During the period December 2019 to February 2021, a cumulative total of more than 400 call center personnel were not registered, or timely registered, despite their engaging in conduct requiring registration. During this time, TCI used a contracted, third-party vendor to administer the Transamerica call centers to handle calls and requests from Transamerica variable product policy holders who had transaction requests related to securities. These securities transaction requests included customer orders for investment of additional premiums, reallocations of contract value among subaccounts, and withdrawals of contract value.

These call center personnel handling transaction requests related to securities were associated persons of TCI, and thus required to be registered in the category of registration appropriate to his or her functions. Although TCI determined to register certain of the call center personnel prior to the relevant period herein, and had advised FINRA of that fact, the firm failed to register, or timely register, these individuals before they engaged in the conduct requiring registration described above. By February 2021, the firm had made changes to the Transamerica call centers with regard to the handling of policy holder requests relating to Transamerica variable products, had approximately 175 individuals registered with TCI who handled policy holder requests relating to  Transamerica variable products, and had established policies, procedures, and systems prohibiting call center personnel who were not registered from addressing transaction requests involving Transamerica variable products.

Therefore, TCI violated FINRA Rules 1210 and 2010. 

[I]n August 2017, Matthews advised two victims that he  could make investments on their behalf and with very high rates of return. Matthews acted as the  victims’ investment team lead, and demanded that they needed to maintain an investment account with him exceeding $550,000.  Based on Matthews’ false assurances and representations regarding what were, in fact, non-existent investment opportunities, along with his threat to injure the victims if they did not continue to make payments, the victims made over 4,000 cash drops to Matthews. In addition, on March 23, 2022, Matthews was in in the custody of two special agents with the Federal Bureau of Investigation due to a lawful arrest relating to federal felony charges.  Matthews attempted to escape from custody, but agents were able to prevent him from fleeing.

Cape Coral Caretakers Plead Guilty To Stealing More Than Half A Million Dollars From Elderly Victim (DOJ Release)
https://www.justice.gov/usao-mdfl/pr/cape-coral-caretakers-plead-guilty-stealing-more-half-million-dollars-elderly-victim
In the United States District Court for the Middle District of Florida, Diane Durbon and Brittany Lukasik pled guilty to conspiracy to commit wire fraud; and, additionally, Lukasik pled guilty to filing a false tax return. As part of their guilty pleas, Durbon and Lukasik have agreed to forfeit a 2016 Nissan Rogue, 2020 Kia Sorento, real property in Cape Coral, and approximately $542,760.23, which are traceable to proceeds of the offenses. As alleged in part in the DOJ Release:

[D]urbon and her daughter, Lukasik, a registered nurse, were first hired in approximately 2016 to be caretakers for T.H., the 92-year-old victim. In October 2017, Durbon began unlawfully accessing T.H.’s investment accounts. To unlawfully gain access to the investment accounts, Durbon would place T.H. on the phone to answer various account security questions. Video surveillance cameras that Durbon had installed inside T.H.’s home captured Durbon putting a script that contained answers to account security questions in front of T.H. before and during each phone call.

After being given authorization to speak to the investment account representative on T.H.’s behalf, Durbon would move funds from T.H.’s investment accounts into a Prime Money Market Account (PMMA) that also functioned as a checking account. After transferring the funds, checks were unlawfully issued to Lukasik, ranging in amounts from $1,000 to $9,600, which were deposited into bank accounts that Lukasik controlled and maintained. Between November 2017 and July 2019, approximately $231,659 in checks were issued to Lukasik from T.H.’s PMMA account.

Beginning in approximately November 2018, Durbon also unlawfully gained access to T.H.’s annuity policy, similarly to how she had unlawfully gained access to T.H.’s investment accounts. In January 2019, Durbon faxed a fraudulent Annuity Withdrawal form which misrepresented that T.H. wanted to cash out her annuity policy. This caused the annuity company to issue a check to T.H. in the amount of $244,521.09. The check was deposited into one of T.H.’s checking accounts. After the check was deposited, approximately 92 checks, totaling $372,092.98, were issued to Lukasik from T.H.’s checking account between February 2019 and March 2020. The checks were deposited into bank accounts that Lukasik controlled and maintained. Moreover, Lukasik failed to report receipt of any of T.H.’s funds in her 2019 tax return.

