Vero Beach Man Sentenced To 15 Years In Federal Prison For More Than $40 Million In Fraud (DOJ Release)Wall Street clearing firm proposes 1-day trade settlement after Robinhood controversy (CNBC by Maggie Fitzgerald)Court Imposes Fraud Injunction and Penny Stock Bar On Individual and Orders Judgments of Over $14 Million Against Entities That Facilitated International Microcap Scheme (DOJ Release)Final Defendant Sentenced in $7 Billion Investment Fraud Scheme (DOJ Release)Former COO Of Publicly Traded Biopharmaceutical Company Sentenced For Accounting Fraud (DOJ Release)CEO of Medifirst Solutions, Inc. Arrested for Securities Fraud / Defendant Allegedly Received Kickbacks from a Corrupt Broker and Concealed the Role of Paid Promoters from Investors (DOJ Release)
[R]idling is a farmer. Over the course of three years, Ridling attempted to defraud five financial institutions, one financial services provider, and one local Orlando business out of over $50 million. Ridling's scheme involved the use of false brokerage account statements, fabricated tax returns, and false financial statements to obtain loans and lines of credit.As part of his scheme, Ridling falsely claimed that three individuals were his account representatives at a financial brokerage company and set up fake email accounts for two of those individuals without their consent or knowledge. Assuming the identities of those two individuals, Ridling sent emails from the fake email accounts in an effort to convince lenders that he had millions of dollars in his two brokerage accounts. In fact, Ridling only had one brokerage account, which never had more than $2,000 in it. During the last year of Ridling's scheme, he was able to obtain three loans totaling more than $25 million, based in part on his claim that his brokerage accounts had millions of dollars. During that timeframe, Ridling's brokerage account had less than $2.00.In total, Ridling was successful in receiving over $40 million in proceeds from his scheme, and he attempted to receive another $15 million from another victim. Ridling used some of the proceeds that he obtained from his victims to pay amounts that he owed to other victims, prolonging his scheme.
[K]illarney and Ciapala, as alleged, coordinated the illegal stock sales with Steve M. Bajic, a citizen of Canada and Croatia, and Rajesh Taneja, a Canadian citizen. The complaint further alleged that Bajic and Taneja used a network of foreign companies they controlled, including Tamarind and SSID, to buy and sell stock in order to conceal the ownership interest of numerous companies' control persons.On February 1, 2021, the court entered a final judgment against Killarney, enjoining him from future violations of the securities registration provisions of Sections 5(a) and (c) of the Securities Act, the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder, and the reporting provisions of Section 13(d) of the Exchange Act, and from acting as an unregistered broker or dealer under Section 15(a) of the Exchange Act. The judgment imposes a penny stock bar and orders disgorgement of ill-gotten gains and/or penalties for Killarney in an amount to be determined at a later date by the court. On February 23, 2021, the court entered final judgments by default against Blacklight, Tamarind, and SSID and, among other relief, ordered each to pay disgorgement and prejudgment interest that combined totaled more than $13.5 million. The court also ordered Blacklight to pay a penalty of $963,837.
served as the administrator and CEO of the FSRC, an agency of the Antiguan government. As part of his duties, he was responsible for Antigua's regulatory oversight of Stanford International Bank Limited's (SIBL) investment portfolio, including the review of SIBL financial reports and responses to requests by foreign regulators, including the SEC, for information and documents about SIBL's operations.
In or about 2005, the SEC began investigating R. Allen Stanford and Stanford Financial Group (SFG) and made official inquiries with the FSRC regarding the value and content of SIBL's purported investments.King admitted that Stanford's cash payments to King totaled approximately $520,963.87 over the course of the conspiracy. Stanford also provided King tickets to both Super Bowl XXXVIII in Houston (2004) and Super Bowl XL in Detroit (2006). In addition, Stanford provided King with repeated flights on private jets Stanford or SFG entities owned. King later denied the SEC's request for help, and he wrote that the FSRC "had no authority to act in the manner requested and would itself be in breach of law if it were to accede to your request." In reality, the FSRC did have this authority and failed to exercise it because of the payments and other benefits Stanford gave to King.A federal jury found Stanford guilty in June 2012 for his role in orchestrating a 20-year investment fraud scheme in which he misappropriated $7 billion from SIB to finance his personal businesses. He is serving a 110-year prison sentence. Five others were also convicted for their roles in the scheme and received sentences ranging from 3 to 20 years in federal prison
MiMedx was headquartered in Marietta, Georgia, and its securities traded under the symbol "MDXG" on the NASDAQ. MiMedx sold regenerative biologic products, such as skin grafts and amniotic fluid, both directly to end users, such as public and private hospitals, and to various stocking distributors, which, in turn, resold the product to end users.One of the most critical financial metrics disclosed in MiMedx's public filings with the Securities and Exchange Commission ("SEC"), and touted in MiMedx's accompanying press releases, was MiMedx's quarterly and annual sales revenue. Under Generally Accepted Accounting Principles (GAAP) and SEC guidance, a company like MiMedx that engages in the sale of products through a distributor may recognize revenue upon transfer of the product to a distributor if certain requirements are satisfied, including that delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable, and collectability of payment is reasonably assured. TAYLOR and Petit, MiMedx's former chief executive officer, repeatedly demonstrated and touted their understanding of these rules governing revenue recognition. They also publicly identified revenue as the principal metric reflecting MiMedx's growth, and touted MiMedx's consistent record of quarter-over-quarter revenue growth and meeting or exceeding revenue guidance in 17 consecutive quarters, from 2011 through year-end 2015. By 2015, however, it became increasingly difficult for MiMedx to reach its revenue guidance due to decreased demand from certain distributors and the increasingly aggressive revenue targets that MiMedx had publicly announced.Confronted with the difficulties faced by MiMedx in meeting its quarterly and annual revenue guidance by legitimate means, TAYLOR and Petit orchestrated a fraudulent scheme to falsely recognize revenue upon the shipment of MiMedx product to four stocking distributors, CPM, SLR, Stability Biologics ("Stability"), and First Medical, in the second through fourth quarters of 2015. TAYLOR and Petit caused MiMedx to report fraudulently inflated revenue figures to the investing public in order to ensure that the reported figures fell within MiMedx's publicly announced revenue guidance, and to fraudulently convey to the investing public that MiMedx was accomplishing consistent growth quarter after quarter, as TAYLOR and Petit had falsely touted to the investing public. The fraudulent scheme involved the following central features:
TAYLOR and Petit's fraudulent manipulation of MiMedx's revenue caused MiMedx to report materially inflated revenue in the second, third, and fourth quarters of 2015, and for the full year 2015. In its 2015 10-K, MiMedx reported annual revenue that was fraudulently inflated by approximately $8.2 million. Absent this fraudulent inflation of revenue, MiMedx would have missed both (1) its quarterly revenue guidance in the third and fourth quarters of 2015 and annual revenue guidance for 2015 and (2) analyst revenue consensus for the second through fourth quarters of 2015 and the full year 2015. As a result of the fraud, shareholders sustained losses of approximately $35 million.
