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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.
August 16, 2017
The Securities and Exchange Commission today announced insider trading charges against seven individuals who generated millions in profits by trading on confidential information about dozens of impending mergers and acquisitions.聽 Data analysis allowed the SEC鈥檚 enforcement staff to uncover the illicit trading despite the traders鈥� alleged use of shell companies, code words, and an encrypted, self-destructing messaging application to evade detection. In a parallel action, the U.S. Attorney鈥檚 Office for the Southern District of New York today unsealed criminal charges against the same seven individuals. According to the SEC鈥檚 complaint, Daniel Rivas, a former IT employee of a large bank, was at the center of the alleged scheme, misusing his access to a bank computer system to tip four individuals who traded on the information. 聽 See also, October 2018 guilty pleas.August 15, 2017
The Securities and Exchange Commission today announced that KPMG has agreed to pay more than $6.2 million to settle charges that it failed to properly audit the financial statements of an oil and gas company, resulting in investors being misinformed about the energy company鈥檚 value.聽 KPMG鈥檚 engagement partner in charge of the audit, John Riordan also agreed to settle charges against him. According to the SEC鈥檚 order, KPMG was hired as the outside auditor for Miller Energy Resources in 2011 and issued an unqualified audit report despite grossly overstated values for key oil and gas assets.聽 KPMG and Riordan failed to properly assess the risks associated with accepting Miller Energy as a client and did not properly staff the audit, which overlooked the overvaluation of certain oil and gas interests that the company had purchased in Alaska the previous year.August 11, 2017
The Securities and Exchange Commission today charged David R. Greenlee, David A. Stewart Jr., and Richard 鈥淩ic.鈥� P. Underwood in Fort Lauderdale with allegedly defrauding investors they lured by false promises of high returns from an oil drilling investment opportunity. The SEC alleges that Greenlee and Stewart weren鈥檛 registered to sell investments and used fake names like 鈥淒ave Johnson鈥� when speaking to investors in order to hide their past criminal records, and they diverted nearly two-thirds of the money raised from investors to pay themselves and their salesmen as well as advertise for new investors.聽The SEC鈥檚 complaint further alleges that Underwood helped Greenlee and Stewart draft false offering brochures, and he oversaw a boiler room sales team of telemarketers in Florida as they solicited investors nationwide.August 2, 2017
The Securities and Exchange Commission today announced that Joe Yiu Cheung has agreed to pay nearly $800,000 and be permanently barred from involvement in penny stocks after hiding his significant stake in a small oil & gas company while secretly funding a fraudulent promotional campaign that artificially boosted the company鈥檚 stock price before he dumped his shares. SEC enforcement investigators uncovered the fraud by peeling back layer upon layer of shell companies and nominee owners to reveal that Joe Yiu Cheung controlled United American Petroleum Corp. (UAPC).聽 According to the SEC鈥檚 order, Cheung utilized an elaborate network of overseas bank and brokerage accounts mostly in bank secrecy jurisdictions to conceal his UAPC ownership.聽 In addition, he did not file required reports that would have publicly disclosed his burgeoning ownership of UAPC stock.聽 Cheung paid for the issuance of promotional materials to 2.2 million U.S. residents, inducing investors with rosy falsehoods about UAPC鈥檚 operations and prospects.聽October 12, 2017
Posted 10/12/17
The Securities and Exchange Commission announced a whistleblower award of more than $1 million for providing the SEC with new information and substantial corroborating documentation of a securities law violation by a registered entity that impacted retail customers. It represents the 47th SEC whistleblower award and brings the total payouts under the SEC Whistleblower Program to more than $162 million.