In total, between January 2019 and March 2020, approximately $542,760.23 in fraudulently obtained funds were deposited into Lukasik’s accounts. After the funds were deposited, Lukasik and Durbon used the funds to pay off debt and make a variety of purchases. Those purchases included paying $26,354.05 for a 2018 Nissan Rogue, $17,735.17 to pay off a car loan, more than $29,000 to pay student loan debt, and more than $100,000 in credit card payments. Lukasik and Durbon also used the funds to purchase a duplex in Cape Coral, and more than $100,000 of the fraudulently obtained proceeds were used to buy electronics, furniture, and to remodel the duplex.

Man Sentenced to 30 Months in Federal Prison for Defrauding Investors of 2 Companies, Evading Taxes (DOJ Release)
https://www.justice.gov/usao-ct/pr/man-sentenced-30-months-federal-prison-defrauding-investors-2-companies-evading-taxes
In the United States District Court for the District of Connecticut, Brian Hughes, 58, pled guilty to one count of wire fraud, one count of making an illegal monetary transaction, and one count of tax evasion; and he was sentenced to 30 months in prison plus three years of supervised release, and ordered to pay $2,991,880 in restitution. As alleged in part in the DOJ Release:

[I]n March 2015, Hughes founded Handcrafted Brands, LLC (“HCB”), for the purpose of raising money to purchase Salute American Vodka, (“Salute”) an alcoholic beverage company. Hughes subsequently solicited and received funds from dozens of investors ostensibly for the purchase and subsequent development of Salute.  Hughes used the first investment he received, in the amount $150,000, to pay his taxes and his American Express credit card expenses.  Although HCB purchased Salute in June 2016 for $450,000, Hughes continued to solicit investments from investors and used hundreds of thousands dollars in invested funds for expenses unrelated to Salute.  He also used funds to pay off an earlier investor under the guise of a return on a prior investment made by the earlier investor, which is commonly known as a “lulling” payment.

Hughes also solicited investments purportedly on behalf of another company, which is identified in court documents as “Company-1.” In fact, Hughes had no official relationship with Company-1 and could not raise capital on its behalf.  Hughes spent the money he received for this investment on personal expenses, to pay earlier investors, and on business related to Salute.

Finally, Hughes evaded the assessment of his tax obligations for the 2015 through 2018 tax years by substantially underreporting his income to the IRS, resulting in a tax loss of $470,880.

Central Florida Man Pleads Guilty To Committing Almost $20 Million In Fraud (DOJ Release)
https://www.justice.gov/usao-mdfl/pr/central-florida-man-pleads-guilty-committing-almost-20-million-fraud
In the United States District Court for the Middle District of Florida, Nikesh Ajay Patel pled guilty to one count of conspiracy to commit wire fraud, three counts of wire fraud, one count of conspiracy to commit money laundering, and eight counts of money laundering. As alleged in part in the DOJ Release:

[P]atel, a Central Florida resident, was charged in 2014 by the U.S. Attorney’s Office in the Northern District of Illinois for a $179 million fraud scheme. He was arrested and released on bond. For the next several years, Patel claimed that he was cooperating with authorities and using his business skills to get funds to repay some of what he owed. In fact, Patel had devised a new scheme that netted him almost $20 million.

Patel’s new fraud scheme involved three parts. First, Patel fabricated fraudulent loan documents that falsely represented that a bank in Miami had authorized loans to be made to convert hotels in rural areas into assisted living facilities. Although the bank in Miami exists, it had never made any of the loans. The person who was listed as signing the loans (“Ron Elias”) was a fictitious identity used by Patel to perpetrate his conspiracy and scheme. Second, Patel applied to the United States Department of Agriculture (USDA) to guarantee the fake loans pursuant to its Business and Industry Guaranteed Loan Program. Third, after the USDA agreed to guarantee the fake loans, Patel sold the guaranteed portion of the fake loans to the Federal Agricultural Mortgage Corporation, also known as Farmer Mac. Patel executed the scheme on three occasions, receiving almost $20 million in proceeds. Patel used a portion of the funds from that scheme to pay some of his restitution, but he was saving much of it to flee the United States.

Patel’s sentencing in the Northern District of Illinois was set for January 9, 2018. Three days before that, he was arrested at the airport in Kissimmee. Patel had chartered a flight to Ecuador, where he intended to request political asylum and live off the proceeds that he had obtained from his new scheme. Instead, Patel’s bond was revoked and the U.S. Marshals Service transported him to the Northern District of Illinois. On March 6, 2018, Patel was sentenced to 25 years in federal prison for his case in the Northern District of Illinois. 

Four Individuals Arrested for Investment Fraud Scheme Targeting Hawaii Residents (DOJ Release)
https://www.justice.gov/usao-hi/pr/four-individuals-arrested-investment-fraud-scheme-targeting-hawaii-residents
In the United States District Court for the District of Hawaii, an Indictment was filed charging Haitem Taylor Abid Dhaene, Latifa Zanki Dhaene, Tim Dhaene, and Sofyane Abid Dhaene with wire fraud. As alleged in part in the DOJ Release;

[I]n January 2022, the family of four arrived in Los Angeles, California, on Belgian passports and moved to Hawaii in or about September 2022. The indictment further alleges that, between October 2022 and February 2023, they solicited multiple persons in Hawaii to invest money, based on false promises that the money would be placed in high return investment contracts supposedly guaranteed by a mainland wealth management firm and its partner. HAITEM DHAENE represented he was a partner in the mainland firm, when, according to the indictment, he was not a partner, and the wealth management firm did not know about his claimed association or the purported investment contracts.

Among other things, the indictment alleges the defendants falsely claimed to have formed a private equity investment group; that they provided an investment contract promising a return of 315% per annum; and that the contract bore the name and forged signature of a mainland wealth advisor. As a result of these promises, various individuals gave the four defendants approximately $309,000, including $294,000 withdrawn from an individual’s 401k retirement account.

Meeting the Challenges and Fulfilling The Promise of Global Financial Markets: Remarks before the Institute of International Bankers by SEC Commissioner Mark T. Uyeda
https://www.sec.gov/news/speech/uyeda-remarks-institute-international-bankers-030723

Thank you, Beth [Zorc], for that introduction and thank you to the Institute of International Bankers for this opportunity to provide closing remarks to your 2023 Annual Washington Conference. For the last two days, you have been addressed by top U.S. financial regulators, including the chairman of the Federal Deposit Insurance Corporation, the acting Comptroller of the Currency, and the chairman of the Commodity Futures Trading Commission, on issues ranging from banking regulation, the economy, and financial crimes to cybersecurity, digital assets, and taxes. It is a privilege to close out your conference with thoughts on the capital markets. My remarks reflect solely my individual views as a Commissioner and do not necessarily reflect the views of the full U.S. Securities and Exchange Commission (SEC) or my fellow Commissioners.

The SEC’s current regulatory agenda is ambitious, with such an extensive list of proposals not seen since the 2008 financial crisis and the enactment of the Dodd-Frank Act.[1] Many of these changes will impact portions of your operations that conduct business in the United States or provide services to U.S. citizens. The agenda’s sheer scale raises good questions on what securities regulators should focus on, and why.

I would like to share with you today my regulatory approach to the securities markets, which itself is drawn, of course, from the work of many others.[2] There is a lot at stake here. Efficient capital formation can bring massive benefits to a nation. The promise of more efficiently allocated cross-border flows of capital resources into investment projects can result in superior risk/return tradeoffs and better portfolio diversification. It can also result in higher economic growth and increased prosperity.