[B]etween May 2016 and January 2019, Schoengood, together with others, engaged in a scheme to defraud MFST investors by manipulating the volume of MFST stock and concealing the sale of that stock by others. Specifically, Schoengood entered into sham consulting agreements with a co-conspirator (Co-Conspirator 1) so that Co-Conspirator 1 would appear to be working for MFST. Schoengood then transferred MFST stock to Co-Conspirator 1 and made false statements in public filings and related filings to enable the shares to be deposited and sold by Co-Conspirator 1, so that Co-Conspirator 1 and an investment relations firm could participate in the undisclosed promotion of MFST stock. Schoengood also issued stock to co-conspirators so that they could sell their shares into the artificially created volume by Co-Conspirator 1 and the investment relations firm, then "kickback" portions of the proceeds to Schoengood.
[B]eginning in December 2016, Schoengood caused Medifirst to make an unregistered issuance of 20 million shares of its stock to Tyrell pursuant to a sham consulting agreement. As alleged, Schoengood and Tyrell were aware that the shares were actually intended to compensate Tyrell for promoting Medifirst's stock. Schoengood and Tyrell allegedly further misled Tyrell's brokerage firm by representing that the shares were being issued to Tyrell for legitimate consulting services and that Tyrell was not involved in promoting Medifirst's stock. Tyrell then allegedly sold over 19 million shares of Medifirst stock in the public market without registration for proceeds of approximately $125,000. The SEC's action also charged Schoengood with arranging manipulative purchases designed to keep Medifirst's stock price from falling over several months in 2017.
The SEC's separate orders against Gulfport and Moore find that, from 2014 to 2018, Gulfport failed to disclose approximately $650,000 in executive compensation in the form of perquisites received by Moore, and also failed to disclose certain related person transactions involving Moore. According to the orders, the undisclosed perquisites included the cost of Moore's use of Gulfport's chartered aircraft for certain travel. The undisclosed perquisites also included costs associated with Moore's use of a Gulfport corporate credit card for personal expenses that he did not repay on a timely basis, which resulted in Gulfport extending Moore interest-free credit and carrying a related person account receivable. The orders also find that Gulfport failed to disclose that it paid Moore's son's landscaping company approximately $152,000 in 2015 for its services. The order against Moore further finds that Moore caused Gulfport's violations by failing to supply required information that would have allowed Gulfport to identify and disclose the perquisites and related person transactions.The SEC's order as to Gulfport notes Gulfport's significant cooperation with the SEC's investigation and its remedial efforts, which included replacing key personnel, developing an internal audit function, enhancing existing policies and procedures, and instituting new review and tracking processes, and that this cooperation and remediation was taken into account in the determination to accept the company's settlement offer.
Today, I am directing the Division of Corporation Finance to enhance its focus on climate-related disclosure in public company filings. The Commission in 2010 provided guidance to public companies regarding existing disclosure requirements as they apply to climate change matters. As part of its enhanced focus in this area, the staff will review the extent to which public companies address the topics identified in the 2010 guidance, assess compliance with disclosure obligations under the federal securities laws, engage with public companies on these issues, and absorb critical lessons on how the market is currently managing climate-related risks. The staff will use insights from this work to begin updating the 2010 guidance to take into account developments in the last decade.The staff of the SEC plays a critically important role in ensuring compliance with disclosure obligations, including those that implicate climate risk, through its review of public company filings and its engagement with issuers. The perspective the staff brings to bear is invaluable in helping to ensure that issuers comply with their obligations and that investors receive the information they need to properly inform their investment decisions.Now more than ever, investors are considering climate-related issues when making their investment decisions. It is our responsibility to ensure that they have access to material information when planning for their financial future. Ensuring compliance with the rules on the books and updating existing guidance are immediate steps the agency can take on the path to developing a more comprehensive framework that produces consistent, comparable, and reliable climate-related disclosures.