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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:

Page 1 of 62

November 29, 2018

Professional boxer Floyd Mayweather Jr. and music producer DJ Khaled have settled SEC charges that they promoted initial coin offerings (ICOs) by Centra Tech Inc. without making required disclosures about payments they received from Centra Tech.  Mayweather agreed to pay disgorgement, penalties, and interest totaling $614,775, and Khaled agreed to pay a total of $152,725. SEC

Tagged in: Cryptocurrency, Regulatory Violations, Securities Fraud,

November 28, 2018

Edwin Fujinaga, the former president and CEO of MRI International, Inc., which purported to be a medical collections and investment company, was convicted after a five-week trial for his role in a $1.5 billion ponzi scheme. Fujinaga solicited investments from over 10,000 Japanese residents, promising investors that their funds would be used to purchase medical debt. In fact, less than two percent of investor funds were used to purchase medical claims.  Fujinaga diverted the remainder for personal use and to pay off earlier investors.  In 2013, the Japanese government revoked MRI's license to market securities.  USAO NV

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

November 16, 2018

CarrierEQ Inc. (Airfox) and Paragon Coin Inc. have agreed to pay civil penalties of $250,000 each to resolve charges that they conducted initial coin offerings (ICOs) in 2017 without registering the ICOs pursuant to federal securities laws.  Airfox's offering had raised $15 million and Paragon had raised $12 million.  The companies also agreed to provide compensation to harmed investors and to register their tokens as securities.  SEC

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

November 7, 2018

Citibank N.A. has agreed to pay $38.7 million to settle charges that it improperly handled “pre-released” American Depositary Receipts (ADRs).  ADRs are securities that represent shares in a foreign company, and ordinarily require that a corresponding number of foreign shares be held at a depository bank. However, "pre-release” allows ADRs to be issued without the deposit of foreign shares, provided that brokers have an agreement with a depository bank and the broker or its customer owns the required number of foreign shares. The SEC found that Citibank improperly provided ADRs to brokers when, in fact, neither the broker nor its customer had the foreign shares needed to support those new ADRs.  SEC

Tagged in: Financial Institution Fraud, Regulatory Violations, Securities Fraud,

November 8, 2018

Zachary Coburn, the founder of EtherDelta, a digital "token" trading platform, settled SEC charges that the platform operated as an unregistered exchange.  Over an 18-month period, EtherDelta's users executed more than 3.6 million orders for ERC20 tokens, including tokens that are securities under the federal securities laws.  Because it was functioning as an online national securities exchange, EtherDelta was required to register with the SEC or qualify for an exemption.  Coburn consented to the order and agreed to pay $300,000 in disgorgement plus $13,000 in prejudgment interest and a $75,000 penalty.  SEC

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

November 7, 2018

ITG Inc. and its affiliate AlterNet Securities Inc. have agreed to pay a $12 million SEC fine to settle charges that ITG made misstatements about the operation of its dark pool, POSIT, and failed to establish adequate safeguards and procedures to protect POSIT subscribers’ confidential trading information.  The SEC found that ITG improperly disclosed the confidential dark pool trading information of firm clients, and failed to disclose certain structural features of the dark pool, including segmentation and speed limits.  SEC

Tagged in: Dark Pools, Misrepresentations, Regulatory Violations, Securities Fraud,

October 24, 2018

The Attorney General of New York has filed a lawsuit against ExxonMobil for misleading investors about the risks it faces due to climate change, which has resulted in billions of dollars in losses to investors such as the New York State Common Retirement Fund and New York State Teachers Retirement System. For years, the oil and gas titan allegedly falsely represented to investors that it was accounting for the rising tide of climate change regulations to its business planning. In truth, it was accounting for far less than it should or not even accounting for it at all. AG NY

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

October 23, 2018

The SEC has settled with the head of Breitling Oil and Gas Corporation (BOG) and Breitling Energy Corporation (BECC), Christopher A. Faulkner, for charges of securities fraud, engaging in illegal monetary transactions, and tax evasion. Between 2011 to 2016, the self-proclaimed "Frack Master" allegedly lied to investors about his experience and the estimated costs of drilling, pocketed a difference of about $80 million for his companies, and then funneled about $23 million of those funds for his personal use. The agency had previously settled with most of the 11 other individuals and entities that were also charged in this scheme. Faulkner will now serve 12 years in federal prison and pay $25 million in disgorgement and interest. SEC; USAO NDTX

Tagged in: Securities Fraud,

October 19, 2018

Nicholas Joseph Genovese pleaded guilty to securities fraud and agreed to forfeit more than $13 million in proceeds from the fraud.  Genovese admitted to misrepresenting his qualifications and professional background and concealing that he had prior felony convictions for fraud-related crimes as he solicited investors for a hedge fund he founded, Willow Creek Investments LP.  Genovese lost over $8 million of investor funds between January 2015 and December 2017.  SDNY

Tagged in: Misrepresentations, Securities Fraud,

October 18, 2018

Jean Danhong Chen, an attorney, and Tony Jianyun Ye have been charged by the SEC with securities violations arising from their sale of EB-5 securities to Chen's clients, earning over $10 million in undisclosed commissions.  Chen and Ye operated an EB-5 regional center, Golden State Regional Center LLC, and advised Chen's clients to invest in the center’s projects while concealing their ownership interest. After learning of the SEC’s investigation, Chen and Ye allegedly backdated documents and scrubbed other business records to conceal their role in the alleged scheme.  SEC

Tagged in: Securities Fraud, Visa Fraud,

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