million to settle FTC charges of misleading customers.  From 2011 until 2014, AT&T advertised and sold “unlimited” data plans to millions of smartphone customers, but despite promises of unlimited data, it allegedly “throttled,” or reduced the data speeds, for customers on these plans after as little as 2 GBs of use.  At least 3.5 million customers were affected, all of whom will receive a credit or check for the refund amount owed as part of the settlement.  FTC

November 4, 2019

Golden California Regional Center and its principal Bethany Liou will pay over $50 million in disgorgement and interest to resolve charges of fraud in connection with their sale of interests in the GCRC Cupertino Fund, LP as securities qualifying under the EB-5 visa program.  Defendants represented that investor funds would be used to finance real estate development but, in fact, Liou diverted the funds to personal use.  SEC

October 30, 2019

Outcome Health, the trade name for ContextMedia LLC, will pay $70 million and enter into a Non-Prosecution Agreement with the U.S. to resolve allegations that the company, which sells digital advertising to be displayed in medical offices -- its primary customers are pharmaceutical companies -- fraudulently sold advertising inventory that it did not have.  To conceal this, Outcome and its executives falsified reports to customers, claiming to have delivered advertising to the contracted number of screens, and inflated patient engagement metrics.  This fraudulent activity resulted in an overstatement of Outcome's reported revenue, and Outcome used those fraudulent financial statements to obtain almost $1 billion in debt and equity financing in 2015 and 2016.   DOJ
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