The Securities and Exchange Commission today announced settled charges against Murchinson Ltd.; its principal, Marc Bistricer; and its trader, Paul Zogala (the respondents), for providing erroneous order-marking information that caused executing brokers to violate Regulation SHO. In addition, Murchinson and Bistricer settled charges for causing a dealer to fail to register with the SEC.

According to the SEC's order, from June 2016 through October 2017, the respondents provided erroneous order-marking information on hundreds of sale orders of their hedge fund client to the hedge fund's brokers, causing those brokers to mismark the hedge funds' sales as "long." The order finds that in providing the inaccurate information, the respondents also caused the hedge fund’s brokers to fail to borrow or locate shares prior to executing the sales. The order further finds that Murchinson and Bistricer caused the hedge fund to engage in dealer activity without registering with the SEC...

The Securities and Exchange Commission today charged a former employee of California-based Medivation Inc. with insider trading in advance of Medivation's announcement that it would be acquired by pharmaceutical giant Pfizer Inc.

According to the SEC's complaint, filed in the U.S. District Court for the Northern District of California, Matthew Panuwat, the then-head of business development at Medivation, a mid-sized, oncology-focused biopharmaceutical company, purchased short-term, out-of-the-money stock options in Incyte Corporation, another mid-cap oncology-focused biopharmaceutical company, just days before the Aug. 22, 2016, announcement that Pfizer would acquire Medivation at a significant premium. Panuwat allegedly purchased the options within minutes of learning highly confidential information concerning the merger. According to the complaint, Panuwat knew that investment bankers had cited Incyte as a comparable company in discussions with Medivation and he...

The Securities and Exchange Commission today announced that Pearson plc, a London-based public company that provides educational publishing and other services to schools and universities, agreed to pay $1 million to settle charges that it misled investors about a 2018 cyber intrusion involving the theft of millions of student records, including dates of births and email addresses, and had inadequate disclosure controls and procedures.

The SEC's order finds that Pearson made misleading statements and omissions about the 2018 data breach involving the theft of student data and administrator log-in credentials of 13,000 school, district and university customer accounts. In its semi-annual report, filed in July 2019, Pearson referred to a data privacy incident as a hypothetical risk, when, in fact, the 2018 cyber intrusion had already occurred. And in a July 2019 media statement, Pearson stated that the breach may include dates of births and email addresses, when, in fact,...

The Securities and Exchange Commission today announced it charged an issuer, its CEO, and six other entities and individuals with participating in a penny stock fraud scheme. The SEC also charged certain of the participants with operating as unregistered dealers, and obtained emergency relief to halt their ongoing conduct.

According to the SEC's complaint, filed in the United States District Court for the Southern District of New York, GPL Ventures purchased, since at least July 2017, more than 1.5 billion shares of HempAmericana Inc. stock through a Regulation A offering, with the understanding that HempAmericana would use a portion of the offering proceeds to secretly finance stock promotions that would enable GPL Ventures to sell its HempAmericana shares at a profit. The complaint alleges that HempAmericana misled investors regarding its use of the offering proceeds, and that co-defendants Seaside Advisors and Lawrence Adams paid a stock promoter who, in turn, funded...

The Securities and Exchange Commission and the European Central Bank (ECB) today announced the signing of a Memorandum of Understanding (MOU) to consult, cooperate, and exchange information in connection with the supervision, enforcement, and oversight of certain security-based swap dealers and major security-based swap participants that are registered with the SEC and supervised by the ECB. This is the first MOU between the SEC and ECB.

The MOU was executed on Aug. 16, 2021, and is intended to facilitate the SEC's oversight of all SEC-registered security-based swap entities in EU Member States participating in the Single Supervisory Mechanism (SSM). The SSM refers to the system of banking supervision in the European Union. It is composed of the ECB and the relevant national competent authorities of participating EU Member States. 

The MOU will also support the SEC's oversight of the operation of substituted compliance orders that the Commission has...

The Securities and Exchange Commission today announced that it filed an emergency action and obtained a temporary restraining order, an asset freeze, and the appointment of a receiver to stop an alleged Ponzi scheme and misappropriation of investor proceeds perpetrated by Coral Springs, Florida resident Johanna M. Garcia and two entities she controls.

