Misrepresentations Archives - Page 14 of 60

September 15, 2021

Ronald Montano and his company, Montano Enterprises LLC, have been ordered to pay $2.5 million in restitution and civil monetary penalty for using fraudulent solicitations in connection with binary options with commodity interests. The solicitations misrepresented automated trading systems as successful, using fictitious trading results, fabricated customer testimonials, and falsified background information on the systems’ creators. CFTC

Tagged in: Fraud in CFTC-Regulated Markets, Misrepresentations,

September 14, 2021

App Annie Inc. will pay $10 million to resolve claims of securities fraud arising from the company’s alleged misuse of mobile app “alternative data” shared by companies about the performance of their mobile apps with the promise that such data would be aggregated and anonymized. In fact, App Annie used non-aggregated and non-anonymized data to develop models that it sold to customers to make investment decisions and trade ahead of upcoming earnings announcements. The company’s co-founder and former CEO will also pay a fine of $300,000. SEC

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

September 13, 2021

GTV Media Group Inc., Saraca Media Group Inc., and Voice of Guo Media Inc. will collectively pay more than $539 million to resolve SEC and New York State claims related to their alleged unregistered offering of GTV common stock and a digital asset security referred to as G-Coins or G-Dollars. The SEC found that the respondents publicized the two offerings on their websites and social media platforms, raising approximately $487 million from more than 5,000 investors. No registration statements were filed, and no registration exemption applied. Without admitting or denying the SEC’s findings, respondents agreed to pay disgorgement of $486 million plus interest, and penalties totaling $35 million. SEC; NY

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

September 3, 2021

The Kraft Heinz Company and two of its former executives will pay $62 million to resolve charges that between 2015 and 2018 the company falsely reported cost savings, including by recognizing unearned discounts from suppliers and maintaining false and misleading supplier contracts. In 2019, Kraft Heinz restated its financials, correcting a total of $208 million in improperly-recognized cost savings. The SEC alleged that the company did not have effective internal accounting controls in its procurement division, and that former COO Eduardo Pelleissone and former Chief Procurement Officer Klaus Hoffman ignored red flags that expenses were not being accurately reported. Pelleissone and Hoffman will pay civil penalties of $300,000 and $100,000, respectively. SEC

Tagged in: Accounting Fraud, Financial and Investment Fraud, Misrepresentations, Securities Fraud,

August 25, 2021

Default judgment was entered against Silver Star FX, LLC d/b/a Silver Star Live, Silver Star Live Software LLC, and David Wayne Mayer based on findings that, acting as unregistered commodity trading advisors, they fraudulently solicited customers to open discretionary foreign exchange trading accounts that would purportedly use an automated trading software developed by Mayer. Defendants misrepresented Mayer's qualifications and trading experience, as well as the trading system's performance history and expected profits. Defendants were ordered to pay $3.9 million in restitution and $11.7 million in civil monetary penalties. CFTC

Tagged in: Foreign Exchange, Fraud in CFTC-Regulated Markets, Misrepresentations, Regulatory Violations,

August 24, 2021

Healthcare Services Group, Inc., which provides housekeeping, dining, and other services to healthcare facilities, will pay $6 million to resolve charges of improper accounting. The SEC alleged that the company failed to comply with GAAP in 2014 and 2015 by failing to timely accrue for and disclose material loss contingencies related to litigation against the company despite evidence that liability was probable and reasonably estimable. As a result, the company was able to report earnings per share that matched market expectations. The SEC investigation resulted from its “EPS Initiative,” which uses data analytics to identify improper accounting and disclosure practices. HCSG's former CFO John C. Shea and its controller, Derya Warner, will pay penalties of $50,000 and $10,000, respectively. SEC

Tagged in: Accounting Fraud, Financial and Investment Fraud, Misrepresentations, Securities Fraud,

August 23, 2021

Charles McAllister was ordered to pay $16.2 million in restitution to resolve claims arising from his operation of BullionDirect, Inc., which promised customers that it would purchase precious metals on their behalf, and deliver or store that metal. In fact, however, McCallister and BullionDirect did not purchase or store metal for customers, but instead misappropriated customer funds to pay back other customers, cover business expenses, and invest in other businesses. Defendants sent false account statements to customers to conceal the fraud. In 2019, McAllister was sentenced to 10 years in prison. CFTC

Tagged in: Criminal Proceedings, Fraud in CFTC-Regulated Markets, Misrepresentations, Ponzi Schemes,

August 13, 2021

Tyson Foods, Inc. will pay $1.5 million to resolve allegations that on nearly 600 dates between 2016 and 2021 the company held positions in Chicago Board of Trade soybean meal futures in excess of then-applicable federal position limits, and filed incorrect Statements of Cash Positions in Grain (Form 204) with the CFTC. CFTC

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

August 10, 2021

The principles of the Global Trading Club, Mayco Alexis Maldonado Garcia, Cesar Castaneda, and Joel Castaneda Garcia, consented to an order requiring payments totaling $1.75 million in restitution and civil penalties. The CFTC alleged that the individual falsely represented that GTC employed “master traders” in cryptocurrency transactions, promised returns to customers, and caused misleading trading statements to be posted online. The order bars the individuals from registering with the CFTC and from trading commodity interests. CFTC

Tagged in: Cryptocurrency, Fraud in CFTC-Regulated Markets, Misrepresentations, Ponzi Schemes,

August 6, 2021

Blockchain Credit Partners, which did business as DeFi Money Market, and its principals, Gregory Keough and Derek Acree, have agreed to disgorge $12.85 million and cease and desist from the unregistered sale of securities using smart contracts and so-called “decentralized finance” (DeFi) technology. The SEC found that defendants offered and sold mTokens and DMG governance tokens purporting to pay interest and profits, and told purchasers that that DeFi Money Market would pay them those amounts by using investor assets to buy “real world” income-generating assets like car loans. However, these income-generating assets did not generate enough income to cover appreciation of the investors’ principal, largely as a result of the price volatility of the digital assets used to purchase the tokens. Rather than disclose this to investors, defendants used other funds, including personal funds, to make principal and interest payments for mToken redemptions. Keough and Acree have each also agreed to pay penalties of $125,000. SEC

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

Contact

Click here for a confidential contact or call:

Tags

Misrepresentations