Contact

Click here for a confidential contact or call:

1-212-350-2774

Regulatory Violations

This archive displays posts tagged as relevant to violations of rules and regulations government the financial markets and its participants. You may also be interested in the following pages:

Page 1 of 38

May 17, 2021

Index provider S&P Dow Jones Indices LLC, which publishes the S&P 500 VIX Short Term Futures Index ER, will pay a $9 million penalty to resolve claims that inadequate quality control procedures, including an undisclosed “auto-hold” feature triggered by a VIX spike, caused it publish and disseminate stale index values during a period of unprecedented volatility.  As a result of the stale information, issuers who used the index to offer securities reported incorrect values.  SEC

ITG – Securities violations (30% SEC whistleblower award)

Constantine Cannon’s team secured another multi-million-dollar SEC whistleblower award for an anonymous whistleblower whose original information and assistance led to an enforcement action against brokerage firm ITG.  The SEC has repeatedly fined ITG in recent years, including for violations related to the firm’s dark pool, POSIT.  A dark pool is an alternate trading system that is supposed to allow investors to place buy and sell orders without alerting predatory traders who can manipulate prices.  ITG told its customers that they could trade in POSIT anonymously and confidentially, but the SEC twice concluded this was false.  The SEC awarded our client 30 percent of the recovery, the maximum amount allowed under the SEC Whistleblower Program.  For more information, see Constantine Cannon Client Receives Maximum Award for Blowing the Whistle on ITG

May 12, 2021

Registered broker-dealer GWFS Equities Inc. will pay a penalty of $1.5 million to settle allegations that it failed to respond appropriately when it detected external bad actors gaining, or attempting to gain, access to the retirement accounts of participants in the employer-sponsored retirement plans it serviced, including through the use of improperly obtained electronic login information, user names, email addresses, and passwords. There was no allegation that this personal identifying information was disclosed in a breach of GWFS systems. However, the bad actors used this information to request distributions from plan participant accounts. While GWFS detected and blocked many of these attempts, the SEC charged that GWFS failed to file suspicious activity reports, or filed incomplete SARs, with respect to the account takeovers. SEC

April 29, 2021

Following a self-disclosure, software company SAP SE will pay penalties totaling over $8 million and disgorge over $5 million to resolve claims that it violated Export Administration Regulations and the Iranian Transactions and Sanctions Regulations. Between 2010 and 2017, SAP and its partners and subsidiaries released U.S-origin software to users located in Iran and permitted Iranian users to access U.S.-based cloud services from Iran.  In both cases, SAP executives were aware of the issues but did not take steps to remedy or stop them.  SAP also entered into a non-prosecution agreement setting forth specific compliance procedures.  DOJ; USAO Mass; OFAC; Commerce

April 9, 2021

The Alista Group, LLC, and Luis M. Pineda Palacios, a/k/a Luis Pineda, have been ordered to pay civil monetary penalties and restitution in an action initiated by the CFTC alleging that they engaged in precious metals fraud and illegal, off-exchange precious metals sales to retail customers.  In addition, the government alleged that defendants misappropriated customer funds to trade on their own account, pay business expenses, and make payments to customers to sought to cash out.  Alista was ordered to pay a total of $2.2 million, and Pineda was ordered to pay $448,000. CFTC

March 4, 2021

Sohrab Sharma, a co-founder of Centra Tech, which claimed to offer products including a debit card that would allow users to make retail purchases using cryptocurrency, has been sentenced to eight years in prison following his guilty plea to charges arising from Centra’s fraudulent representations to participants in its unregistered initial coin offering of “Centra Tokens” or “CTR tokens,” which raised more than $25 million from victims.  Sharma and his co-defendants falsely claimed that Centra Tech had an experienced executive team, agreements with card issuers, and licenses to operate in 38 states when, in fact, Centra Tech had none of these things.  USAO SDNY

February 12, 2021

Registered investment advisor and broker-dealer Winslow, Evans & Crocker, Inc. will pay $1.9 million in disgorgement, interest, and penalties to resolve allegations regarding its mutual fund share class and cash sweep selection practices.  Winslow allegedly recommended mutual fund share classes and money market funds to its customers without adequately disclosing that it received 12b-1 fees and revenue-sharing payments in connection with those shares and funds, when lower-cost share classes and options were available.  SEC

December 17, 2020

Robinhood Financial LLC will pay $65 million to resolve an SEC investigation into its disclosures regarding the firm’s receipt of "payment for order flow" – payments from trading firms for routing customer orders to them – as well as its alleged failure to secure best execution on customer orders.  According to the SEC, while Robinhood advertised to customers that trades were "commission-free," it steered customer orders to trading firms that paid Robinhood for order flow but provided inferior trade prices to Robinhood customers, thereby misrepresenting the true cost of trades.  SEC

December 9, 2020

ICE Data Pricing & Reference Data LLC agreed to pay $8 million to resolve charges that between 2015 and 2020 it failed to take adequate steps to ensure the accuracy of securities pricing data it supplied to clients, including by relying on single broker quotes which did not reasonably reflect the value of certain securities.  This conduct affected the prices ICE Data PRD provided for more than 40,000 fixed-income securities. SEC

Sunshine State Local Elections Shine Light on How Dark Shell Company Data Can Be

Posted  11/18/20
By Sarah “Poppy” Alexander
top-secret-seal
Amidst the ongoing saga of the US national elections, Florida local elections may not have made much of a ripple.  But one small scandal in the Sunshine State reveals a lot about the ongoing problem the US has with shell corporations and their hidden ownership structures. The story is convoluted, as most shell company stories are.  A political donor, Proclivity, who had never donated money in Florida before,...
1 2 3 38

Newsletter

Subscribe to receive email updates from the Constantine Cannon blogs

Sign up for: