Securities Fraud

October 29, 2021

Following amendments on types of actions that may be considered “related” under whistleblower rules, the SEC has awarded more than $2 million to an individual who was previously awarded for contributing to a successful enforcement action.  According to the agency, the whistleblower’s information sparked investigations by both the SEC and DOJ.  SEC

October 27, 2021

A Court has approved a $38.8 million settlement between the SEC and Akazoo, S.A., which went public in 2019 by way of a SPAC merger and claimed to offer music streaming services.  While the company told investors, both before and after the merger, that it had millions of paying subscribers and was increasing its subscriber base, earning hundreds of millions of dollars, the company in fact had no paying subscribers and negligible revenue.  The company raised nearly $55 million in the SPAC transaction and burned through more than $20 million before the SEC filed its complaint in 2020 and secured an asset freeze.  The $38.8 million disgorgement settlement will be deemed satisfied by the company’s payment of $35 million to investor victims in connection with several private class action lawsuits.  SEC

October 15, 2021

The SEC has granted awards totaling approximately $40 million to two whistleblowers whose contributions helped result in a successful enforcement action.  Approximately $32 million went to a whistleblower whose tip about difficult-to-detect violations launched the investigation, and who then helped agency staff understand complex fact patterns and identify witnesses.  The remaining $8 million went to a whistleblower who reported new information but who waited years before reporting wrongdoing to the agency.  SEC

September 24, 2021

London-based advertising company WPP plc, which has ADRs registered in the US, will pay $19 million in disgorgement, interest, and penalties to resolve allegations that it violated the Foreign Corrupt Practices Act.  The SEC charged that WPP acquired advertising agencies in high-risk markets and failed to insure that these subsidiaries implemented appropriate internal controls or respond to repeated warning signs and internal complaints about activities including payments to government officials in India, China, Brazil, and Peru.  SEC

September 20, 2021

Daryl Bank of Port St. Lucie, Florida was sentenced to 35 years in prison following his conviction at trial on charges related to his sale, through his company Dominion Private Client Group, of unregistered securities in companies that he owned and controlled, despite his previous FINRA bar from the securities industry.  Dominion’s former attorney, Billy Seabolt, previously pleaded guilty to related charges and was sentenced to ten years in prison.  USAO ED VA

September 17, 2021

RBC Capital Markets LLC will pay $800,000 to resolve charges that it improperly allocated bonds intended for institutional customers and dealers to “flippers,” who then resold the bonds to other broker-dealers at a profit, despite customer instructions to place retail customer orders first.  RBC employees Kenneth G. Friedrich, who was the head of Municipal Sales, Trading and Syndication, and Jaime L. Durando, the head of RBC's municipal syndicate desk, also settled charges and agreed to penalties of $30,000 and $25,000 respectively.  SEC

September 17, 2021

The SEC has awarded two whistleblowers a total of $11.5 million for contributing to a successful enforcement action.  The first whistleblower received a larger award, nearly $7 million, for being the initial source that launched the investigation.  The second whistleblower received over $4.5 million after delaying reporting for several years.  SEC