In regulating the capital markets, one goal ought to be creating a set of rules and norms that offer investors a reasonable degree of well-founded confidence, not false confidence, that both the material risks and potential returns associated with their investments are disclosed. This goal is at the core of both investor protection and capital formation.

The notion that investor protection and capital formation are symbiotically related dates back to a famous economic paper published in 1970 by George Akerlof, entitled The Market for “Lemons”: Quality Uncertainty and the Market Mechanism.[3] Professor Akerlof won the 2001 Nobel Prize for this seminal work, which highlights the manner in which asymmetries of information can undermine the powers of the market. In his article, he asks a simple question: why do new cars lose so much value the instant you drive them off of the lot? The explanation, he offered, was the asymmetry of information between the potential buyer and seller. If the new car turns out to have a lot of mechanical defects, we colloquially refer to it as a “lemon” in the United States. If someone has purchased a new car, and soon thereafter makes an attempt to sell it, a potential buyer is likely concerned that the car is a “lemon,” and, in light of this expectation, the buyer is likely to reduce how much he or she is willing to pay. Typically, a new car loses a substantial amount of its original market value. From an economic perspective, this is puzzling: it is the same car as it was a few moments before, with the same likelihood of delivering value across time, and yet we have this precipitous drop. As Professor Akerlof noted, this is due to the asymmetry of information—that is, the seller likely knows the quality of the item offered and the buyer does not.

In some instances, the Lemons Problem can result in the destruction of a market. If potential sellers with quality cars decide to refrain from the market—because they do not want to sell their car for less than its perceived worth—then the probability of purchasing a lemon among the remaining cars increases. This, in turn, leads to a higher discount demanded by buyers, which may result in a further removal of quality cars from the market, until this negative feedback loop effectively causes market failure.

The same Lemons Problem can apply to the securities markets. There may be honest firms with new entrepreneurial ideas trying to raise capital, but there are also bad actors who want to take the investors’ money and run. The firms raising capital know whether they are fraudsters, but potential investors do not. If the potential investors cannot discriminate between which firms are honest and which ones are frauds, then they will demand a higher return to compensate them for the risk they may be giving their money to a fraudster. From the entrepreneurs’ perspective, this increases the cost of capital.

As a rational person will not invest in a project unless the cost of capital is lower than the expected rate of return, an increase in cost of capital reduces investment in the economy, which lowers economic growth. If there are too many fraudsters in the securities markets, then the market may no longer be a viable means of raising capital. As the cost of capital increases through the presence of fraudsters, some honest entrepreneurs will withdraw from the market altogether, which will increase the likelihood of encountering a bad actor. As Professor Bernard Black explains: “Discounted share prices mean that an honest issuer can’t receive fair value for its shares, and has an incentive to use other forms of financing. But discounted prices won’t discourage dishonest issuers.”[4]

The key to addressing the Lemons Problem is to remove a sufficient quantum of fraudsters from the market. This will lower the cost of capital, resulting in more investment, greater economic growth, and more prosperity.[5]

Specifically, there are four essential investor fears that securities regulators must address if they are to overcome the Lemons Problem: first is the investor fear of being uninformed about the investment being offered; second is potential abuse by market intermediaries, as investors enter, participate in and exit from securities markets; third is the fear of inefficient market prices, including due to market manipulation and insider trading; and fourth is the fear of intermediary failures that may leave investors unable to access their wealth.

First, how does a jurisdiction ensure that investors can place some degree of confidence in the information from corporate issuers raising capital? There are five basic regulatory tools: (1) mandatory financial reporting, so investors know what to expect; (2) standardized accounting, so financial results can be compared; (3) auditing, so investors can have some assurance; (4) oversight of auditing, to ensure auditors are doing their jobs; and (5) effective enforcement, so the investors know that the bad actors are being filtered out and removed.

