Securities Industry Commentator by Bill Singer Esq

December 3, 2021

SEC Obtains Final Judgment Against Kirk Sperry and Sperry and Sons Capital Investments, LLC in Offering Fraud (SEC Release)

Former CEO Of Real Estate Private Equity Investment Firm Sentenced To 5 Years In Prison For $58 Million Securities Fraud (DOJ Release)

Texas Man Sentenced to 12 Years in Prison for Defrauding Business Opportunity Buyers of More Than $5 Million (DOJ Release)

Two Iranian Nationals Indicted in Local Cryptojacking Case (DOJ Release)

Former Chief Financial Officer and Former Head of Corporate Communications of $21 Billion Biopharmaceutical Company Arrested for Insider Trading (DOJ Release)

SEC Charges Pharma CFO and Former Partner with Insider Trading (SEC Release)

SEC Charges Latvian Citizen With Digital Asset Fraud (SEC Release)

SEC Charges Two in Fraudulent Microcap Scheme (SEC Release)

Holding Foreign Companies Accountable Act Disclosure (SEC Release)

Remarks before the Investor Advisory Committee by SEC Chair Gary Gensler

Remarks before the Investor Advisory Committee by SEC Commissioner Hester M. Peirce

The European-Style Consolatory Cheek Kiss, the UBS Lawsuit, and the Certified Question (BrokeAndBroker.com Blog)

Did You Hear About The FINRA Arbitration Against Fidelity For Dental Pain and Suffering? (BrokeAndBroker.com Blog)

SEC Obtains Final Judgment Against Kirk Sperry and Sperry and Sons Capital Investments, LLC in Offering Fraud (SEC Release)
https://www.sec.gov/litigation/litreleases/2021/lr25278.htm
READ the Corrected Final Judgment 
https://www.sec.gov/litigation/litreleases/2021/judgment25278.pdf
As alleged in part in the SEC Release:

On December 1, 2021, the U.S. District Court for the Western District of Washington entered final judgment as to monetary relief against Washington resident Kirk Sperry and his company, Sperry and Sons Capital Investments, LLC, whom the SEC previously charged with defrauding investors by making false and misleading statements about a failing real estate investment project.

The final judgment finds Sperry and Sons liable for $125,000 in disgorgement, $34,480 in prejudgment interest, and a $125,000 civil penalty, for a total of $284,480, and Kirk Sperry liable for a $125,000 civil penalty.

The SEC's complaint, filed on September 9, 2020, [see Litigation Release No. 24889], alleged that Kirk Sperry and Sperry and Sons defrauded two investors by providing them with misleading statements regarding their investments, and that Sperry and Sons used part of the money received from the investors to pay back investors in unrelated Sperry and Sons projects.

Kirk Sperry and Sperry and Sons previously agreed to a bifurcated settlement, entered by the Court on May 5, 2021, [see Litigation Release No. 25090], whereby, without admitting or denying the SEC's allegations, the defendants consented to the entry of judgments that permanently enjoined them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

Former CEO Of Real Estate Private Equity Investment Firm Sentenced To 5 Years In Prison For $58 Million Securities Fraud (DOJ Release)
https://www.justice.gov/usao-sdny/pr/former-ceo-real-estate-private-equity-investment-firm-sentenced-5-years-prison-58
Eric Malley, the founder/former Chief Executive Officer of real-estate private equity investment firm MG Capital Management L.P., pled guilty in the United States District Court for the Southern District of New York to one count of securities fraud, and he was sentenced to 60 months in prison plus three years of supervised release, and ordered to pay $33,249,822.12 in restitution and to forfeit $5,625,747.45. As alleged in part in the DOJ Release:

MALLEY founded MG Capital Management L.P. ("MG Capital") in approximately January 2013, and served as its chief executive officer and chief investment officer from that time until approximately December 2019.  During that time, MALLEY formed two real estate investment funds (collectively, "the Funds") - MG Capital Management Residential Fund III ("Fund III"), in approximately February 2014, and MG Capital Management Residential Fund IV ("Fund IV"), in approximately September 2017.

