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Securities Fraud

This archive displays posts tagged as relevant to securities fraud. You may also be interested in the following pages:

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Top Ten Environmental Fraud Settlements of 2019

Posted  01/17/20
image of trees
Between Greta Thunberg's "Climate Strike" mass protests, the on-going saga over the Dakota Access Pipeline, the hoopla over plant-based diets, and record temperatures and ice melts – the environment was on everyone's mind in 2019.  Whistleblowers can be eligible for financial rewards for reporting environmental violations in a number of different ways, and our review below features many recoveries – including...

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

SEC Whistleblower Program 2019 Annual Report Tells Story of Significant Impact - Despite Beginning the Year with a Government Shutdown

Posted  12/12/19
Securities Exchange Commission Logo
In its 2019 Annual Report to Congress, the SEC Office of the Whistleblower described its program as continuing to have a “significant impact” on enforcement and investor protection efforts.  In the fiscal year that ended in September 2019, the SEC Whistleblower Program received the second highest number of tips in program history, and issued the third largest whistleblower award to date. These numbers...

December 12, 2019

Two oil and gas executives have settled insider trading charges with the SEC by agreeing to pay nearly $6 million in civil penalty, disgorgement, and prejudgment interest.  The two, John Davidson and John Special, allegedly purchased shares of medical device company, Covidien PLC, upon learning non-public information about a potential merger with Medtronic PLC.  When news of the merger was officially released, investment accounts controlled by the men earned over $1 million in illicit gains.  SEC

December 9, 2019

Colorado resident Jeffrey O. Friedland and two companies associated with him, Intiva Pharma LLC and Global Corporate Strategies LLC, have entered into a $4.2 million settlement -- $2.1 million in disgorgement plus a $2 million penalty and prejudgment interest -- with the SEC, resolving charges that Friedland and his companies fraudulently promoted the stock of cannabis company OWC Pharmaceutical Research Corp.  Friedland and his companies were alleged to have misrepresented their ownership interest in OWC, as well as Friedland's compensation in OWC stock in exchange for his promotion of the shares.  SEC

November 15, 2019

Three whistleblowers who jointly submitted a tip to the SEC were awarded $260,000.  The information provided by the unidentified whistleblowers lead to a successful enforcement action against a fraud that targeted retail investors.  The whistleblowers were reported to be investors who were themselves harmed by the conduct.  SEC

Second Circuit Upholds SEC Denial of Whistleblower Rewards to Three Claimants in Deutsche Bank Settlement

Posted  11/13/19
Disorganized paper records stacked on table
In May 2015, Deutsche Bank agreed to pay a $55 million penalty to the SEC to settle charges that its financial statements misreported the value of a portfolio of derivatives, failing to take account of the material risk of potential losses associated with the derivatives.  Subsequently, in November 2017, the SEC announced that it had awarded whistleblower rewards totaling $16 million to two whistleblowers “whose...

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 2, 2019

Brokerage firm Lek Securities Corp. and its CEO Sam Lek will pay almost $2 million to resolve allegations that they facilitated the manipulative trading scheme of Ukraine-based customer Avalon FA, Ltd.  Lek provided Avalon with the means to engage in "layering" and other cross-market manipulation.  Layering involves placing and canceling orders to signal inaccurate prices.  Avalon also engaged in other practices to buy and sell stocks to artificially impact options prices.  Lek Securities will pay a $1 million penalty plus $526,000 in disgorgement and interest; Sam Lek will pay a $420,000 penalty.  Defendants have admitted the facts alleged and Lek Securities has agreed to retain an independent compliance monitor.  SEC

September 30, 2019

Longfin Corporation has been ordered to pay $6.8 million in a default judgment entered in a federal court case alleging that Longfin filed fraudulent papers to qualify for a public offering under Regulation A+, misrepresenting the business as being based in the U.S.  In addition, Longfin reported fictitious revenue from sham commodities transactions and unlawfully distributed Longfin shares, including in unregistered transactions and to insiders and affiliates.  SEC
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