Second, regarding abuse by securities markets intermediaries, the list of harms is long, ranging from misleading statements to churning to front running to unauthorized trading and theft. Regulatory tools include: (1) registration requirements; (2) recordkeeping rules; (3) supervisory rules, so an entity can be held accountable for abuses by its agents; (4) disclosure rules; (5) rules prescribing specific types of conduct, such as sales practice, best execution, principal trading, and other obligations; and, finally, (6) regulatory examinations and enforcement.

The third fear is market abuses, including insider trading and market manipulation. Trading by insiders, or their “tipees,” on material non-public information is a “zero-sum game”; for every dollar an insider gains, or avoids losing, that is a dollar that an investor loses. If insiders are allowed to profit by trading on material non-public information, investors will avoid that market and drive up the cost of capital.[6]

The same is true of market manipulation, which is conduct designed to deceive investors by controlling or artificially affecting the price of securities. There are many ways to engage in market manipulation, ranging from the promulgation of misleading statements to purposefully moving prices through the volume of trading, including via matched or so-called wash sales. The classic manipulation is the pump-and-dump. The regulatory toolset to prevent these activities is well known: antifraud rules, market surveillance, and effective enforcement.

The fourth fear is failures by intermediaries. Investors want access to their wealth. If a failure by a broker-dealer or exchange, for example, results in a multi-year bankruptcy process or other legal entanglements, they are not going to want to hold their wealth through that intermediary. If there are serious cyber-threats that might debilitate the market—again, investors will turn away. The regulatory tools in this space include transparency and disclosure, inspections and enforcement, business continuity planning, appropriate cyber safeguards, capital rules, margin requirements, rules governing custody of client assets, clearing-house rules, and circuit breakers.

The final essential ingredient of a healthy capital market is that the regulatory framework itself must be cost effective. If the regulatory burdens designed to address the Four Fears are excessively burdensome, and not justified by the benefits associated with those regulations, then the capital market will fail to live up to its potential in terms of economic growth and prosperity.

How do we assure cost effectiveness? Cost benefit analysis—both on a prospective and retrospective basis—is crucial. While such an analysis is hard to do—and there are many benefits, costs, and unintended consequences that are difficult to gauge accurately—laying out and presenting the costs and benefits, as best we can, results in a more efficient regulatory framework. Another important tool is the public comment process on rulemaking, so regulators can learn from interested persons. Of course, the public comment process only works as intended when industry participants and stakeholders have sufficient time to analyze a proposal. At the same time, regulators must be cognizant of effects on competition as a regulatory framework can unnecessarily increase market power, which may increase transactional costs and damage a market’s potential.

Globally, one needs to ask whether it is possible to effectively address the Lemons Problem across borders. Investors might be interested in diversifying their portfolio of investments beyond their home country, and gaining not only new investment opportunities, but also ones that are less correlated. However, they will not do so unless there is some degree of confidence that their investments will not be siphoned away by fraudsters. Thus, if we are to work across borders, we need agreements and often assistance from foreign regulatory authorities and they need that same assistance from us.

In the international context, there is the added complexity of different rule sets in different jurisdictions. Beyond the market failures induced by the Lemons Problem, this can introduce other elements that interfere with efficient capital formation. There are a number of areas that may benefit from attention and effort among securities regulators.

First, there should be cross-border clarity on regulatory scope as entities that might operate internationally need to know which rules apply to them and which do not. It is vitally important that regulators ensure that the legal perimeter and regulatory scoping are as clear and assessable as possible. Legal ambiguity can be the death of healthy cross-border activity.

Second, conflicts of law across jurisdictions need to be addressed. If the regulation in one jurisdiction says you must do X, and the regulation in a second jurisdiction says you may not do X, then you cannot lawfully operate across those jurisdictions. Some conflicts of law may even be relatively peripheral from a securities regulatory perspective, arising out of trade, competition, or privacy laws that are enforced by non-financial regulators.

