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SEC Enforcement Actions

					
The  (SEC) is the United States agency with primary responsibility for enforcing federal securities laws. Whistleblowers with knowledge of violations of the federal securities laws can submit a claim to the SEC under the SEC Whistleblower Reward Program, and may be eligible to receive 聽monetary rewards and protection against retaliation by employers.


Below are summaries of recent SEC settlements or successful prosecutions. If you believe you have information about fraud which could give 聽rise to an SEC enforcement action and claim under the SEC Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
July 11, 2018

				 The SEC filed fraud charges against a second defendant in connection with a scheme to manipulate the price of Fitbit securities through false regulatory filings. According to the SEC's complaint, Mark E. Burns purchased Fitbit call options just minutes before he and his co-conspirator, Robert W. Murray, filed a fake tender offer on the SEC's EDGAR system purporting to acquire Fitbit's shares at a substantial premium. The SEC charged Murray last year and he recently was sentenced to prison in a parallel criminal case. The false tender offer was made in the name of ABM Capital LTD 鈥� a nonexistent company for which the defendants created an EDGAR account. Fitbit's stock price temporarily spiked when the tender offer became publicly available on Nov. 10, 2016, and Burns sold all of his options for a 350 percent profit of approximately $13,000. 				 					 

						
Tagged in:
													  Misrepresentations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 5, 2018

				 Credit Suisse will pay a total of $77 million聽鈥� $47 million as a criminal penalty and $30 million in disgorgement and interest聽鈥� to resolve charges that it obtained investment banking business in the Asia-Pacific region by corruptly influencing foreign officials in violation of Foreign Corrupt 91吃瓜网 Act (FCPA).聽 The government charged that Credit Suisse attempted to secure banking business by offering of employment to family and friends of influential Chinese government officials.聽 ; ; 				 					 

						
Tagged in:
													  FCPA, 
													  Financial Institution Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 2, 2018

				 The SEC charged global engineering and construction company KBR Inc. with inflating a key, non-financial statement performance metric known as work in backlog.聽 KBR agreed to pay a $2.5 million penalty to settle the SEC鈥檚 charges. According to the SEC鈥檚 order, KBR鈥檚 public disclosures of its work in 鈥渂acklog鈥� were important to investors because the metric was supposed to represent the amount of revenue that KBR expected to receive in the future from 鈥渇irm orders鈥� under previously awarded contracts. However, the SEC鈥檚 order found that in the second quarter of 2012, KBR improperly included $459 million in its publicly disclosed backlog for a pipe fabrication and modular assembly contract in Canada, even though KBR had not actually received - and the counterparty was not obligated to provide - any orders under the contract. 				 					 

						
Tagged in:
													  Accounting Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 29, 2018

				 The SEC announced that Morgan Stanley Smith Barney (MSSB) has agreed to pay a $3.6 million penalty and to accept certain undertakings for its failure to protect against its personnel misusing or misappropriating funds from client accounts. According to the SEC鈥檚 order, MSSB鈥檚 insufficient policies and procedures contributed to its failure to detect or prevent one of its advisory representatives, Barry F. Connell, from misusing or misappropriating approximately $7 million out of four advisory clients鈥� accounts in approximately 110 unauthorized transactions occurring over a period of nearly a year. 				 					 

						
Tagged in:
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 28, 2018

				 The SEC charged a former Equifax manager with insider trading in advance of the company鈥檚 September 2017 announcement of a massive data breach that exposed Social Security numbers and other personal information of approximately 148 million U.S. customers. This is the second case the SEC has filed arising from the Equifax data breach.聽 In March, the former chief information officer of Equifax鈥檚 U.S. business unit was charged with insider trading. 				 					 

						
Tagged in:
													  Cybersecurity and Data Breaches, 
													  Insider Trading, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
July 2, 2018

				 Distilled spirits company Beam Suntory, Inc. agreed to pay more than $8 million to resolve charges that its Indian subsidiary made improper payments in violation of the FCPA.聽 Beam was alleged to have used third parties to make unlawful payments to government employees to induce them to process license and label registrations and purchase Beam's products.聽 The third parties submitted false and inflated invoices to Beam, which paid them through its Indian subsidiary.聽 				 					 

						
Tagged in:
													  FCPA, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 25, 2018

				 Wells Fargo Advisors settled charges with the SEC related to improper sales of market-linked investments. Wells Fargo allegedly gained large fees by encouraging its customers to actively trade the market-linked investments when in reality those investments were intended to be held until maturity. This strategy served only to increase Wells Fargo鈥檚 fees and reduce the return investors received. As a result of the settlement, Wells Fargo agreed to return the $930,377 in ill-gotten gains, pay $178,064 in interest, and pay a $4 million penalty. 				 					 

						
Tagged in:
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 19, 2018

				 The SEC has filed charges to shut down a $102M Ponzi scheme that affected investors throughout the US. According to the complaint, the scheme defrauded over 600 investors though sales of securities that the issuers controlled. The complaint charges five individuals and three companies with wrongdoing; it was filed in federal court in New York.聽				 					 

						
Tagged in:
													  Ponzi Schemes, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 12, 2018

				 Merrill Lynch, Pierce, Fenner & Smith Inc. has agreed to pay over $15 million to resolve allegations that its traders and salespersons overcharged Merrill Lynch customers for Residential Mortgage Backed Securities, pocketing the mark-ups as undisclosed commissions. According to the Commission, the bank failed to reasonably supervise its employees and to implement measures to prevent and detect the fraud. 				 					 

						
Tagged in:
													  Housing and Mortgage Fraud, 
													  Regulatory Violations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
June 4, 2018

				 June 4, 2018 鈥� New York-based investment adviser deVere USA, Inc. has agreed to pay an $8 million civil penalty related to its failure to disclose conflicts of interest to its retail clients. The SEC found the firm violated the Investment Advisers Act of 1940, including the antifraud provisions, by failing to disclose compensation agreements with overseas product and service providers which created incentives for deVere USA to recommend pension transfers using those particular providers.聽 The order also finds that deVere USA made materially misleading statements to clients concerning tax treatment and available investment options. The settlement will result in the establishment of a Fair Fund for distribution of the penalty to affected clients. The SEC also announced the filing of lawsuit against former deVere USA CEO, Benjamin Alderson, and a former manager, Bradley Hamilton. 				 					 

						
Tagged in:
													  Regulatory Violations, 
													  Securities Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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