On August 1, 2025, the Securities and Exchange Commission (“SEC”) announced (here) that it charged a Wisconsin resident and three limited liability companies that he owns and controls – Investors Capital LLC, Global Investors...more
The Custody Rule provides that “it is a fraudulent, deceptive, or manipulative act, practice or course of business within the meaning of section 206(4) of the [Advisers] Act … for [a registered investment adviser] to have...more
Pre-IPO investing involves buying a stake in a company before the company makes its initial public offering of securities. Many stock promoters invite potential investors to invest in a pre-IPO offering by providing an...more
2/10/2025
/ Broker-Dealer ,
Enforcement Actions ,
Financial Crimes ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Initial Public Offering (IPO) ,
Investment Funds ,
Private Equity ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Regulation
Two weeks ago, this Blog wrote about an enforcement action involving an investment adviser’s former co-chief investment officer who had been charged with running a more than $600 million cherry-picking scheme (here). Today,...more
12/23/2024
/ Cease and Desist Orders ,
Cherry Picking ,
Enforcement Actions ,
ETFs ,
False Statements ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Misleading Statements ,
Permanent Injunctions ,
Policies and Procedures ,
Securities ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Settlement
The Bank Secrecy Act (“BSA”) and implementing regulations promulgated by the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) require that broker-dealers file a suspicious activity report (SAR”) with...more
12/3/2024
/ Anti-Money Laundering ,
Bank Secrecy Act ,
Broker-Dealer ,
Cease and Desist ,
Censures ,
Civil Monetary Penalty ,
Compliance ,
Enforcement ,
Filing Requirements ,
FinCEN ,
Popular ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Settlement ,
Suspicious Activity Reports (SARs)
The Currency and Foreign Transactions Reporting Act, also known as the “BSA,” enacted in 1970, established requirements for record-keeping and reporting by banks and other financial institutions. The BSA is designed to, among...more
7/16/2024
/ Anti-Money Laundering ,
Banks ,
BSA/AML ,
Compliance ,
Cryptocurrency ,
Enforcement ,
Financial Crimes ,
Financial Institutions ,
FinCEN ,
Investors ,
Misleading Statements ,
Money Laundering Control Act (MLCA) of 1986 ,
Patriot Act ,
Recordkeeping Requirements ,
Securities and Exchange Commission (SEC) ,
Suspicious Activity Reports (SARs) ,
U.S. Treasury
By: Jeffrey M. Haber On many occasions, we have written about Ponzi schemes that have been the subject of enforcement actions brought by, and/or settlements with, the Securities and Exchange Commission (“SEC” or the...more
4/2/2024
/ Asset Freeze ,
Civil Penalty Fund ,
Crypto Exchanges ,
Cryptoassets ,
Disgorgement ,
Enforcement ,
Foreign Exchanges ,
Fraud ,
Freezing Order ,
Investment Advisers Act of 1940 ,
Investors ,
Permanent Injunctions ,
Ponzi Scheme ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Violations
It should come as no surprise that one of the goals of an investment fraud is the theft of customer funds for the scammer’s personal benefit. In legal parlance, this aspect of a fraudulent investment scheme is called...more
12/11/2023
/ Asset Management ,
Civil Monetary Penalty ,
Client Funds ,
Disgorgement ,
Embezzlement ,
Enforcement ,
Fiduciary Duty ,
Financial Adviser ,
Injunctive Relief ,
Investment Fraud ,
Misappropriation ,
Prejudgment Interest ,
Price Manipulation ,
Real Estate Investments ,
Securities and Exchange Commission (SEC)
In July of this year, we wrote about a fraud action involving the EB-5 Immigrant Investor Program (“EB-5 Program” or “Program”) (here). Under the EB-5 Program, investors are eligible for permanent residency status in the U.S....more
11/29/2023
/ EB-5 ,
Enforcement ,
False Statements ,
Foreign Direct Investment ,
Foreign Investment ,
Fraud ,
Fraud and Abuse ,
Immigrant Investor Program ,
Misleading Statements ,
Permanent Residence Cards ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Unregistered Brokers ,
Unregistered Securities ,
USCIS ,
Willful Misconduct
Affinity fraud is a type of investment fraud. In this form of fraud, the person committing the fraud preys upon members of an identifiable group, such as a religious or ethnic community, the elderly, or a professional group....more
10/25/2023
/ Asset Freeze ,
Enforcement ,
False Advertising ,
Fraud ,
Investment Advisers Act of 1940 ,
Investment Fraud ,
Ponzi Scheme ,
Pyramid Schemes ,
Restraining Orders ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934
We have often written about the SEC’s whistleblower program and, in particular, the success of the program with respect to detecting and preventing violations of the federal securities laws. The success of the program...more
10/10/2023
/ Cease and Desist Orders ,
Civil Monetary Penalty ,
Confidentiality Agreements ,
Dodd-Frank ,
Enforcement ,
Foreign Corrupt Practices Act (FCPA) ,
Investment Adviser ,
Non-Disclosure Agreement ,
Policies and Procedures ,
Restrictive Covenants ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Securities Fraud ,
Securities Violations ,
Severance Agreements ,
Whistleblower Protection Policies ,
Whistleblowers
On March 20, 2018, the United States Supreme Court decided Cyan, Inc. v. Beaver County Employees Retirement Fund, in which it unanimously held that the Securities Litigation Uniform Standards Act of 1998 does not strip state...more
9/6/2023
/ Audits ,
Class Action ,
Compliance ,
Corporate Management ,
Disclosure Requirements ,
Financial Statements ,
Healthcare ,
Investment ,
Investors ,
Loss Causation ,
Material Misrepresentation ,
Omissions ,
Scienter ,
Section 11 ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Shareholders ,
Subject Matter Jurisdiction ,
Uniform Standards