Third, duplicative regulation increases the costs of cross-border securities activity without corresponding benefits if they address regulatory issues in an unnecessarily redundant manner. In order to permit a healthy flow of cross-border activities in financial markets, countries do not need to have exactly the same rule book. If one jurisdiction has a different regulatory approach to an issue, then, so long as the regulatory outcome is qualitatively comparable and transparent, a jurisdiction might choose to recognize the compliance of a foreign-based entity with another jurisdiction’s regulations as satisfactory, and thus ease restrictions on cross-border flows of activity associated therewith. This kind of regulatory collaboration goes by a number of different names—ranging from mutual recognition to substituted compliance.[7]

Fourth is identifying gaps in a foreign regulatory framework that the home jurisdiction believes are of key importance. While a jurisdiction might choose to recognize some aspects of a foreign regulatory framework, it does not have to embrace the whole of that framework to facilitate cross-border activity. In other words, an all-or-nothing approach may not make sense in facilitating cross-border activity. Rather, there will be more success in lowering the cost of beneficial cross-border activity, while maintaining appropriate investor protection, if we embrace a more open-ended, evidence-based approach that examines the actual regulatory differences and similarities, as well as the pertinent compliance mechanisms.

One more thought: healthy competition among jurisdictions when crafting regulations is not necessarily a bad thing. Some argue that globalized capital markets run a risk of a regulatory “race to the bottom.” In other words, capital and market activity will flow to the jurisdictions with the lowest regulatory requirements, and, thus, flow to where there may be a higher degree of fraud to the detriment of investors. This line of argument forgets the Lemons Problem. If regulation is inadequate in a jurisdiction, the Lemons Problem suggests that the cost of capital will be higher than it would otherwise be. And who wants to raise capital in a jurisdiction where they have to pay a higher cost of capital? Indeed, the Lemons Problem suggests that healthy jurisdictional competition may result in a “race to optimality”—that is, there is likely to be more capital market activity in jurisdictions where there is cost-effective and high-quality regulation, including examination and enforcement.

The economic benefits to be gained from increased regulatory cooperation across borders that facilitates a more globalized capital market cannot be overstated. This goal becomes even more important among similarly-minded societies during times when the ideas of free enterprise, democracy, and personal liberty are under threat. However, this requires some degree of trust and resource-intensive collaboration among regulators across borders. The international entities represented in this organization are vital to informing such a process, and I look forward to continuing to learn from you.

Thank you.

[1] See SEC Agency Rule List, available at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST
¤tPub=true&agencyCode&showStage=active&agencyCd=3235

[2] For an excellent overview of the basic regulatory ingredients to building and maintaining a successful securities market, which I draw on, see, e.g., Ziven Scott Birdwell, The Key Elements for Developing A Securities Market To Drive Economic Growth: A Roadmap for Emerging Markets, Georgia Journal of International and Comparative Law (Spring 2011).

[3] Akerlof, George A., The Market for “Lemons”: Quality Uncertainty and the Market Mechanism, Quarterly Journal of Economics, Vol. 84, No. 3 (Aug. 1970).

[4] Bernard Black, The Core Institutions That Support Strong Securities Markets, 55 Bus. Law, 1567 (2000).

[5] John C. Coffee, Jr., Law and the Market: The Impact of Enforcement, 156 U. Pa. L. Rev. 229, 230 (2007) (“[H]igher enforcement intensity gives the U.S. economy a lower cost of capital and higher securities valuations”).

[6] See, e.g., Utpal Bhattacharya, Hazem Daouk, The World Price of Insider Trading, 57 J. Fin. 75 (2008) (after controlling for risk factors, a liquidity factor and shareholder rights, finds cost of equity is reduced by 5% through enforcement of insider trading laws).

