Misrepresentations

July 28, 2016

State Street Bank and Trust Company (State Street) will return $75 million in profits to resolve allegations it provided misleading information as to how it priced foreign exchange transactions, Massachusetts announced. The agreement is part of a $382 million federal-state global resolution in conjunction with the U.S. Securities and Exchange Commission, the U.S. Department of Justice, and the U.S. Department of Labor, along with three class action lawsuits. The agreement with the AG’s Office requires State Street to provide $75 million in disgorgement, along with a payment of $500,000 to the Commonwealth. Additional disgorgement and penalties will be paid by State Street through separate agreements with federal enforcement entities. MA

July 14, 2016

The CFPB ordered Santander Bank, N.A. to pay a $10 million fine for using a telemarketing vendor to deceptively market their overdraft service and sign certain bank customers up for the service without their consent.  CFPB

July 14, 2016

Atlantas Group, Inc. and its sole owner and president, Edmund Hysni, of Waterford, Michigan, agreed to pay $7.2 million in restitution and penalties to resolve allegations that they engaged in solicitation fraud and made false statements to the National Futures Association in connection with its investigation of the alleged fraud.  CFTC

July 14, 2016

Following a public comment period, the FTC has approved a final consent order against Progressive Chevrolet Company and Progressive Motors Inc., of Massillon, Ohio, which the FTC charged with deceiving consumers by using advertising that touted low monthly car lease payments and down payments but failed to disclose other key terms of the offers. FTC

July 11, 2016

Warner Bros. Home Entertainment, Inc. has settled FTC charges that it deceived consumers during a marketing campaign for the video game Middle Earth: Shadow of Mordor, by failing to adequately disclose that it paid online “influencers,” including the wildly popular “PewDiePie,” thousands of dollars to post positive gameplay videos on YouTube and social media. Over the course of the campaign, the sponsored videos were viewed more than 5.5 million times. FTC

June 28, 2016

The CFTC filed a lawsuit against Alvin Guy Wilkinson, of San Juan, Puerto Rico, and his limited partnerships Chicago Index Partners, L.P. and Wilkinson Financial Opportunity Fund, L.P., both located in Sharon, Connecticut, alleging they fraudulently solicited over $6.9 million from at least 30 investors and misappropriated at least $5.2 million of investors funds.  CFTC

June 2, 2016

North Carolina-based investment adviser Richard W. Davis, Jr. has agreed to settle charges of defrauding investors by secretly steering portions of real estate-related investments into deals with companies he owned or operated.  The SEC further alleges that Davis made false and misleading statements to investors before and after they made their investments, failed to inform investors of their losses as his companies failed to pay the loans, and improperly received at least $1.5 million from bank accounts which commingled investor funds when he was only entitled to less than $150,000 in management fees.  Davis has agreed to a settlement subject to court approval with disgorgement plus interest and penalties to be determined by the court at a later date.  SEC

March 31, 2016

The CFTC filed a civil enforcement action against Hendrik A. Van Beuningen of Brookhaven, Georgia, and his company, DeBrink Trading Fund I, LLC of Atlanta, Georgia, alleging fraud, misappropriation, and issuing false statements in connection with a commodity pool they operated.  CFTC

March 29, 2016

AVEO Pharmaceuticals Inc. will pay $4 million to settle charges that it mislead investors about its efforts to obtain FDA approval for Tivozanib, its flagship developmental drug to treat kidney cancer.  The SEC alleges that AVEO concealed the FDA’s level of concern about Tivozanib in public statements to investors by omitting the critical fact that FDA staff had recommended a second clinical trial to address concerns about patient death rates during the first clinical trial.  When the FDA made public months later that it had recommended an additional clinical trial, the company’s stock price declined 31 percent.  AVEO never conducted an additional trial and the FDA later refused to approve Tivozanib.  The SEC also filed charges against AVEO’s former CEO, CFO, and CMO.  These charges remain outstanding.  SEC

March 29, 2016

Former market analyst and TV news commentator Tobin Smith and his company NBT Group Inc. will pay over $250,000 to settle charges that they fraudulently promoted a penny stock to investors.  The SEC alleged that Smith and NBT were paid to prepare and disseminate communications touting the stock of IceWEB Inc., a data storage company.  Smith and NBT did not fully disclose their compensation to investors.  In addition, the promotional material contained false and misleading statements intended to artificially increase the trading volume and share price of IceWEB’s stock.  SEC