Securities Fraud
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July 18, 2019
Swapnil Rege, who worked as a portfolio manager for a hedge fund that operated as a commodity pool operator, was been ordered by the CFTC and SEC to pay a $100,000 civil penalty and disgorge a $600,000 performance bonus he received as a result of his fraudulent mismarking the valuations of interest rate swaps. The mismarking, accomplished through various means, artifically inflated the profitability of his trades, earning him a larger performance bonus. SEC, CFTCJuly 18, 2018
After being charged in March 2018, former Equifax executive Jun Ying has agreed to pay disgorgement and prejudgment interest totaling $125,636 to resolve charges that he engaged in insider trading ahead of exposure of Equifax's data breach. Ying's payment obligation will be offset by the $117,117 forfeiture that he has already paid in the parallel criminal case. SECJuly 16, 2019
AR Capital LLC, together with its founder Nicholas Schorsch and its former CFO Brian Block, have agreed to pay $39 million in disgorgement and interest, as well as penalties totaling $21.75 million, to resolve allegations that they wrongfully inflated incentive fees and took unsupported charges in two separate mergers involving the publicly-traded REIT American Realty Capital Properties, Inc. that AR Capital sponsored and managed. Defendants allegedly failed to properly disclose their compensation to shareholders. SECJuly 15, 2019
Nomura Securities, Inc. agreed to provide $25 million to reimburse customers that purchased mortgage-backed securities from Nomura. The SEC orders find that Nomura traders made false and misleading statements to customers, including about the price at which Nomura bought securities, the amount of profit Nomura would receive on the potential trade, and the current owner of the security. The SEC furhter alleged that Nomura failed to reasonably supervise its traders. Nomura, which cooperated in the investigation, will also pay $1.5 million in penalties. Two individual traders were previously charged by the SEC. SECJune 19, 2019
The former CEO of Quintillion, a telecommunications company in Alaska, has been sentenced to 5 years in prison and ordered to forfeit $896,698 for defrauding investors of more than $270 million. In order to secure funding to build a high-speed fiber optic cable system, Elizabeth Pierce had presented two New York investment companies with contracts that made it appear as if Quintillion was guaranteed revenue of nearly $1 billion. Unbeknownst to investors and her own staff, however, the contracts were allegedly forged and the actual contracts she’d negotiated would generate only a fraction of that amount. Quintillion eventually reported her to the DOJ. USAO SDNYJune 6, 2019
The SEC has filed a federal court action against Kik Interactive, Inc. The company, which previously offered an online messaging application, raised more than $100 million through the sale of "Kin" tokens, an unregistered digital asset. Kik marketed the Kin cryptocurrency as an investment which would trade on secondary markets, and which Kik would incorporate in its messaging platform, creating a Kin transaction network both on and off the messaging platform. According to the SEC's complaint, these Kik platforms did not, in fact, exist. Kik did not comply with securities registration requirements in offering the Kin tokens for sale, and the SEC alleges that in failing to do so, Kik violated Section 5 of the Securities Act of 1933. SECJune 3, 2019
The SEC made a $3 million whistleblower award to be shared by multiple anonymous whistleblowers who jointly submitted a tip to the SEC Whistleblower Program regarding their employer. The tip, reporting an alleged securities law violation that impacted retail investors, led to a successful enforcement action by the SEC. The SEC also noted that the whistleblowers had undertaken significant efforts to report the issues internally and seek to have them corrected. SECSEC Gives First Ever Whistleblower Award Under Rule That Incentivizes Internal Reporting
Posted 05/31/19
