Securities Fraud

March 8, 2022

The SEC has awarded more than $3.5 million to a whistleblower whose information significantly contributed to two successful enforcement actions by prompting staff to further investigate securities violations, saving time and resources, and helping to advance settlement discussions.  SEC

March 3, 2022

City National Rochdale, LLC agreed to a civil penalty just over $30 million to resolve SEC allegations that the registered investment adviser failed to disclose to discretionary account clients that it invested their assets in proprietary mutual funds that generated fees for CNR and its affiliates, rather than in competitor funds whose fees may be lower.  The government also alleged that CNR failed to fully inform certain prospective customers of fees with respect to its proprietary funds.  The disclosure failures resulted in an undisclosed conflict of interest according to the SEC.  SEC

February 28, 2022

The Income Collecting 1-3 Months T-Bills Mutual Fund and one of its principals, Victor Chilelli, have consented to judgments ordering the return $77 million to investors; litigation against other defendants continues.  The SEC alleges that defendants, including Ofer Abarbanel, defrauded investors by misrepresenting the planned use of their funds, directing customer funds to shell companies under their control in uncollateralized loan transactions, and misappropriating investor funds for high-risk trading. SEC

February 11, 2022

Defendants Seyed Taher Kameli and his companies, Chicagoland Foreign Investment Group, LLC and American Enterprise Pioneers, Inc., will pay jointly and severally $1.6 million after entering into a judgment for defrauding EB-5 immigrant investors. Kameli is an immigration attorney, some of whose clients were victims of the fraud. He promised at least 226 foreign investors that their $500,000 investments would finance construction of a senior living project and pave the way for at least 10 permanent full-time jobs, as well as qualifying each investor for a path to permanent U.S. residency. Instead, he commingled and misused some of the $88.7 million raised. Defendants are enjoined from further violations of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Kameli also agreed administratively to a 5-year suspension from practicing before the SEC as an attorney. SEC

January 20, 2022

Florida resident Mary Kathryn Marr was sentenced to 14 years in prison following her guilty plea on charges related to her role in a criminal enterprise that scammed victims into sending members of the conspiracy funds for fraudulent investments based on high-pressure “boiler room” tactics.  The conspirators operated a network of bank accounts in the names of shell companies into which the boiler room agents, and sometimes Marr herself, instructed victims to send their money.  The victims’ funds were then laundered through more bank accounts and sent overseas.  Marr was also ordered to forfeit various assets, pay a fine of $1.5 million, and pay restitution of $14.5 million to victims.  USAO MD FL

January 10, 2022

The SEC has issued two awards totaling more than $4 million to three whistleblowers whose information and assistance helped bring about two successful enforcement actions.  In the first order, a single whistleblower who reported internally before providing significant new information to the agency on an existing investigation was awarded $2.6 million.  According to the SEC, the misconduct occurred overseas and would have been difficult to detect without the whistleblower’s tip.  In the second order, two whistleblowers received a joint award of $1.5 million for providing substantial ongoing assistance.  SEC