Tag:fraud
Toronto Dominion Bank – Hey Criminals, Bank Here!
Toronto Dominion Bank, known as TD Bank, is one of the largest banks in the United States. In early October of this year, TD Bank agreed to pay almost $2 billion in penalties for its involvement in money laundering practices and “violations of the Bank Secrecy Act (BSA).” Over the span of a decade, TD Bank failed to stop hundreds of millions of dollars worth of drug money from flowing through its system and became a common bank for criminal enterprises to use. Attorney General Merrick B. Garland discussed how TD Bank made “its services convenient for criminals” when they decided to maximize their profit margins over complying with the law.
The Downfall of Cryptocurrency, and Celebrities
Cryptocurrency entered the mainstream economy in 2013 when Forbes listed Bitcoin as the best investment of that year, calling 2013 the “year of the bitcoin.” Then, in 2014, Bloomberg News made the statement that Bitcoin was one of the year’s worst investments. Since these early days, citizens and economists alike have remained skeptical of Bitcoin and other cryptocurrencies. Over the past few years, celebrities have gotten increasingly involved in “pushing cryptocurrency and non-fungible tokens at a speed once reserved for viral dances,” according to the Washington Post. In the wake of recent events, the Securities and Exchange Commission is beginning to crack down on celebrity endorsement that has gone too far.
Jarksey v. SEC and the Future of Administrative Adjudications
On May 18, 2022, the United States Court of Appeals for the Fifth Circuit issued a novel and divisive decision that greatly restricts the administrative enforcement powers of the SEC and its use of Administrative Law Judges (ALJs) in Jarksey v. SEC. Although much deliberation has been had over the implications and immediate impact of this ruling, the takeaway is that the Securities and Exchange Commission (SEC) may be facing significant challenges to its internal enforcement procedures in the near future.
The AMLA – Blowing the Whistle on Fraud
Whistleblowing – a powerful weapon in the arsenal of defense against fraud – is a highly effective tool utilized by the government to enforce regulatory compliance. Nevertheless, many employees remain hesitant to initiate criminal proceedings. In 2021, in an effort to dispel such concerns and to empower potential whistleblowers to take action, Congress enacted the Anti-Money Laundering Act (AMLA).
The Financial Services Industry and Its Regulatory Landscape: 2021
Every year, hundreds of financial advisors and brokers across the country are convicted of a host of bad acts, which include conducting Ponzi schemes, misappropriating client funds and forging customer signatures. 2021 was no exception. Here are ten recent examples of how the legal system as well as regulators in the financial services industry, respond to allegations of fraud, misappropriation, improper hiring practices, and criminal activity.
The Story That Sounded Too Good to Be True Was, Indeed, Too Good to Be True.
The process of the criminal trial of the youngest woman self-made billionaire, has recently started up again after being stalled due to Covid restrictions in the past year. Former CEO and founder of Theranos, Elizabeth Holmes, and her former president and one-time boyfriend, Ramesh Balwani, have been accused of misleading investors and raising hundreds of millions of dollars by making false or exaggerated claims in defiance of the anti-fraud provisions of federal securities laws. While she is currently facing a federal indictment on twelve different charges, including two counts of conspiracy to commit wire fraud and ten counts of wire fraud, Holmes has already settled her civil charges, which were brought forth by the Securities Exchange Commission (SEC). The civil charges brought forth by the SEC have now put Silicon Valley on alert by ensuring that technology companies who claim that they have a new groundbreaking technology that can change the world must be based on factual evidence, not purely myths.
SEC Brings First Charges Involving Regulation Crowdfunding
On September 20, the United States Securities and Exchange Commission charged three individuals with conducting fraudulent crowdfunding schemes while also bringing charges against the crowdfunding portal where the offerings were conducted in SEC v. Shumake. As the first case being pursued under Regulation Crowdfunding, a number of questions wait on the horizon regarding the responsibility of crowdfunding platforms to protect investors when orchestrating such offerings.
SEC Whistleblower Program Surpasses $1 Billion in Award Payouts
The U.S. Securities and Exchange Commission (SEC) reached a rather auspicious milestone in September when it announced that, with the addition of two recent awards totaling $114 million, the aggregate amount of monies paid out under the SEC’s whistleblower program since its implementation in 2011 has exceeded $1 billion. In fiscal year 2021 alone, the SEC has awarded a record $500 million. The SEC also reported that award payments have been made to a total of 207 whistleblowers. In a statement, SEC Chairman Gary Gensler said, “[This] announcement underscores the important role that whistleblowers play in helping the SEC detect, investigate and prosecute potential violations of the securities laws.” The two most recent awards included a payment of $110 million to an individual who, according to the SEC, provided the SEC and another regulatory agency with “independent analysis that substantially advanced the SEC’s and the other agency’s investigation” and culminated in successful enforcement actions. Another whistleblower also provided original information to the SEC and received an award of approximately $4 million, although the smaller amount reflects the fact that the information passed on was significantly more limited in scope. As is its standard policy, the SEC declined to specifically name either of the whistleblowers involved or the cases and companies to which they were connected.
One Ballot, One Vote? Fears Amass Surrounding Mail-in Voting in 2020 Election
Mail-in voting has been in the forefront this election season due to persistent COVID-19 concerns. Tensions exist between those who claim that mail-in voting is a safe and valid alternative to in-person voting and those who argue that it will lead to widespread voter fraud and inaccurate election results. Illinois was recently front and center in this national discussion when a Facebook post went viral, asserting that an Illinois couple who received multiple ballot applications could submit them all and vote multiple times without anyone knowing. Far from true, such misconceptions have many questioning how states will monitor mail-in voting to ensure that it remains an effective option in this crucial election.
Financial Regulation During COVID-19
Coronavirus (COVID-19) has shaken the world economy, not the least of which the financial industry. As the financial industry has adapted to work-from-home life under the coronavirus pandemic, industry regulators such as the SEC and the Financial Industry Regulatory Authority (FINRA) have been forced to adapt rules to changing circumstances and shift their enforcement priorities to pandemic related fraud.