‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInA Skeptical Stock Analyst Wins Big by Seeking Out Frauds – The New York Times
Mr. Anderson’s five-person firm, which takes its name from the German airship that blew up in 1937, is a newbie in the world of finance. Founded in 2017, Hindenburg specializes in publishing detailed reports about publicly traded companies, poking holes in their stories and alerting investors to potential malfeasance. The boom in special purpose acquisition […]
SEC Charges Founder of Nikola Corp. With Fraud
The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that Milton founded Nikola in 2015 with the primary goal of manufacturing trucks that run on alternative fuels with low or zero emissions, and building an alternative fuel station infrastructure to support those vehicles. Milton allegedly helped Nikola raise […]
Trevor Milton: Grand jury indicts Nikola founder on three counts of fraud
Trevor Milton, founder of EV start-up Nikola, was indicted on three counts of criminal fraud by a federal grand jury for allegedly lying about “nearly all aspects of the business,” according to the indictment, which was unsealed Thursday. The U.S. Attorney’s Office in Manhattan accused the billionaire, who resigned as chairman in September, with two […]
Longfin CEO Settles Fraud Action
The Securities and Exchange Commission today announced that Longfin Corp. CEO Venkata S. Meenavalli has agreed to pay $400,000 in disgorgement and penalties to resolve the SEC’s fraud action against him. The settlement, which remains subject to court approval, concludes the SEC’s actions against Longfin, its CEO, and three other individuals in which the SEC […]
Everything Everywhere Is Securities Fraud – Bloomberg
This is mostly a theory of U.S. law. It is also not an exactly accurate statement of U.S. law, and sometimes courts actually reject everything-is-securities-fraud theories, but it is a good practical tool for predicting whether a scandal at a U.S. public company will lead to a securities-fraud lawsuit. It always predicts that the answer will be “yes,” and […]
SEC Charges Former Executives of Plastics Manufacturer with Fraud
According to the SEC’s complaint, Lucent Polymers, Inc. premised its business model on its ability to transform “garbage to gold” – that is, to use low-grade, non-prime feedstock to develop high-quality plastics. The company’s near-magic “garbage to gold” process, the SEC alleges, was a huge commercial success. However, the complaint alleges that Lucent’s business model […]
Is Not Telling the ‘Whole Truth’ Securities Fraud? –
Does complying with company disclosure procedures and consulting with legal counsel protect public-company CFOs from liability arising from statements made in press releases and during investor conferences? Based on a recent federal court jury verdict against David Johnston, the former CFO of Aveo Pharmaceuticals, the answer appears to be: It depends. via Is Not Telling […]
Ex-financial advisor Dawn Bennett found guilty in $20M Ponzi scheme case | Financial Planning
After deliberating for under five hours Wednesday, a federal jury convicted Bennett on 17 charges, including false statements on a loan application and three kinds of fraud: securities, bank and wire. The case notably had some unusual elements for a securities fraud trial. FBI agents searching Bennett’s penthouse found evidence of voodoo-type witchcraft, specifically instructions […]
SEC Charges Technology Fund Adviser, Founder in Fraudulent Scheme
The SEC’s complaint alleges that Michael B. Rothenberg, 34, marketed his advisory firm, Rothenberg Ventures LLC, as uniquely positioned to identify millennial entrepreneurs and invest in “frontier technology” companies. According to SEC filings, Rothenberg’s funds had nearly 200 investors and more than $64 million in assets. The SEC’s complaint alleges that over a three-year period, Rothenberg […]
SEC Charges Failed Fyre Festival Founder and Others With $27.4 Million Offering Fraud
The SEC’s complaint alleges that McFarland fraudulently induced investments into his companies Fyre Media, Inc., Fyre Festival LLC, and Magnises, Inc., including in connection with McFarland’s failed venture to host a “once-in-a-lifetime” music festival in the Bahamas. With substantial assistance from Grant H. Margolin, his Chief Marketing Officer, and Daniel Simon, an independent contractor to […]