- Gregg Smith, 55, of Scarsdale, New York. Smith was an executive director and trader on Bank A’s precious metals desk in New York. He joined Bank A in May 2008 after it acquired another U.S. bank (Bank B).
- Michael Nowak, 45, of Montclair, New Jersey. Nowak was a managing director and ran Bank A’s global precious metals desk. He joined Bank A in July 1996.
Between July 2014 and December 2018, Commonwealth received over $100 million in revenue sharing from the broker related to client investments in certain share classes of “no transaction fee” and “transaction fee” mutual funds, the complaint states. The arrangement between Commonwealth and NFS was also interesting as it was structured. According to the SEC Complaint, Commonwealth purchased or sold no transaction fee mutual funds share and clients did not pay a transaction fee. HOWEVER, clients did pay fees to the mutual fund for their share of fund expenses for as long as they held the fund and in turn the mutual fund paid a portion of these fees to NFS. NFS then shared a portion of those fees it received with Commonwealth.
The SEC’s complaint explains that Commonwealth’s receipt of the revenue sharing from NFS created significant conflicts of interest between Commonwealth and its clients. These conflicts included financial incentives for Commonwealth to invest clients in mutual funds which would lead to greater revenue for Commonwealth. The Complaint says that Commonwealth breached its fiduciary duty to its clients by failing to disclose the conflicts of interest created by its receipt of compensation through the revenue sharing agreement. Specifically, the SEC’s complaint alleges that Commonwealth “failed to tell its clients that (i) there were mutual fund share class investments that were less expensive to clients than some of the mutual fund share class investments that resulted in revenue sharing payments to Commonwealth, (ii) there were mutual fund investments that did not result in any revenue sharing payments to Commonwealth, and (iii) there were revenue sharing payments to Commonwealth under the broker’s ‘transaction fee’ program.”
Cloudflare Inc., cloud-based networking and cybersecurity services, expected to go public next week, may have violated U.S. economic and trade sanctions regulations as its products may have been used by entities designated by the U.S. as terrorists and narcotics traffickers.
Cloudflare said that it determined that its products were used by, or for the benefit of, certain individuals and entities that have been blacklisted by the U.S. A number of the parties made payments to the company in connection with their use of the platform. Those parties included entities that have been designated by the U.S. as terrorists and narcotics traffickers or are affiliated with governments currently subject to comprehensive U.S. sanctions, according to the filing.
Richard Rogers, a Northborough, Massachusetts chiropractor, operated his practice from his residence. According to court documents, Rogers evaded his taxes from 2012 through 2016 by concealing his income from the Internal Revenue Service (IRS). Rogers encouraged his clients to pay in cash and used a nominee bank account to negotiate check payments when he was not paid in cash. He paid creditors using postal money orders, and used credit card accounts opened with a fictitious social security number. Rogers also concealed the ownership of his residence by titling the property in the name of a trust. Rogers did not file federal tax returns from at least 2008 through 2016, despite his obligation to do so.
United States District Judge Timothy S. Hillman also ordered Rogers to pay $155,164 in restitution to the IRS.
The complaint claimed that the massive breaches were due to Yahoo’s disregard of users’ privacy interests and threats. The Yahoo data breach class action lawsuit contended that the plaintiffs and Yahoo users would not have signed up for the service had they known their private information would be compromised.
The Securities and Exchange Commission is expanding the pool of public companies being examined about their compliance with U.S. sanctions against IRan and many other nations on our blacklist of individuals and entities grows. It is increasing its comment letters to companies and requesting more information related to dealings in countries targeted by U.S. sanctions. According to the Wall Street Journal over 42 companies received letters from the SEC regarding activity in areas subject to sanctions enforced by the Treasury Department’s Office of Foreign Assets Control.
The United States has imposed new sanctions on Irans complex and extensive shipping that it uses to sell oil, and the U.S. will pay $15 million to anyone with information that disrupts the scheme. The reward could be rendered to individuals living within or outside the United States.
The Treasury Department placed sanctions on 26 individuals and “entities” affiliated with the Islamic Revolutionary Guards Corps Quds Force. The sanctions freeze any assets within the United States concerning those individuals or corporations affiliated with the shipping network. It also prevents them from doing business with Americans. It also identified 11 ships, placing anyone who owns or operates them on a Treasury list and exposing any port that lets them in, or firms that fuel or offload them, to future sanctions.
Rostam Ghasemi, Iran’s former minister of petroleum oversees and operates the network.
International SOS, is a provider of overseas healthcare services for the government and it had negotiated discounts from third-party air ambulance providers, which it was required to pass along to TRICARE. Instead, International SOS did not disclose the actual cost of the aeromedical evacuation services during the quoting process; billed TRICARE at the higher non-discounted amount; and received payment from TRICARE for the inflated costs, which International SOS contends it retained as a fee.
This settlement resolves allegations in a lawsuit by a former International SOS Regional Flight Desk Manager, under the qui tam (or whistleblower) provisions of the False Claims Act. The qui tam provisions permit private parties to sue for false claims on behalf of the government and to receive a share of any recovery. The relator here will receive $165,000 as his share of the recovery in the case. The relator was represented by Franklin J. Rooks, Jr., Esq. of Morgan Rooks, P.C., and Jared A. Jacobson, Esq. of Jared Jacobson Law, LLC.
As the U.S.’s sole registered clearing agency for exchange-listed option contracts on equities, OCC was designated in 2012 as a systemically important financial market utility, or SIFMU. That designation makes OCC subject to enhanced regulation and transparency regarding its risk management systems because disruption to OCC’s operations might be costly not only for itself and its members, but other market participants or the broader financial system. Today’s enforcement action is the SEC’s first charging violations of SEC clearing agency standards adopted in 2012 and in 2016, and the CFTC’s first charging violations of Core Principles applicable to Derivatives Clearing Organizations.
“As a clearing agency, OCC performs a range of services that are critical to the effective operation of the securities markets,” said SEC Chairman Jay Clayton. “Today’s resolution is intended to ensure that OCC will have appropriate policies and procedures in place to meet its obligations to our financial system.”
New York’s Department of Consumer Protection has sued T-Mobile allegedly sold used phones as new devices, charging illegal taxes and charging fees for unwanted services.
The lawsuit says there were more than 2,000 violations of the city’s consumer protection law which were revealed in consumer complaints and a year-long investigation by the city’s Department of Consumer and Worker Protection. It found deceptive practices in stores across the five boroughs.