Securities Fraud

August 28, 2020

Herbalife Nutrition Ltd. will pay over $123 million to resolve claims that the US-based company violated the Foreign Corrupt Practices Act by paying bribes to Chinese officials and other state-owned entities in order to secure required direct selling licenses, improperly influence Chinese investigations into Herbalife's business, and improperly influence Chinese state-owned and state-controlled media for the purpose of removing negative media reports about Herbalife. Herbalife admitted that over the course of ten years it falsified its books and records in order to provide corrupt payments and benefits to Chinese government officials.  To resolve criminal charges, Herbalife will enter into a deferred prosecution agreement and pay a $55 million criminal penalty; to resolve civil charges by the SEC, Herbalife will pay disgorgement and interest totaling approximately $67 million.  DOJ; USAO SDNY; SEC

July 20, 2020

UBS Financial Services Inc. and two of its registered representatives will pay $10 million in penalties, disgorgement, and interest to resolve claims that UBS improperly redirected municipal bond offerings away from retail customers and to “flippers,” who re-sold the bonds to other broker-dealers, including UBS.  This practice allowed UBS to circumvent the priority retail order periods set by bond issuers and improperly obtain a greater allocation of bonds for its own inventory.  SEC

July 14, 2020

A whistleblower has been awarded $3.8 million after providing the SEC with information that helped stop an ongoing fraud and helped return millions of dollars to investors.  The SEC did not disclose specific details of the fraud in their press release. SEC

July 10, 2020

A 70-year-old man in North Carolina who pleaded guilty to orchestrating a $22 million Ponzi scheme through his company, Oodles Inc., has been sentenced to 17.5 years in prison and ordered to pay $17 million in restitution.  Hal H. Brown Jr. singlehandedly defrauded at least 60 victims—including family, friends, neighbors, and fellow church members—by falsely representing that Oodles owned hundreds of millions of dollars in rights to religious-themed family shows and movies.  To bolster his claims, Brown developed marketing material, falsified bank statements and company agreements, and impersonated employees of media companies.  USAO WDNC

July 7, 2020

After being found guilty of eighteen fraud-related felonies, Todd Michael Ficeto, a former Beverly Hills stockbroker, has been sentenced to 6 years in prison and ordered to pay nearly $216 million in restitution to investor victims for his role in a massive penny stock fraud scheme.  From 2004 to 2007, Ficeto and co-conspirators fraudulently manipulated penny stocks to exaggerate the reported profits of a co-conspirator’s hedge fund, Absolute Funds.  When the scheme unraveled, Ficeto attempted to conceal the fraud by lying to investigators from the Securities Exchange Commission and Financial Industry Regulatory Authority.  One of his alleged co-conspirators—hedge fund owner Florian Wilhelm Jürgen Homm—has fled to Germany as a fugitive from justice.  USAO CDCA

July 1, 2020

Raeann Gibson of Palm City, Florida, was sentenced to ten years in prison based on her role in an investment fraud conspiracy.  Gibson served as the Chief Operating Officer of Dominion Investment Group, which defrauded elderly investors of over $25 million by diverting investment funds to the personal use of Gibson and co-defendant Daryl Bank.  Gibson created numerous shell companies, laundered investment funds through multiple accounts, and spoke with investors.  USAO EDVA