| |

SEC

The USA's Securities and Exchange Commission has issued proceedings against Jose Luis Casero Sanchez alleging insider trading. That's not the interesting stuff.

BIScom Subsection: 

The USA's Securities and Investment Commission has issued proceedings against Sky Group USA LLC, a payday loan company based in Miami, and its CEO, Efrain Betancourt, Jr. alleging fraud in the issue of some USD66 million of promissory notes, primarily within the Venezuelan community in what the SEC calls "affinity fraud" but which we have for several decades referred to as "intra-community fraud."

BIScom Subsection: 

More than 100 people put more than USD10 million dollars into, amongst other things, a fake food business. That's a lot of money on average so we can assume these were not stupid people. George S. Blankenbaker Jr., 56 found a honey hole and worked it hard. His reward is jail.

That's not the end of the story...

Blotics Ltd., a UK publisher, has agreed a settlement with US regulator the Securities and Exchange Commission arising from the publication of articles about initial coin offerings. The articles were "accessible in the United States." But there's more and the case raises more questions than it answers.

BIScom Subsection: 

From an SEC press notice, 13th July 2021 (slightly edited)

"The Securities and Exchange Commission today announced [proceedings] against special purpose acquisition corporation Stable Road Acquisition Company, its sponsor SRC-NI, its CEO Brian Kabot, the SPAC’s proposed merger target Momentus Inc., and Momentus’ founder and former CEO Mikhail Kokorich [alleging] misleading claims about Momentus’ technology and about national security risks associated with Kokorich. "

BIScom Subsection: 

The Securities and Exchange Commission has issued civil proceedings against Matthew J. Skinner of Santa Clarita, California and five entities he owns and controls – Empire West Equity Inc., Bayside Equity LP, Longacre Estates LP, Freedom Equity Fund LLC, and Simple Growth LLC – for conducting four unregistered and fraudulent real estate investment offerings between 2015 and 2020, through which, it is alleged, he raised more than USD9 million from over 100 investors.

Foster Wheeler Limited a UK registered subsidiary of a complex group, part of which is listed on the USA's NASDAQ and therefore falls within the jurisdiction of many US laws even though it is a Swiss domiciled subsidiary of a UK group. Amongst those is the Foreign Corrupt Payments Act or FCPA. This relates to payments by a person with a US footprint making corrupt payments to persons outside the USA. Foster Wheeler Energy Limited is also part of the same group and is also a UK registered company. That brings its actions squarely within the remit of the Serious Fraud Office, regardless of where those actions take place. Moreover, there are agreements with Ministério Público Federal (‘MPF’), the Comptroller General’s Office (‘CGU’) and the Solicitor General (‘AGU’) in Brazil.

One would have thought that Initial Coin Offerings had been a flash in the pan and already out of fashion. And that may, to a point, be so: their heyday was, of course, three or four years ago.

But the essential problem seems to be that things take a while to filter through so that, when stories reactivate interest, everything old becomes new again, to coin a phrase. So the news that a case relating to conduct in 2017 and 2018 may be the spark that reignites burning embers as some people remember the concept of the ICO and think "that might be a way to help my business that's struggling through the CoVid-19 Pandemic.

BIScom Subsection: 

They call it "financial exploitation of seniors" and refer to "World Elder Abuse Awareness Day" but cut through the froth and the Securities and Exchange Commission, The North American Securities Administrators' Association and the Financial Industry Regulatory Authority have started something useful at a time when the elderly are increasingly vulnerable to both actual frauds and misunderstandings caused by rapidly-changing financial environment.

BIScom Subsection: 

Morningstar has been mounting a persistent advertising campaign on LinkedIn recently. It it, it promotes its due diligence services. An announcement by the USA's Securities and Exchange Commission raises several questions, not the least of which is "who or what is Morningstar"?

BIScom Subsection: 

This press release from the USA's Securities and Investment Commission is about an old-fashioned (alleged) fund management fraud in which crypto-assets were the hook by which investors were encouraged to put money into a scheme which was not, says the SEC, what the promoters said it was.

The USA's Securities and Exchange Commission has announced its 100th award under its whistleblower scheme. It's the 33rd this year.

CoNet Section: 

The USA's Securities and Exchange Commission as done a deal with Power Solutions International Inc. of Chicago to "settle accounting fraud" allegations related to the company's overstatement of revenues by almost USD25 million.

It's not a criminal case so technically they are not "charges" which is how the SEC refers to them. And there's no judgment because the case didn't go to court. So the term "Order" is an administrative not a judicial document of record. Also, while the buzz is about "accounting fraud" the "fraud" was not the offence which the SEC proceeded with - that was filing misstated accounts.

Having cleared that up, the case is interesting: remember ENRON, anyone?

CoNet Section: 

In a congressional hearing in 1987, US Congressman Norman F Lent of New York put it to the Chairman of the USA's Securities and Exchange Commission, John SR Shad that Rudolph William Louis ("Rudy") Giuliani, then the US Attorney for the Southern District of New York, had a better public relations office than the SEC, it appearing that it was his office that had done all the work in the insider dealing case centred around Boesky, Milken, Levine and Drexel, Burnham, Lambert. Shad's explanation of the relationship which holds good today.

BIScom Subsection: 

Wells Fargo & Co and its subsidiary Wells Fargo Bank, N.A, have escaped prosecution, at least for the time being, by agreeing to hand over USD3,000 million to various agencies and departments of the US Government. It all started when the company decided it needed more account holders. Normal banks advertise or put young people on the streets with flyers. Wells Fargo had a different and shorter route - it would just create accounts for people, even if they hadn't asked for them. And that's not the full extent of what the bank is paying.

BIScom Subsection: 

Pages

hahagotcha