According to the SEC's complaint, which was filed in federal court in the Southern District of Florida, since about June 2020, Garcia and her companies raised at least $70 million from more than 2,150 investors in a fraudulent securities offering. The complaint alleges that Garcia, and her companies MJ Capital Funding LLC and MJ Taxes and More Inc. told investors that offering proceeds would be used to fund small business loans called "merchant cash advances," and promised investors annual returns of 120-180%. In fact, according to the complaint, the defendants only made, at most, $2.9 million in...

The Securities and Exchange Commission today announced the filing of an emergency action against Martin A. Ruiz of New York, and two entities he controls, Carter Bain Wealth Management, LLC (Carter Bain) and RAM Fund, LP (RAM). Shortly after filing the complaint, the SEC obtained a temporary restraining order and asset freeze against Ruiz, Carter Bain, and RAM to stop an allegedly ongoing fraudulent securities offering through which Ruiz and his entities allegedly misappropriated millions of dollars from investors.

According to the SEC's complaint, filed in the United States District Court for the Southern District of New York on Aug. 6, 2021, and unsealed Aug. 12, 2021, Ruiz induced at least 56 investors, many of whom are elderly clients of Ruiz's New Mexico-based investment adviser Carter Bain, to invest at least $10.6 million in RAM by falsely claiming that their funds would be used to acquire real estate and to make commercial loans. According to the complaint,...

The Office of Minority & Women Inclusion (OMWI) is sponsoring a roundtable panel discussion with leaders from Historically Black Colleges and Universities (HBCUs) business and law schools. The event's focus will be on developing sustained relationships that result in impactful outcomes for both HBCU students and partner organizations like the SEC..

Panelists include: Pamela A. Gibbs (SEC-Moderator), Jo Ann Rolle (Dean-Medgar Evers School of Business); David A. Green (Professor of Law-North Carolina Central University Law School/General Counsel-NBA), John K. Pierre (Chancellor-Southern University Law Center); and Isaac McCoy (Dean-Stillman College School of Business)

The panelist will discuss among other topics: what tangible and substantive steps agency’s should take in order to develop a mutually beneficial relationship with HBCUs; the importance of student financial education and how partner organizations can assist with these efforts; the challenges...

This position is in the Division of Enforcement's Cyber Unit and is located in Washington, D.C., New York, Philadelphia, Chicago, Los Angeles or San Francisco. The Unit focuses on protecting investors and markets from cyber-related misconduct, working with federal and local partners, market participants and others to monitor developments and effectively respond to cyber threats.

The Securities and Exchange Commission today announced awards of nearly $6 million to two whistleblowers who provided information and assistance in separate enforcement proceedings.

In the first order, the SEC awarded more than $3.5 million to a whistleblower who reported valuable new information that caused the SEC to expand an existing investigation into a new geographic area. The whistleblower then provided supplemental information and assistance that helped the SEC bring the charges in the underlying enforcement action.

In the second order, the SEC awarded more than $2.4 million to a whistleblower who alerted the SEC to previously unknown conduct, prompting the opening of the investigation, and thereafter met with SEC staff, provided documents, and identified potential witnesses.

"With today's orders, the SEC has made whistleblower awards to 14 individuals in less than a month, reflecting the SEC's commitment to reward whistleblowers who...

The Securities and Exchange Commission today announced an emergency action charging nine individuals, including a public company chairman, for their participation in long-running fraudulent schemes that collectively generated hundreds of millions of dollars from unlawful stock sales and caused significant harm to retail investors in the United States and around the world. The SEC has obtained emergency relief in court, including an order to freeze the defendants’ assets.

According to the SEC’s complaint unsealed today, Canadian resident Frederick L. Sharp masterminded a complex scheme from 2011 to 2019 in which he and his associates – Canadian residents Zhiying Yvonne Gasarch and Courtney Kelln – enabled control persons of microcap companies whose stock was publicly traded in the U.S. securities markets to conceal their control and ownership of huge amounts of penny stock.  They then surreptitiously dumped the stock into the U.S. markets in violation of federal...

The Securities and Exchange Commission today announced that Poloniex LLC has agreed to pay more than $10 million to settle charges for operating an unregistered online digital asset exchange in connection with its operation of a trading platform that facilitated buying and selling of digital asset securities.