MALLEY promised, when soliciting investors and throughout the life of the Funds, that the Funds represented an opportunity to own an equity interest in hundreds of luxury income-producing properties across Manhattan, following a debt-free investment strategy purportedly informed by sophisticated proprietary analytics that MALLEY had developed over the course of his career in real estate.  MALLEY touted two purportedly extremely successful prior funds he had formed, Fund I and Fund II; assured investors that the Funds would be and were debt-free; and represented that the properties held by the Funds would be and were leased primarily to corporate tenants, including, among others, well known technology companies and a prominent university based in New York City with which Malley had pre-existing agreements.  But MALLEY's representations were false.  Funds I and II did not exist.  The Funds were not debt-free, but instead held mortgaged properties. The properties that made up the Funds were almost entirely leased to individual, not corporate, tenants.  Malley did not have the corporate relationships or pre-existing agreements he touted.  The Funds held far fewer properties than MALLEY had represented.  And although Malley promised the investments were fully protected from loss, they were not.

MALLEY induced approximately 335 investors to invest a total of approximately $58 million in the Funds through these and other fraudulent misrepresentations.  The Funds together incurred millions of dollars in losses and are currently being liquidated.

https://www.justice.gov/usao-nj/pr/texas-man-sentenced-12-years-prison-defrauding-business-opportunity-buyers-more-5-million
David Weinstein, 62, pled guilty in the United States District Court for the District of New Jersey to an Information charging him with conspiracy to commit wire fraud and money laundering, and he was sentenced to 144 months in prison plus three years of supervised release, and ordered to pay $5.85 million in restitution and to forfeit $1.98 million. Previously, Vijay Reddy plead guilty to an Information charging him with conspiracy to commit wire fraud and wire fraud and is awaiting sentencing. . 

From December 2015 through November 2020, Weinstein and his conspirators, Vijay Reddy and Kevin Brown, advertised business opportunities for sale on various websites. They purported to sell "blocks" of contracts with medical providers who allegedly wanted to outsource their medical billing, collections, appeals, answering, credentialing, or transcription functions. The buyers would then provide the contracted services to the medical providers and earn a profit. The conspirators promised to deliver a specified number of providers and pledged that their proprietary marketing efforts would provide a guaranteed client base to the buyers.

To induce buyers to purchase the business opportunities, the conspirators created fake references purporting to be buyers who vouched for their prior business purchases from the conspirators. In fact, the references were Weinstein, Reddy, and their friends and family members, and they used aliases and disguised phone numbers to speak with potential buyers.

After agreeing to purchase the blocks of medical providers, victims entered contracts with companies represented by Weinstein or Reddy and wired down payments ranging from $15,000 to $240,000 to accounts controlled by Weinstein or Brown. The remainder of each purchase price was payable when the conspirators fulfilled the contract by delivering the agreed-upon number of providers.

After receiving the down payments, Weinstein and Reddy typically delivered to each victim only a small number of medical providers. Despite not fulfilling the contracts of any of the buyers identified by law enforcement, the conspirators continued to sell blocks of medical providers to new buyers and refused to provide refunds for their failures to satisfy the terms of the contracts. The conspirators also periodically sold batches of previously signed contracts and disclaimed further responsibility for those contracts to insulate themselves from complaints or legal action from disgruntled buyers.

Brown acted as the business broker for most of the transactions and received a commission for the sales he brokered. Reddy or Weinstein acted as the seller and signed the contracts with the victims. Approximately 90 victims sent more than $5 million to accounts controlled by the defendants. The defendants spent the victims' money on personal expenses, including a travel, jewelry, real estate, a wedding and a college education, and other business investments.
https://www.justice.gov/usao-edmo/pr/two-iranian-nationals-indicted-local-cryptojacking-case
In an Indictment filed in the United States District Court for the Eastern District of Missouri, Danial Jeloudar and Saeeid Safaei were charged with conspiracy to commit wire fraud. As alleged in part in the DOJ Release: 

Cryptojacking is when cyber criminals fraudulently gain access to a victim's device to use its computing power to generate or "mine" cryptocurrency. Computing power is needed for a virtual master ledger that uses complicated algorithms to verify and record cryptocurrency transactions. Individuals or groups can dedicate their computer power and be rewarded with cryptocurrency.

