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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:

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SEC Whistleblower Program 2019 Annual Report Tells Story of Significant Impact - Despite Beginning the Year with a Government Shutdown

Posted  12/12/19
Securities Exchange Commission Logo
In its 2019 Annual Report to Congress, the SEC Office of the Whistleblower described its program as continuing to have a “significant impact” on enforcement and investor protection efforts.  In the fiscal year that ended in September 2019, the SEC Whistleblower Program received the second highest number of tips in program history, and issued the third largest whistleblower award to date. These numbers...

December 12, 2019

Two oil and gas executives have settled insider trading charges with the SEC by agreeing to pay nearly $6 million in civil penalty, disgorgement, and prejudgment interest.  The two, John Davidson and John Special, allegedly purchased shares of medical device company, Covidien PLC, upon learning non-public information about a potential merger with Medtronic PLC.  When news of the merger was officially released, investment accounts controlled by the men earned over $1 million in illicit gains.  SEC

November 15, 2019

Three whistleblowers who jointly submitted a tip to the SEC were awarded $260,000.  The information provided by the unidentified whistleblowers lead to a successful enforcement action against a fraud that targeted retail investors.  The whistleblowers were reported to be investors who were themselves harmed by the conduct.  SEC

Second Circuit Upholds SEC Denial of Whistleblower Rewards to Three Claimants in Deutsche Bank Settlement

Posted  11/13/19
Disorganized paper records stacked on table
In May 2015, Deutsche Bank agreed to pay a $55 million penalty to the SEC to settle charges that its financial statements misreported the value of a portfolio of derivatives, failing to take account of the material risk of potential losses associated with the derivatives.  Subsequently, in November 2017, the SEC announced that it had awarded whistleblower rewards totaling $16 million to two whistleblowers “whose...

October 2, 2019

Brokerage firm Lek Securities Corp. and its CEO Sam Lek will pay almost $2 million to resolve allegations that they facilitated the manipulative trading scheme of Ukraine-based customer Avalon FA, Ltd.  Lek provided Avalon with the means to engage in "layering" and other cross-market manipulation.  Layering involves placing and canceling orders to signal inaccurate prices.  Avalon also engaged in other practices to buy and sell stocks to artificially impact options prices.  Lek Securities will pay a $1 million penalty plus $526,000 in disgorgement and interest; Sam Lek will pay a $420,000 penalty.  Defendants have admitted the facts alleged and Lek Securities has agreed to retain an independent compliance monitor.  SEC

September 30, 2019

Longfin Corporation has been ordered to pay $6.8 million in a default judgment entered in a federal court case alleging that Longfin filed fraudulent papers to qualify for a public offering under Regulation A+, misrepresenting the business as being based in the U.S.  In addition, Longfin reported fictitious revenue from sham commodities transactions and unlawfully distributed Longfin shares, including in unregistered transactions and to insiders and affiliates.  SEC

September 27, 2019

Pharmaceutical manufacturer Mylan N.V. has agreed to pay $30 million to resolve SEC charges that the company failed to disclose or adequately accrue for possible losses arising from a DOJ investigation into Mylan's classification, pricing, and rebate practices regarding its EpiPen product.  In 2017, Mylan agreed to pay $465 million to resolve that DOJ investigation.  SEC

September 27, 2019

Fiat Chrysler Automobiles N.V. and its U.S. subsidiary FCA US LLC will pay $40 million to resolve SEC allegations that the automaker provided false and misleading information in press releases and regulatory filings about its monthly new vehicle sales and vehicle sales growth rate.  The SEC found that FCA US inflated new vehicle sales by paying dealers to report fake vehicle sales, but then failing to report those sales at the time.  Instead, Fiat Chrysler kept these sales in a separate database referred to internally as the "cookie jar," which the company would then dip into to report as current sales in a slow month.  SEC

September 27, 2019

Herbalife Nutrition Ltd. will pay $20 million to settle charges that it made misstatements in regulatory filings about its business in China.  While Herbalife, which has a direct sales model, claimed in filings that it did not use its customary multilevel marketing compensation model in China in order to comply with Chinese law, in fact, its compensation model in China was materially identical to its compensation model in every other country.  By failing to disclose this information, Herbalife was found to have deprived investors of valuable information regarding the risks faced by the company.  SEC

How to Report Visa Fraud for a Whistleblower Reward

Posted  09/25/19
Statute of Liberty overlooking NY harbor
Last week, the government announced that India-based management consulting firm Mu Sigma would pay $2.5 million to settle claims that it evaded H-1B visa requirements and brought employees to the U.S. on B1 visitor visas, misrepresenting the nature of their intended employment. In announcing the settlement, Immigration and Customs Enforcement stated that the Mu Sigma investigation was launched by a whistleblower...
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