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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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September 16, 2019

Marvell Technology Group, Ltd. will pay $5.5 million to resolve charges of fraudulent accounting practices in 2015 and 2016.  Marvell allegedly accelerated sales in the fourth quarter of 2015 and first quarter of 2016, pulling those sales into the earlier quarters in order to mask a substantial decline in customer demand and loss of market share and make it appear that they were meeting forecasted revenue and publicly-issued revenue guidance.  The "pull-in" sales, in the amount of $24 million and $64 million, accounted for 5% and 16% of total revenue in the respective quarters.  SEC

September 16, 2019

Two subsidiaries of Prudential Financial, Inc., AST Investment Services Inc. and PGIM Investments LLC, will pay a civil monetary penalty of $5 million and disgorge $27.6 million to resolve charges that they failed to disclose a conflict of interest that arose between the subsidiaries, which served as investment advisors to 94 insurance-dedicated mutual funds, and Prudential, following a 2006 reorganization.  The reorganization was designed so that Prudential could receive certain tax benefits, but resulted in increased costs to the funds, which were not disclosed to the funds' boards of trustees of the beneficial owners of the funds' shares.  Prudential had previously reimbursed the funds for $155 million, and AST and PI self-reported to the SEC.  SEC

September 16, 2019

Stephen Condon Peters of Raleigh, North Carolina, was sentenced to 40 years in prison for investment advisor fraud, fraud in the sale of unregistered securities, and related charges.  Peters, a registered investment advisor, defrauded clients by steering them to investments in which he had a personal financial interest, stole clients' funds, and made misstatements to the SEC.  In addition to his prison sentence, the court ordered Peters to pay restitution of more than $15 million.  USAO EDNC

September 16, 2019

Two investment banks--Stifel, Nicolaus & Co., Inc. and BMO Capital Markets--pay $2.7 million and and $1.95 million in penalties, respectively, for failing to provide accurate data to the SEC. Broker-dealers must provide what is known as "blue sheet data," information about securities trading information that the SEC uses to monitor and investigate transactions. For a period of seven years, both entities failed to provide data and inaccurately reported information for several millions of transactions. The banks also admitted the SEC's allegations that they did not have proper mechanisms in place to verify the accuracy of their submissions. SEC

September 13, 2019

The SEC has enjoined Kevin B. Merrill, Jay B. Ledford, and Cameron R. Jezierski from further violations of securities laws, based on their role in a $345 million offering fraud, through which they represented to investors that their funds would used to acquire and service debt portfolios, but instead used investor funds to make payments to earlier investors, and to fund their own extravagant lifestyles.  The SEC continues to investigate the Ponzi-like scheme, and a receiver has been appointed for the involved entities, Global Credit Recovery, LLC, Delmarva Capital, LLC, Rhino Capital Holdings, LLC, Rhino Capital Group, LLC, DeVille Asset Management LTD, and Riverwalk Financial CorporationSEC

September 12, 2019

Ronald Hardy and Dennis Verdosa, both formerly associated with Power Traders Press and My Street Research, were sentenced to, respectively, 10 years and 6 years in prison following their 2018 guilty pleas for their roles in a "boiler room" operation that defrauded investors, many elderly, of $147 million.  Defendants artificially inflated the price and trading volume of stock in certain publicly-traded companies, and misrepresented the advisability of purchasing the stock and its potential profitability to victim investors.  The defendants often themselves held interests in the companies, and profited when their victims lost.   USAO EDNY

September 4, 2019

Chicago-based Options Clearing Corporation (OCC), the registered clearing agency for exchange-listed option contracts on equities, will pay $15 million in penalties to the SEC and $5 million in penalties to the CFTC to resolve allegations that it failed to comply with regulations related to clearing agency standards.  As a systemically important financial market utility (SIFMU), OCC is subject to SEC and CFTC regulations regarding the implementation and management of risk management systems, to reduce the risk of disruption in OCC's operations, and allegedly failed to comply with those standards, including through changing policies without obtaining SEC approval.  SEC; CFTC

August 29, 2019

Technology company Juniper Networks, Inc., will pay $11.7 million to resolve alleged FCPA violations in its Russian and Chinese subsidiaries.  The company allegedly provided entertainment to customers including government officials, recording the expenses in off-book accounts or misrepresenting the nature of the meetings.  The SEC order also found that Juniper violated internal accounting controls and recordkeeping provisions.  SEC

August 16, 2019

In a consent judgment, Hani Zeini, formerly the CEO of California-based silicone breast implant company Sientra, Inc., has been ordered to pay a $160,000 civil penalty to settle charges that he concealed damaging news in advance of a $60 million stock offering by the company in 2015.  Specifically, as the offering was preparing to close, Zeini learned that the Brazilian company that was Sientra's sole source for implants had lost a regulatory approval, but concealed that information from the underwriter and the company's general counsel.  When the news became public the day after the offering closed, Sientra's stock price fell over 50%.  SEC

July 18, 2019

Swapnil Rege, who worked as a portfolio manager for a hedge fund that operated as a commodity pool operator, was been ordered by the CFTC  and SEC to pay a $100,000 civil penalty and disgorge a $600,000 performance bonus he received as a result of his fraudulent mismarking the valuations of interest rate swaps.  The mismarking, accomplished through various means, artifically inflated the profitability of his trades, earning him a larger performance bonus.  SEC, CFTC
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