Securities Fraud

February 19, 2020

The SEC has awarded two whistleblowers a total of almost $3 million for alerting the agency to misconduct.  The first award of over $2.2 million went to an individual whose information helped bring a successful enforcement action to an open investigation.  The second award of almost $700,000 went to an individual whose tip about a fraudulent reporting scheme helped launch an investigation.  SEC

January 14, 2020

The SEC has awarded nearly $600,000 to an anonymous whistleblower whose information and substantial assistance resulted in critical investigative leads in an open investigation, ultimately leading to a successful enforcement action.  SEC

January 7, 2021

The SEC has awarded five whistleblowers more than $1.1 million for providing information that led to three successful enforcement actions.  The first order credited three whistleblowers with information and assistance that led to two related enforcement actions; the three were awarded nearly $500,000.  The second order awarded nearly $600,000 to an individual who reported concerns internally before providing extensive assistance to SEC investigators.  The third order awarded over $100,000 to an individual who provided independent analysis of publicly available documents; this is the fifth such whistleblower this fiscal year who has granted an award.  SEC

December 23, 2020

RPM International Inc. and Edward W. Moore, its general counsel and chief compliance officer, will pay a $2 million penalty to resolve allegations that the roofing company violated generally accepted accounting principles in failing to timely disclose a material loss contingency or accrual arising from its knowledge that the government was investigating alleged overcharges by RPM on government contracts.  In August 2014, RPM restated its results in three prior quarters, although it allegedly knew about the investigation and the company’s exposure earlier.  SEC

December 22, 2020

A whistleblower will receive a $1.6 million award, with the SEC finding that the individual provided ongoing assistance during the investigation despite having personal safety concerns, and that assistance included original information about the involvement of certain defendants in the reported scheme.  SEC

December 16, 2020

China-based Luckin Coffee will pay a penalty of $180 million to resolve charges that the company defrauded investors by materially misstating the its revenue, expenses, and net operating loss in an effort to falsely appear to achieve rapid growth and increased profitability and to meet earnings estimates. The SEC alleged that over the course of more than a year, Luckin intentionally fabricated more than $300 million in retail sales, and $190 million in expenses, by using related parties to create false transactions and inflated expenses. Luckin overstated its revenue by 28% and 45% in two different quarters, and raised more than $864 million from debt and equity investors during the relevant time period. Luckin ADRs were traded on NASDAQ until July, 2020.  SEC