Securities Fraud

March 30, 2020

A whistleblower working in compliance and internal audits has been awarded $450,000 by the SEC.  After efforts to report misconduct internally failed to make a positive impact, the whistleblower reported the same misconduct to the SEC, which helped focus an ongoing investigation and ultimately led to a successful enforcement action.  SEC

March 24, 2020

Two whistleblowers have received awards totaling over $570,000 for their roles in recent enforcement actions by the SEC.  According to the press release, the first whistleblower received approximately $478,000 and the second whistleblower received approximately $94,000.  In keeping with agency practices, the whistleblowers’ identities have not been revealed.  SEC

March 23, 2020

The SEC has announced that it has awarded a whistleblower over $1.6 million for informing the agency of a possible securities violation and providing critical assistance during the investigation.  Because of the whistleblower’s actions, the SEC was able to successfully enforce securities laws while preserving time and resources.  SEC

February 27, 2020

Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network will pay a $35 million penalty to resolve charges that certain of Wells Fargo's investment advisors and registered representatives made unsuitable recommendations to retail clients regarding single-inverse ETF products.  The SEC charged that Wells Fargo lacked policies and procedures that would have detected such unsuitable recommendations, and failed to adequately supervise and train its financial professionals, who did not fully understand the products they were recommending.  Wells Fargo did not admit or deny the SEC's findings; the penalty will be distributed to harmed individuals.  SEC

February 21, 2020

Wells Fargo & Co. will pay a total of $3 billion in a federal settlement resolving criminal, civil, and administrative liability with respect to its “cross-selling” sales practices between 2002 and 2016 that led to the opening of millions of checking, savings, credit card, and other accounts on behalf of individual customers under false pretenses or without the customers’ consent.  As part of the settlement, Wells Fargo admitted that it collected millions of dollars in fees and interest to which the Company was not entitled, harmed customer credit ratings, and unlawfully misused customers’ personal information.  Wells Fargo entered into a three-year deferred prosecution agreement requiring the bank to take certain compliance steps and cooperate with ongoing investigations.  Of the $3 billion settlement, $500 million resolves SEC claims that the bank, knowing about the underlying violations, mislead investors about the success of its business; the SEC settlement will be distributed to harmed investors.  The federal settlement is in addition to a $575 million 2018 settlement Wells Fargo entered into with 50 states and the District of Columbia and a $100 million 2016 fine from the CFPB arising from the same conduct.  DOJ; SEC; WD NC; CD Cal

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