[7] For a discussion of the evolution of this concept, see Howell E. Jackson, Substituted Compliance: The Emergence, Challenges, and Evolution of a New Regulatory Paradigm, Journal of Financial Regulation Vol. 1, Issue 2, pages 169-205 (2015). For an example of the application of the concept, see Rule 3a71-6 under the Securities Exchange Act of 1934 (“Exchange Act”) which permits the SEC to determine that registered non-U.S. major security-based swap participants may satisfy certain requirements promulgated under Exchange Act section 15F by complying with comparable non-U.S. requirements.

SEC Charges Rio Tinto plc with Bribery Controls Failures (SEC Release)
https://www.sec.gov/news/press-release/2023-46#
Without admitting or denying the findings in an SEC Order that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934, Rio Tinto plc agreed to pay a $15 million civil penalty
https://www.sec.gov/litigation/admin/2023/34-97049.pdf
As alleged in part in the SEC Release:

[I]n July 2011, Rio Tinto hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain its mining rights in the Simandou mountain region in Guinea. The consultant began working on behalf of Rio Tinto without a written agreement defining the scope of his services or deliverables. Eventually the mining rights were retained, and the consultant was paid $10.5 million for his services, which Rio Tinto never verified. The SEC’s investigation uncovered that the consultant, acting as Rio Tinto’s agent, offered and attempted to make an improper payment of at least $822,000 to a Guinean government official in connection with the consultant’s efforts to help Rio Tinto retain its mining rights. Furthermore, none of the payments to the consultant was accurately reflected in Rio Tinto’s books and records, and the company failed to have sufficient internal accounting controls in place to detect or prevent the misconduct. The mine has not been developed by Rio Tinto.

SEC Charges Pokerstars Parent Company with FCPA Violations (SEC Release)
https://www.sec.gov/enforce/34-97044-s
Without admitting or denying the findings in an SEC Order that it had violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, Flutter Entertainment, plc (as a successor-in-interest to The Stars Group, Inc. (the "Company") https://www.sec.gov/litigation/admin/2023/34-97044.pdf agreed to cease and desist from future violations; and to pay a penalty of $4 million. The SEC Order noted Flutter's cooperation and remedial efforts, as well as Flutter's subsequent withdrawal from the Russian market following Russia's invasion of Ukraine in early 2022. As alleged in part in the SEC Release:

[A]t all relevant times, the Company operated a number of gaming brands, including the PokerStars online poker website. The order finds that between May 26, 2015 and May 15, 2020, while the Company's shares were registered with the SEC, the Company paid approximately $8.9 million to consultants in Russia in support of the Company's operations and its efforts to have poker legalized in that country. The SEC's order further finds that, during this time period, the Company failed to both devise and maintain a sufficient system of internal accounting controls over its operations in Russia with respect to third-party consultants, and to consistently make and keep accurate books and records regarding its consultant payments in Russia. According to the order, contemporaneous emails indicate that those payments covered, among other things, (i) reimbursement for New Year's gifts to individuals including Russian government officials, which relevant Company policies prohibited, and (ii) reimbursement of a consultant's payments to Roskomnadzor, the Russian state agency responsible for administering internet censorship filters.

SEC Files Emergency Action Against Miami Investment Adviser BKCoin and Principal Kevin Kang for Orchestrating $100 Million Crypto Fraud Scheme (SEC Release)
https://www.sec.gov/news/press-release/2023-45
In a Complaint filed in the United States District Court for the Southern District of Florida, the SEC charged BKCoin Management, LLC ("BKCoin'') and Min Woo Kang a/k/a "Kevin" Kang with violating the antifraud provision of the federal securities laws. https://www.sec.gov/litigation/complaints/2023/comp-pr2023-45.pdf Also, the Complaint named as Relief Defendants: BKCoin Capital,LP; BK Offshore Fund, Ltd., BKCoin Multi-Strategy Master Fund, Ltd; BKCoin Multi-Strategy Fund, LP, BKCoin Multi-Strategy Fund Ltd; and Bison Digital, LLC. The SEC Release alleges in part that: