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An experienced whistleblower attorney, successful trial attorney, former criminal prosecutor, and former reporter Representing whistleblowers reporting fraud on the Federal State Governments

MV Marguerita
A Czech seaman working aboard a German cargo ship observed an engineer to leak oil into the ocean using extra pipes configured on the boat. When the vessel came into Portlend Maine, he reported this to the authorities which investigated and eventually the U.S. find the German owners $3.5 million for the infraction of international law. Now, a Judge has ordered that the seaman whistleblower be rewarded for his courage and he will receive a percentage of the $3.5 million. Last year, the U.S. government fined ship owners over $50 million for pumping pollution into the oceans. These investigations are on the rise because ocean vessels committing these violations are spiking heavily. Here is more on what happened regarding the MV Marguerita:

Alleged Fraud of Oil Record Books

The German cargo ship MV Marguerita was detained under the impression that it had entered the U.S. waters and the port in Portland at least eight times with falsified oil record books. This was only determined after a thorough investigation by the Coast Guard. They were able to determine that one of the engineers was using extra pipes and hardware to dispose of the oil. The act that alerted the authorities to this crime was the whistleblowing from Czech seaman Jaroslav Hornof who bravely spoke out against this crime and was commended for his courage. In an affidavit, Hornof said he learned that one of the chief engineers on the Marguerita was using extra pipes to discharge oily water into the ocean. When the engineer denied doing so, Hornof made secret videos of the dumping and turned them over to the United States authorities. He gave the authorities his information and they eventually boarded the ship. Under investigation, the Coast Guard was able to determine that they falsified the oil record books and dumped oil directly into the ocean, which is in direct violation of an international treaty.

Some feel Google has “lost its moral compass” to enrich shareholders.  This April, thousands of Google employees protested the company’s military contract with the Pentagon —project Maven — which developed technology to analyze drone video footage that could potentially identify human targets.

The woman who accused Supreme Court nominee Brett Kavanaugh of forcing himself on her when they were in high school has come forward, detailing that the Washington Post Kavanaugh pinned her down, groped her over her clothes, and tried to take off her bathing suit and outer clothing in an assault. Christine Blasey Ford, a professor at Palo Alto University in California, spoke to the Washington Post.

In the Post article published Sunday, Ford said she was the author of aletter to Sen. Dianne Feinstein (D-CA) that was eventually sent to the FBI about the alleged incident. According to The Washington Pose, Ford said that one summer in the early 1980s, Kavanaugh and a friend — both “stumbling drunk,”   corralled her into a bedroom during a gathering of teenagers at a house in Montgomery County.“I thought he might inadvertently kill me,” said Ford, now a 51-year-old research psychologist in northern California. “He was trying to attack me and remove my clothing.” Ford said she was able to escape when Kavanaugh’s friend and classmate at Georgetown Preparatory School, Mark Judge, jumped on top of them, sending all three tumbling. She said she ran from the room, briefly locked herself in a bathroom and then fled the house.

Ford said she told no one of the incident in any detail until 2012, when she was in couples therapy . The therapist’s notes, portions of which were provided by Ford and reviewed by The Washington Post, do not mention Kavanaugh’s name but say she reported that she was attacked by students “from an elitist boys’ school” who went on to become “highly respected and high-ranking members of society in Washington.” The notes say four boys were involved, a discrepancy Ford says was an error on the therapist’s part. Ford said there were four boys at the party but only two in the room.  Her husband, Russell Ford, said in an interview that in the 2012 sessions, she recounted being trapped in a room with two drunken boys, one of whom pinned her to a bed, molested her and prevented her from screaming. He said he recalled that his wife used Kavanaugh’s last name and voiced concern that Kavanaugh — then a federal judge — might one day be nominated to the Supreme Court.

The White House is prepared to announce on Monday or Tuesday that the U.S. will levy new tariffs on $200 billion of Chinese goods, according to the Wall Street Journal. The upcoming tariffs is expected to be set on internet technology products and other electronics, printed circuit boards, and consumer goods including Chinese seafood, furniture, and lighting products, tires, chemicals, plastics, bicycles, and car seats for babies. It was unclear if the administration will exempt any of the products that were on the list, which was announced in July. Prior tariffs set  by the two countries have totaled more than $50 billion in reciprocal measures, as China has retaliated against U.S.

Hundreds of billions more in tariffs have been proposed by Trump, but those measures have been delayed while officials determine a final list of products.

Last week, Trump threatened the third round of tariffs on another $267 billion of Chinese imports, covering more than total Chinese exports to the U.S. China has threatened retaliation, which could include action against U.S. companies operating there.

 

The enforcement Chief of the Commodities Futures Trading Commission which oversees the $50 trillion futures market, Aitan Gielman, says flatly that there is a massive amount of fraud in the marketplace including front-running, insider trading and Ponzi schemes that the oversight agency is not pursuing  because Congress has starved the agency of resources. As a result, investors and taxpayers are being cheated because the markets are being manipulated. All the while the wrongdoers are making hundreds of millions off the back of the average person. Front-running, also known as forward trading happens when a trader takes advantage of market movements and trades on his or his company’s assets based on advanced knowledge of a pending order. For example, this is the case when a trader learns of a large client order and uses his own or his company’s account before the client’s order is executed. Front running is happening in stocks, index funds, foreign exchange markets, securities, commodities and front runners are now using high speed computer programs to trade ahead of the clients.  Where the front runner uses information not available to the public, the practice is clearly illegal. Little is being done to stop it.

The infrequent cases result in large payments but no significant incarceration. In January 2018, SBC Holdings paid $101 million to settle criminal charges that the bank engaged in “front-running” on foreign exchange to defraud two clients in 2010-2011, according to court documents.The bank will pay a $63 million criminal penalty and $38 million in disgorgement and restitution to settle the charges under a deferred prosecution agreement in which HSBC accepts responsibility for its employees’ actions, the documents said. Under the agreement, HSBC will forgo any criminal charges in the case as long as the bank adheres to the terms of the settlement.HSBC had been charged in U.S. District Court in New York with two counts of wire fraud in connection with the alleged scheme. HSBC FX traders misused confidential information from clients to execute British pound FX transactions on two occasions in 2010 and 2011, with the bank taking in a combined $46 million in profits on the two transactions to the traders’ and HSBC’s benefit, according to court documents.

The settlement payment is the latest by HSBC over foreign-exchange trading issues. In October, the bank was fined $175 million by the Federal Reserve Board for failing to detect its FX traders’ misuse of client information. In November 2014, HSBC paid $275 million to the Commodity Futures Trading Commission and $341 million to the U.K. Financial Conduct Authority to settle charges that it manipulated FX benchmark rates.

United Technologies Corporation of Connecticut will pay the Securities and Exchange Commission $13.9 million to end charges that it violated federal law by bribing Azerbaijani officials to get public housing elevator businesses in Baku. The company also bribed a Chinese sales agent in an attempt to obtain confidential information from a Chinese official to help win engine sales to state-owned Air China, through a joint venture. The SEC also said that United Technologies improperly provided trips and gifts to various foreign officials in China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia through its Pratt & Whitney division and Otis subsidiary. Azerbaijan is located just north of Iran on the Caspian Sea.

In Azerbaijan, the Otis Elevator unit hired agents from Russia without doing any due diligence.”None of [the agents] had local experience in Azerbaijan or reliable experience in either import/export or the elevator industry,” the SEC order said.

In China, an agent for a joint venture that included Pratt & Whitney asked for and received “a commission advance of $2 million purportedly for an office expansion,” the SEC said. The agent didn’t provide any documentation to support its need for the advance. The joint venture paid the China agent $55 million in commissions from 2009 to 2013.

The Securities and Exchange Commission today announced its first-ever enforcement action finding an investment company registration violation by a hedge fund manager based on its investments in digital assets.

The SEC entered an order finding that Crypto Asset Management LP (CAM) offered a fund that operated as an unregistered investment company while falsely marketing it as the “first regulated crypto asset fund in the United States.”  According to the SEC’s order, CAM, a California-based hedge fund manager, and its sole principal Timothy Enneking raised more than $3.6 million over a four-month period in late 2017 while falsely claiming that the fund was regulated by the SEC and had filed a registration statement with the agency.  By engaging in an unregistered non-exempt public offering and investing more than 40 percent of the fund’s assets in digital asset securities, CAM caused the fund to operate as an unregistered investment company.  After being contacted by the SEC staff, CAM ceased its public offering and offered buy backs to affected investors.

The Securities and Exchange Commission charged former registered representative and branch manager with Raymond James & Associates, Joe Burstein for helping facilitate an EB-5 offering fraud perpetrated by Jay Peak, Vermont-based ski resort. The SEC’s said in its court filing that Joel Burstein, worked at Raymond James from 2001 to 2016, aided and abetted the ski resort’s owner, Ariel Quiros, in misappropriation and misuse of investor money that flowed through various brokerage accounts held at Raymond James. Burstein,  Quiros’ former son-in-law, managed those accounts. According to the SEC’s complaint, Burstein facilitated Quiros’ misappropriation of more than $21 million of investor funds to acquire the Jay Peak ski resort. Burstein then assisted Quiros in trying to mask the significant shortfall created in the Raymond James brokerage accounts from the misappropriation. The complaint also alleges that Burstein facilitated Quiros’ fraudulent use of more than $18 million of investor money to pay off Jay Peak’s margin debt at Raymond James.

The SEC filed an emergency civil action against Quiros in 2016 Jay Peak and others for engaging in an offering fraud in which, among other things, Quiros systematically misappropriated and misused investor funds. The program solicits investments from foreigners in exchange for U.S. residency.By investing at least $1,000,000 to finance a business in the United States that will employ at least 10 American workers.” Most immigrant investors who use the EB-5 program invest in a targeted area— a rural area or area with high unemployment — which lowers the investment threshold to $500,000. The EB-5 program is intended to encourage both “foreign investments and economic growth”.[5] The EB-5 Immigrant Investor Visa Program is one of five employment-based (EB) preference programs in the United States.

Without admitting or denying the SEC’s allegations, Burstein consented to the entry of a final judgment ordering him to pay a civil penalty of $80,000.

The Securities and Exchange Commission is awarding $39 million to one whistleblower and $15 million to another whose critical information and continued assistance helped the agency bring an important enforcement action.  The $39 million award is the second-largest award in the history of the SEC’s whistleblower program.

“Whistleblowers serve as invaluable sources of information, and can propel an investigation forward by helping us overcome obstacles and delays in investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “These substantial awards send a strong message about the SEC’s commitment to whistleblowers and the value they bring to the agency’s mission.”

The SEC has awarded more than $320 million to 57 individuals since issuing its first award in 2012.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action.  Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

Massachusetts Financial Services Company, the investment advisory company was charged by the SEC with violations of the Advisers Act by making false statements in promoting “blended” research strategies that offered ideal portfolios containing stocks that were rated a “buy” by both MFS’s fundamental analysts and quantitative models. The ads claimed to show that the blended strategies led to a performance that was superior to using either fundamental or quantitative strategies by themselves. The SEC says that some of the ads were misleading because they failed to disclose that some of the quantitative ratings used to create the hypothetical portfolios used a retroactive, back-tested application of the MFS quantitative model.”Back-tested performance carries the risk that the performance depicted is not due to successful predictive modeling,” the SEC said in its complaint.

MFS advertised the hypothetical returns of its blended strategies to institutional investors, consultants and financial intermediaries including broker-dealers, insurance companies and investment advisors, the SEC said.”MFS also falsely claimed that the hypothetical portfolio was based on MFS’s own quantitative stock ratings dating back to the mid-1990s, even though before 2000 MFS did not have a quantitative research department or generate its own quantitative stock ratings,” the SEC complaint said.

The ads were ended by the company’s compliance department in 2015, the agency said.