According to court documents, both defendants conspired to victimize a technology company in St. Charles, Missouri by fraudulently gaining access and using the company's account on a cloud service. By misrepresenting themselves through the victim company's account, the defendants fraudulently authorized the cloud service provider to build and install at least five new computer servers in the cloud. The purpose of the new servers was to run and operate software programs to generate cryptocurrency.

The fraud came to light when the victim company received a bill of more than $760,000 from the cloud service provider related to the use of fraudulent servers.

https://www.justice.gov/usao-nj/pr/former-chief-financial-officer-and-former-head-corporate-communications-21-billion
-and-
https://www.sec.gov/news/press-release/2021-249

In a Complaint filed in the United States District Court for the District of New Jersey
https://www.justice.gov/usao-nj/press-release/file/1452836/download, Usama Malik and Lauren S. Wood were charged with securities fraud. As alleged in part in the DOJ Release:

From 2018 through October 2020, Malik was the chief financial officer (CFO) of a New Jersey-based biopharmaceutical company listed on the NASDAQ Stock Exchange. On April 6, 2020, Company-1 publicly announced for the first time that its breast cancer drug - an antibody-based drug designed to treat certain breast cancer patients who had very limited treatment options beyond chemotherapy - had proven effective in pre-market clinical trials. In October 2020, Biopharmaceutical Company-2 acquired Company-1 for approximately $21 billion. 

As Company-1's CFO, Malik was among the first, and one of the few, employees who received the material non-public information about the breast cancer drug before the April 6, 2020 announcement. Within minutes of obtaining that information, Malik passed it along to Wood, who lived with Malik at the time and was formerly the head of corporate communications for Company-1. Malik also provided the non-public information to a number of his relatives.  Before April 6, 2020, and within hours of receiving the insider information from Malik, Wood placed an order for approximately 7,000 shares of Company-1 stock, despite the fact that Company-1 stock had recently been downgraded by financial experts. After Company-1 announced on April 6, 2020, that its cancer drug had proven effective in pre-market clinical trials, Company-1's stock price increased. After selling her shares, Wood more than doubled her investment, realizing gross profits of $213,618, and returning $65,000 to Malik.

In a Complaint filed in the United States District Court for the District of New Jersey
https://www.sec.gov/litigation/complaints/2021/comp-pr2021-249.pdf, the SEC charged Immunomedics' former Chief Financial Officer, Usama Malik, and what the SEC Release characterizes as his "his former romantic partner," Lauren S. Wood with insider trading in the company's stock. As alleged in part in the SEC Release:

[W]hile serving as CFO of Immunomedics, Usama Malik learned that the FDA had permitted the company to halt a clinical trial for a breast cancer drug because the existing trial data provided compelling evidence that the drug was effective. The complaint alleges that Malik - who was subject to a trading "black-out" that prohibited him and anyone living in his household from purchasing Immunomedics stock - immediately tipped Lauren S. Wood, with whom he lived at the time, as well as three family members. According to the complaint, Wood and two of the family members then bought Immunomedics stock, as did an account in the name of the third family member's spouse. As alleged, after Immunomedics announced the FDA's decision, its stock price nearly doubled, resulting in a gain of $67,060 to Wood and a combined gain of approximately $21,000 to the family members. The complaint further alleges that, when Malik was asked about Wood's trading as part of an inquiry by the Financial Industry Regulatory Authority (FINRA), he failed to identify her as his romantic partner and falsely claimed that he had not communicated with her during the relevant period.

https://www.sec.gov/news/press-release/2021-248
In a Complaint filed in the United States District Court for the Eastern District of New York
https://www.sec.gov/litigation/complaints/2021/comp-pr2021-248.pdf, the SEC charged Ivars Auzins with violating the antifraud and registration provisions of the federal securities laws. As alleged in part in the SEC Release:

In the first scheme, the complaint alleges that, from January 2018 through March 2018, Auzins fraudulently offered and sold unregistered digital tokens as part of an ICO of Denaro, a purported "multi-currency debit card platform." Specifically, the complaint alleges that Auzins falsely claimed Denaro enabled users to store their digital assets in a secure digital wallet and then spend them "like any other debit card" which could be provided by a credit card issuer. In fact, the complaint alleges, all of the claimed products or services being offered were fictitious, including the relationship with the credit card issuer. Finally, the complaint alleges that Auzins misappropriated all of the ICO's proceeds.

In the second scheme, the complaint alleges that, from April 2019 to July 2019, Auzins fraudulently offered the unregistered securities of Innovamine, which purportedly offered a cloud mining program.  According to the complaint, Auzins claimed that investors could contribute digital assets to Innovamine, and then the company would perform mining activities and provide investors with a daily "automatic payout . . . in whichever coin they mine." The complaint alleges that these promises were untrue, and that Auzins misappropriated nearly all of the funds raised in the offering.      

https://www.sec.gov/litigation/litreleases/2021/lr25276.htm
https://www.sec.gov/litigation/complaints/2021/comp25276.pdf, the SEC charged 
Vincenzo Carnovale and Amar Bahadoorsingh with violating Sections 5(a), 5(c), 17(a)(1), and 17(a)(3) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rules 10b-5(a) and (c) thereunder; and further charges Bahadoorsingh with violating Section 17(a)(2) of the Securities Act and Rule 10b-5(b) under the Exchange Act. In August 2021, the SEC brought a separate case against Bahadoorsingh and others, charging them with securities fraud and other alleged violations of the federal securities laws, based on separate alleged conduct. As alleged in part in the SEC Release:

[F]rom 2016 through at least October 2020, Canadian residents Vincenzo Carnovale and Amar Bahadoorsingh secretly gained control of thinly traded microcap companies, hired stock promoters to create demand for their stock, and generated substantial illicit profits by selling the stock to unsuspecting investors. Carnovale and Bahadoorsingh allegedly hid the fact that they controlled the securities of publicly traded companies. They allegedly misled investors, brokers, and transfer agents (companies that maintain records of stock ownership) in order to convince these parties that the defendants' stock shares were eligible for trading in the public markets, when in fact their stock was not appropriately registered for sale with the SEC. They also allegedly caused the microcap companies to make materially false and misleading statements in their publicly filed financial statements and reports. Additionally, Bahadoorsingh allegedly fabricated documents that he provided to brokers and transfer agents, in order to avoid due diligence procedures those parties had in place to comply with the securities laws.

Holding Foreign Companies Accountable Act Disclosure (SEC Release, Rel. No.34-93701; IC-34431; File No. S7-03-21)
https://www.sec.gov/rules/final/2021/34-93701.pdf
As set forth in the "Summary" portion of the Final Rule:

We are adopting amendments to finalize interim final rules that revised Forms 20- F, 40-F, 10-K, and N-CSR to implement the disclosure and submission requirements of the Holding Foreign Companies Accountable Act ("HFCA Act"). The final amendments apply to registrants that the Securities and Exchange Commission ("Commission") identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board ("PCAOB") is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. Consistent with the HFCA Act, the amendments require the submission of documentation to the Commission establishing that such a registrant is not owned or controlled by a governmental entity in that foreign jurisdiction and also require disclosure in a foreign issuer's annual report regarding the audit arrangements of, and governmental influence on, such registrants.

https://www.sec.gov/news/statement/gensler-iac-statement-120221

Thank you. It's good to be back with the Investor Advisory Committee again. As is customary, I will note that my views are my own, and I'm not speaking on behalf of my fellow Commissioners or the staff.

I'd like to thank the members for volunteering their time to provide us with advice. In addition to the important work you're doing, I understand you'll be announcing today a new Subcommittee on Disclosure. That's a great addition to the fold.

Since the SEC's founding in the Great Depression, we've been requiring disclosure of important information from companies.

The basic bargain is this: Investors get to decide what risks they wish to take. Companies that are raising money from the public have an obligation to share full and fair information with investors on a regular basis. Investors also are protected against fraud. There's a reason President Roosevelt called the '33 Act the "Truth in Securities" law.

Over the intervening decades, there have been many enhancements to those disclosures. Each change has been with an eye to our three part mission - investors, capital formation, and that which is in the middle, the efficiency of capital allocation.

Today, we have a number of projects related to how we can update disclosure regimes for modern markets.