The SEC’s order finds that from July 2017 through November 2019, when Poloniex sold its platform, Poloniex operated a web-based trading platform that facilitated buying and selling digital assets, including digital assets that were investment contracts and therefore securities.  According to the SEC’s order, the Poloniex trading platform met the criteria of an “exchange” as defined by the securities laws because the trading platform provided the non-discretionary means for trade orders to interact and execute through the combined use of the Poloniex website, an order book, and the Poloniex trading engine.  The order finds that notwithstanding its operation...

The Securities and Exchange Commission today announced awards totaling more than $3.5 million to three individuals in two separate enforcement proceedings.

In the first order, the SEC awarded approximately $2 million to a whistleblower whose information and assistance led to a successful SEC enforcement action.  The whistleblower alerted SEC staff to an ongoing fraud, prompting the opening of an investigation.  The whistleblower also participated in multiple voluntary interviews, and provided documents and additional information that saved staff time and resources. 

In the second order, the SEC awarded one whistleblower approximately $1 million and a second whistleblower approximately $500,000.  While both whistleblowers independently provided valuable information that assisted the staff in an existing investigation, the whistleblower receiving the larger award provided information and cooperation that was more impactful to the overall success...

The Securities and Exchange Commission today charged two Florida men and their Cayman Islands company for unregistered sales of more than $30 million of securities using smart contracts and so-called “decentralized finance” (DeFi) technology, and for misleading investors concerning the operations and profitability of their business DeFi Money Market.   

According to the SEC’s order, Gregory Keough, Derek Acree, and their company Blockchain Credit Partners offered and sold securities in unregistered offerings through DeFi Money Market from February 2020 to February 2021. The order finds that they used smart contracts to sell two types of digital tokens: mTokens that could be purchased using specified digital assets and that paid 6.25 percent interest, and DMG “governance tokens” that purportedly gave holders certain voting rights, a share of excess profits, and the ability to profit from DMG governance token resales in the secondary market.

According to...

The Division of Investment Management (IM) works to support the SEC in its mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. IM regulates investment companies, variable insurance products, and federally registered investment advisers. The Analytics Office is seeking to fill one Supervisory Financial Analyst position.

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The Securities and Exchange Commission today charged accounting firm Ernst & Young LLP (EY), one of its partners, and two of its former partners with improper professional conduct for violating auditor independence rules in connection with EY's pursuit to serve as the independent auditor for a public company with nearly $5 billion in revenue (issuer). Separately, the Commission brought charges against the Issuer's then-Chief Accounting Officer for his role in the misconduct. All respondents have agreed to settle the charges and will collectively pay more than $10 million in monetary relief.

The SEC's order against the auditors finds that EY, EY partner James Herring, CPA, and former EY partners, James Young, CPA and Curt Fochtmann, CPA improperly interfered with the issuer's selection of an independent auditor by soliciting and receiving confidential competitive intelligence and confidential audit committee information from the issuer's then-Chief...

The Securities and Exchange Commission today announced awards of more than $4 million to four whistleblowers who provided information and assistance in two separate enforcement proceedings.

In the first order, the SEC awarded more than $2 million to a whistleblower who provided valuable information that resulted in SEC staff initiating an investigation, as well as ongoing assistance that included participating in multiple interviews and identifying key individuals and entities. The SEC also awarded more than $150,000 to another whistleblower, whose information prompted SEC staff to expand its investigation into other alleged conduct at the relevant company.

In the second order, the SEC awarded more than $1.1 million to a whistleblower who reported misconduct internally and was the first to alert the SEC to the violations. The SEC also awarded another whistleblower more than $500,000. While the second whistleblower’s information was important, the...

The Securities and Exchange Commission today announced charges 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 he raised more than $9 million from over 100 investors. 

The SEC’s complaint alleges that Skinner, who touted himself to investors as a successful real estate investor and dealmaker, made multiple misrepresentations to investors and misappropriated millions of dollars of investor funds.  The SEC contends that Skinner told investors their money would be used to finance specific real estate projects or investments, projecting and, in some cases, guaranteeing double-digit annual returns.  The SEC alleges that instead Skinner spent substantial amounts of investor funds on...