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:
November 8, 2021
United States Commodity Funds LLC, a registered commodity pool operator , and United States Oil Fund LP, an exchange-traded product whose general partner is United States Commodity Funds LLC, will pay a total of $2.5 million to resolve charges by the SEC and CFTC. USO’s stated investment objective was to track changes in the spot price of oil; however, during oil market turmoil in early 2020, USO’s sole futures commission merchant told USO it would not execute any new oil futures positions for USO. As a result of this limitation, USO was restricted from investing the proceeds generated by the future sale of newly created shares in oil future contracts, creating the risk that USO would not be able to meet its stated investment objective. The SEC and CFTC alleged that the defendants failed to fully disclose these limitations to commodity pool participants. CFTC; SECAkazoo Settlement with SEC Offers Lessons on Risks and Enforcement in SPAC Transactions
Posted 10/28/21
October 27, 2021
A Court has approved a $38.8 million settlement between the SEC and Akazoo, S.A., which went public in 2019 by way of a SPAC merger and claimed to offer music streaming services. While the company told investors, both before and after the merger, that it had millions of paying subscribers and was increasing its subscriber base, earning hundreds of millions of dollars, the company in fact had no paying subscribers and negligible revenue. The company raised nearly $55 million in the SPAC transaction and burned through more than $20 million before the SEC filed its complaint in 2020 and secured an asset freeze. The $38.8 million disgorgement settlement will be deemed satisfied by the company’s payment of $35 million to investor victims in connection with several private class action lawsuits. SECOctober 20, 2021
Following his conviction at trial, investment manager Shawn Baldwin has been sentenced to 17 years in federal prison on investment fraud charges. Baldwin, who had been previously disciplined by authorities, solicited investors with claims that overstated his credentials and misrepresented that their funds would be used to invest in stocks and other investment products. In fact, Baldwin used most of the investors’ funds for his own personal benefit. USAO ND ILOctober 19, 2021
Credit Suisse Group AG, together with related subsidiaries, and VTB Capital plc will collectively pay more than $481 million to resolve charges related to the financing of hundreds of millions in loans to the government of Mozambique and an entity owned by that government, Empresa Moçambicana de Atum S.A. (EMATUM), which was formed to develop a tuna fishing project. Credit Suisse, which pleaded guilty to defrauding investors and entered into a settlement agreement with the SEC, will pay nearly $475 million to U.S. and international authorities, as well as restitution to individual investors. As part of its guilty plea, Credit Suisse admitted that it made material misrepresentations and omissions in statement to investors including about the planned use of loan proceeds; about $50 million in kickback payments to a Credit Suisse subsidiary and $150 million in bribes to government officials; about the existence and maturity dates of other loans to the government of Mozambique; about other red flags prior to and during the EMATUM financing; and about the risk of default. In addition, the SEC charged that Credit Suisse violated the internal accounting controls and books and records provisions of the Foreign Corrupt Practices Act. Credit Suisse's payment consists of a $99 million payment to the SEC ($65 million as a penalty and $34 million in disgorgement and interest), a $247.52 million criminal monetary penalty to the U.S., with $175.6 million to be paid and the remaining to $47.2 million to be credited to related settlements, and $200.7 million to the United Kingdom's Financial Conduct Authority. In addition, Credit Suisse agreed to provide $200 million as debt relief to Mozambique. VTB will pay $6.4 million to resolve SEC charges that it mislead investors in a related bond offering structured by VTB Capital and Credit Suisse, which the SEC found failed to disclose the true nature of Mozambique's debt and the high risk of default on the bonds. SEC; DOJOctober 15, 2021
Tether Holdings Limited and related entities, issuers of the “Tether Token” or USDt, have agreed to pay a civil monetary penalty of $41 million to resolve allegations that they violated the CEA and CFTC regulations by making untrue or misleading statements and/or omitting material facts through statements that Tether maintained sufficient U.S. dollar and other fiat currency reserves in bank accounts to back every USDt in circulation. In fact, Tether did not hold sufficient currency reserves at all times. The reserves were inadequate in amount, and were not held in currency in bank accounts, but instead included unsecured receivables and non-fiat assets, which were held by unregulated entities and third-parties including Bitfinex, which commingled reserve funds with operational and customer funds. The CFTC also found that Tether failed to perform routine professional audits as represented. CFTCWhistleblower Reveals Facebook’s Lies: Will the SEC or Congress Act to Curtail Threats to Democracy and Teens from Social Media?
Posted 10/1/21