This is about investors. Today, investors increasingly want to understand the climate and cybersecurity risks, as well as the human capital, of the companies whose stock they own or might buy. Large and small investors, representing literally tens of trillions of dollars, are looking for consistent, comparable, and decision-useful disclosures in these areas to determine whether to invest, sell, or make a voting decision one way or another.

I look forward to hearing from your new Subcommittee on those areas.

Today, I understand that you'll be holding panel discussions on the crypto markets and the importance of protecting senior investors, as well as also making recommendations with respect to Individual Retirement Accounts.

I can't stress how important it is to continue to protect older investors and those who are trusting their retirement savings to our markets. We at the SEC take that obligation seriously, and it gets to the heart of our work. I look forward to the readouts from all these conversations.

As to the crypto markets, I'd like to share a few thoughts.

First, Satoshi Nakamoto's "Bitcoin Whitepaper"[1] and the crypto markets that followed have been catalysts for change. This innovation challenged some early financial technologies: money and ledgers. It also has challenged incumbent business models of trading, lending, and collectibles, as well as the official sector.

Second, with a $2.6 trillion aggregate market capitalization and more than 100 tokens purportedly with market capitalizations each more than $1 billion,[2] this is an asset class that belongs inside public policy frameworks of looking after investors, guarding against illicit activity, and protecting our financial stability.

Third, unfortunately, this asset class is rife with fraud, scams, and abuse in certain applications. There's a great deal of hype and spin about crypto assets and crypto projects. In many cases, investors aren't able to get rigorous, balanced, and complete information on tokens or trading and lending platforms.

Fourth, right now, we just don't have enough investor protection in crypto. The American public is buying, selling, and lending crypto on trading, lending, and decentralized finance (DeFi) platforms, where there are significant gaps in investor protection.

This leaves markets open to manipulation. This leaves investors vulnerable. If we don't address these issues, I worry a lot of people will be hurt.

Fifth, many of these tokens are offered and sold as securities. There's actually a lot of clarity on that front. In the 1930s, Congress established the definition of a security, which included about 20 items, like stock, bonds, and notes.

One of the items is an investment contract. I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight.

A typical trading platform has more than 50 tokens on it. While each token's legal status depends on its own facts and circumstances, the probability is quite remote, with 50 or 100 tokens, that any given platform has zero securities.

Make no mistake: To the extent that there are securities on these trading platforms, under our laws they have to register with the Commission unless they meet an exemption.

Make no mistake: If a lending platform is offering securities, it also falls into SEC jurisdiction.

Sixth, it's best not to wait for a big spill on aisle three - the crypto aisle, with all its tokens, trading and lending going on - to clean up the investor protection issues.

Thus, I'd like to ask anybody who may be operating crypto platforms or issuing crypto tokens, please, come in and talk to the staff at the SEC. To the extent there are challenges about how to register or come into compliance, we'd like to hear what those are. The staff is standing by, ready to better understand if any bespoke adjustments may be appropriate. At the same time, investors should receive the same protections they receive in other asset classes.

For those who want to encourage innovations in crypto, I'd like to note that financial innovations throughout history don't long thrive outside of our public policy frameworks. If this field is going to continue, or reach any of its potential to be a catalyst for change, we'd better bring it into public policy frameworks.

I'll close with that. Thank you.

[1] See http://satoshinakamoto.me/whitepaper/.

[2] See https://coinmarketcap.com/.

https://www.sec.gov/news/statement/peirce-iac-statement-120221

Thank you, Jennifer [Marietta-Westberg], for chairing this committee, and thank you to Heidi [Stam] for your leadership as well. We will miss your insights and are grateful for your contributions over the years. Welcome to the new officers of the Committee and the new Disclosure Subcommittee: Christopher [Mirabile], Leslie [Van Buskirk], Brian [Hellmer], and Cambria [Allen-Ratzlaff]. I look forward to working with you in your new capacities.

Today's meeting addresses two issues that deserve attention-elder financial abuse and crypto. With respect to the former, I am very much looking forward to the discussion about older investors' unique susceptibility to fraud and how the SEC can help combat it.

