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‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInFormer CEOs of MoviePass and Parent Company Charged in Securities Fraud Scheme | DOJ
The indictment alleges Farnsworth and Lowe falsely claimed that MoviePass’s $9.95 “unlimited” plan – in which new subscribers could see “unlimited” movies in theaters with no blackout dates for a flat monthly fee of $9.95 – was tested, sustainable, and would be profitable or break even on subscription fees alone. Farnsworth and Lowe allegedly knew […]
Founder Of Cyberfraud Prevention Company Sentenced To Five Years In Prison For Defrauding Investors Out Of Over $100 Million | DOJ
Damian Williams, the United States Attorney for the Southern District of New York, announced that ADAM ROGAS, the co-founder and former CEO, CFO, and member of the board of directors of a Las Vegas-based cyberfraud prevention company NS8, Inc. (“NS8”), was sentenced today in Manhattan federal court to five years in prison for engaging in […]
SEC Charges Man for Defrauding Investors out of Millions of Dollars by Posing as Hedge Fund Billionaire
According to the SEC’s complaint, Costello portrayed himself to the public as a seasoned, licensed investment professional who was building a conglomerate in the cannabis industry. His alleged false representations included credentials as a Harvard MBA, experience managing a $1.15 billion hedge fund, and years of experience on Wall Street. As alleged in the complaint, […]
Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firm’s Massive Financial Losses | Department of Justice
In late 2020, McDonald lost tens of millions of dollars of Hercules client money after adopting a risky short position that effectively bet against the health of the United States economy in the aftermath of the U.S. presidential election. McDonald projected that the COVID-19 pandemic and the election would result in major selloffs that would […]
SEC Charges VMware with Misleading Investors by Obscuring Financial Performance
The Securities and Exchange Commission today charged VMware Inc. for misleading investors about its order backlog management practices, which enabled the Palo Alto, California-based technology company to push revenue into future quarters by delaying product deliveries to customers, concealing the company’s slowing performance relative to its projections. The SEC’s order finds that, beginning in fiscal […]
Lawsuit accuses troubled crypto lender Celsius Network of fraud | Reuters
A former investment manager at Celsius Network sued the crypto lender on Thursday, saying it used customer deposits to rig the price of its own crypto token and failed to properly hedge risk, causing it to freeze customer assets. The complaint said Celsius ran a Ponzi scheme to benefit itself through “gross mismanagement of customer […]
The crypto crime wave is real and it’s gotten worse. – Los Angeles Times
The growth in crypto fraud has turned exponential in recent years. The reported losses from crypto scams in 2021 were 60 times larger than in 2018, the Federal Trade Commission reported earlier this month, with crypto now accounting for 1 out of every 4 dollars lost to fraud in the reports monitored by the agency. […]
SEC Charges Company and Former CEO with Misleading Investors about Sale of Covid-19 Test Kits
The SEC’s complaint alleges that, with SCWorx struggling financially, Schessel and SCWorx issued a press release on April 13, 2020, falsely stating that SCWorx had a “committed purchase order” from a purported buyer to purchase two million COVID-19 rapid test kits. The press release further stated that the purchase order included a “provision for additional […]
SEC Charges CEO and President of Synergy Settlement Services with Fraudulent Operation of Special Needs Pooled Trusts
The SEC alleges that Lazarus and Prieto formed the Foundation for Those with Special Needs, Inc. as a non-profit company to “assist personal injury victims with special needs.” The defendants, however, concealed from the beneficiaries, the Internal Revenue Service, and the Social Security Administration that they diverted at least $775,000 in trustee and joinder fees […]
SEC Charges Financial Company and Its President with Engaging in Fraudulent Schemes to Boost Stock Price
According to the SEC’s complaint, Medallion’s core business was making loans backed by taxicab medallions to taxicab owners and operators. However, the popularity of ride-sharing companies like Uber and Lyft led to a decline in the value of taxicab medallions and of Medallion’s stock price. Murstein and Medallion allegedly directed two separate schemes to inflate […]