The Investor Advisory Committee's consideration of crypto is also much needed. Certainly, all of us in this virtual room have a shared interest in preventing people from falling prey to fraudsters peddling crypto, and, human nature being what it is, there is no shortage of such fraudsters. I expect that aspect of investor protection will be a big part of today's discussion. Other aspects of investor protection, however, also merit consideration:

  • Regulatory Clarity. When a regulator clearly delineates rules, people trying to do the right thing can work within those rules and investors can more distinguish the fraudsters from the legitimate actors. The SEC has not provided clarity in response to repeated questions on crypto from reputable players, but has instead embraced an approach that has been described aptly to me as "strategic ambiguity." Such an approach facilitates enforcement actions, but it is costly and treacherous for well-intentioned developers and their lawyers. This Committee, speaking for investors, can urge the Commission to tackle questions such as:

    • If a token is sold as part of an investment contract, must it always trade as a security? If so, how will that work in practice?
    • Can a platform trade crypto securities alongside traditional securities and non-securities? How would such a platform register with us?
    • Who can custody crypto and how?
    • What aspects of non-fungible token markets might implicate the securities laws?

  • Investor Access. The Commission recently took the big step of permitting bitcoin futures-based exchange-traded funds. We have yet to approve a spot exchange-traded product ("ETP") despite many applications over the last four years. Many commentators have noted the unsatisfying reasoning the Commission has relied on in allowing bitcoin futures-based products, but prohibiting spot products. Other countries have moved ahead with spot products. Substitute products offering some level of exposure to bitcoin but usually at higher prices and without the same level of convenience have emerged in our markets. Our denials, the most recent of which the Commission issued just yesterday,[1] hint that spot products are not getting approved because we do not regulate bitcoin trading venues. Forcing investors who want exposure to crypto through traditional investment products into more expensive and less efficient wrappers is hardly the hallmark of an investor protection-focused regulatory scheme. My objections to the Commission's approach to date are well known, but perhaps this Committee can help shine some light on the harm to investors resulting from the Commission's refusal to allow a spot bitcoin ETP.

  • Individual Liberty. Congress has charged us with regulating the securities markets, but it has not charged us with surveilling every financial transaction or overriding investor decisions. As we regulate the crypto markets, we should be thinking about whether unique aspects of the technology-its transparency and its objective participation criteria embedded in the code-make it possible for us to regulate with a lighter hand so that people can be more free in their financial lives. People find value in using tools like stablecoins and decentralized finance ("DeFi"), so we should take care not to use regulation to force them into our comfort zone by, for example, replacing stablecoins with central bank digital currencies and DeFi with the centralized intermediaries of traditional finance.

I hope some of these themes will weave their way into your discussions, any recommendations that emerge from them, and then into our regulatory approach. Thank you to all of the members of the Committee and today's panelists. I look forward to the discussions.

= = =

[1] Order Disapproving a Proposed Rule Change to List and Trade Shares of the WisdomTree Bitcoin Trust under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares, Release No. 34-93700 (Dec. 1, 2021), available at https://www.sec.gov/rules/sro/cboebzx/2021/34-93700.pdf.

http://www.brokeandbroker.com/6193/kiss-ubs-at-will-contract/
In the immortal lyrics of "As Time Goes By," a kiss is just a kiss, but, as the 1940s gave way to the 2020s, I'm not quite sure that the sentiment still resonates. You could ask former Governor Andrew Cuomo for his take on the issue. Be that as it may, speaking about how once held beliefs change with time, we got a former UBS employee suing his former employer and co-worker. And there's the question of whether a kiss was just a kiss and what it means to be an at-will employee and if a breach of contract can occur notwithstanding the lack of a written contract and . . . gee, maybe the problems of three little people don't amount to a hill of beans in this crazy world, but, who knows, someday you'll understand that, or maybe not, maybe you'll just be dazed and confused for all eternity.

http://www.brokeandbroker.com/6192/finra-arbitration-dental/
There are times -- too many -- when FINRA's version of alternative dispute resolution seems little more than a cash register. What the public should expect from FINRA's version of mandatory customer arbitration is some minimal amount of disclosure replete with content and context so as to make a given case intelligible. If all the parties desire enhanced confidentiality, that's fine, but at least note that choice in an Award. In most FINRA arbitration cases, the presentation of the underlying facts raises more questions than answers, and the pronouncement of the Award often raises more doubts than explanations. See a recent FINRA public customer Award for an example.