Jan 24, 2018 | Shareholder & Investor Protection
Randall Crater, Mark Gillespie, and My Big Coin Pay, Inc. Charged by Commodities Futures Trading Commission (“CFTC”) with Fraud and Misappropriation in Ongoing Virtual Currency Scam
Virtual Currency Investors Allegedly Solicited for More Than $6 million for Investments in “My Big Coin”
The CFTC announced the filing of a federal court enforcement action under seal on January 16, 2018, charging commodity fraud and misappropriation related to the ongoing solicitation of customers for a virtual currency known as “My Big Coin.”
CFTC v. My Big Coin Pay, Inc., et al. and Kimberly Renee Benge, et al (No. 18-10077)
The CFTC Complaint charged Defendants Randall Crater of East Hampton, New York; Mark Gillespie of Hartland, Michigan; and My Big Coin Pay, Inc., a Las Vegas, Nevada-based corporation (“My Big Coin Pay Defendants” or “Defendants”), with misappropriating over $6 million from customers by, among other things, transferring customer funds into personal bank accounts, and using those funds for personal expenses and the purchase of luxury goods.
According to the CFTC’s complaint:
From at least January 2014 through January 2018, the My Big Coin Pay Defendants fraudulently solicited potential and existing My Big Coin customers throughout the United States by making false and misleading claims and omissions about My Big Coin’s value, usage, and trade status, and that My Big Coin was backed by gold. The My Big Coin Defendants also, allegedly, fraudulently solicited numerous customers in the District of Massachusetts, receiving in excess of $5 million from those customers.
Further, the My Big Coin website, maintained and operated by the Defendants, conveyed to customers numerous solicitation materials, My Big Coin trade data, and other materials 1) misrepresenting that My Big Coin was actively being traded on several currency exchanges, including the My Big Coin Exchange website, when, in fact, it was not; 2) misrepresenting in reports the daily trading price, when, in fact, no price existed, because My Big Coin was not trading; 3) misrepresenting that My Big Coin was backed by gold, when, in fact, it was not; and 4) misrepresenting that My Big Coin had partnered with MasterCard, with the promise that My Big Coin could be used anywhere MasterCard was accepted, when, in fact, no such partnership existed, and My Big Coin could not be used anywhere MasterCard was accepted.
The supposed trading results, allegedly, were illusory, and any payouts to customers were derived from funds fraudulently obtained from other customers in the manner of a Ponzi scheme.
As customers began to raise questions about their My Big Coin accounts, Defendants attempted to conceal their fraud by issuing additional coins to customers and falsely representing that they had secured a deal with another exchange to trade My Big Coin, according to the CFTC’s complaint. The Defendants allegedly encouraged customers to refrain from redeeming their My Big Coin holdings until My Big Coin was active on this “new” exchange.
The Defendants Misappropriated Funds Used for Personal Purchases, Including a Home, Jewelry & Travel
As alleged in the CFTC complaint, Defendants misappropriated virtually all of the approximately $6 million they solicited from customers. Defendants allegedly used these misappropriated funds to purchase a home, antiques, fine art, jewelry, luxury goods, furniture, interior decorating and other home improvement services, travel, and entertainment.
United States District Court Issues Restraining Order Freezing Assets and Protecting Books and Records
According to the CFTC, on January 16, 2018, a restraining Order, also under seal, was issued freezing the virtual currency Defendants’ assets. The federal judge’s Order also froze the assets of Relief Defendants Kimberly Renee Benge, Kimberly Renee Benge d/b/a Greyshore Advertisement a/k/a Greyshore Advertiset, Barbara Crater Meeks, Erica Crater, Greyshore, LLC, and Greyshore Technology, LLC for allegedly receiving customer funds without providing any legitimate services to clients and without any interest or entitlement to such customer funds. The court’s restraining Order also prohibits the Defendants and Relief Defendants from destroying or altering books and records.
My Big Coin Virtual Currency Investors
My Big Coin investors should be aware that the CFTC, in its continuing litigation, seeks civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registration bans, and permanent injunctions against further violations of the federal commodities laws, as charged.
Image: Bitcoin; Wikimedia Commons (https://en.bitcoin.it/wiki/Promotional_graphics); CC BY-SA 3.0
Virtual Currency Investors
Please click Kehoe Law Firm, P.C. for more information about cryptocurrencies, Initial Coin Offerings, and other class action investigations.
Bitcoin and other virtual currency/cryptocurrency investors are also encouraged to review the following SEC and CFTC cryptocurrency- and Initial Coin Offering-related information:
SEC Chairman Jay Clayton Statement on Cryptocurrencies and Initial Coin Offerings (Dec. 11, 2017)
SEC Division of Enforcement and SEC Office of Compliance Inspections and Examinations Statement on Potentially Unlawful Promotion of Initial Coin Offerings and Other Investments by Celebrities and Others (Nov. 1, 2017)
Investor Alert: Public Companies Making ICO-Related Claims (Aug. 28, 2017)
Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO (July 25, 2017)
Investor Bulletin: Initial Coin Offerings (July 25, 2017)
Investor Alert: Bitcoin and Other Virtual Currency-Related Investments (May 7, 2014)
Investor Alert: Ponzi Schemes Using Virtual Currencies (July 23, 2013)
CFTC Customer Advisory: Understand the Risks of Virtual Currency Trading (December 15, 2017)
A CFTC Primer on Virtual Currencies (October 17, 2017)
Source: CFTC.gov, SEC.gov
Jan 24, 2018 | Securities Class Action Archive
Obalon Securities Investigation As a Result of the Company’s Cancellation of a Previously Announced Public Stock Offering of 5,454,545 Common Stock Shares
Kehoe Law Firm, P.C. is investigating claims on behalf of Obalon investors to determine whether Obalon Therapeutics and certain of its officers or directors engaged in securities fraud or other unlawful business practices.
On January 23, 2018, Obalon Therapeutics, Inc., “a San Diego-based company focused on developing and commercializing novel technologies for weight loss,” issued a press release
. . . announc[ing] the termination of the underwriting agreement and cancellation of its previously announced public offering . . . of 5,454,545 shares of its common stock at a public offering price of $5.50 per share.
UBS Investment Bank, Canaccord Genuity and Stifel were acting as joint book-running managers for the offering. BTIG was acting as a co-manager. The offering was being made pursuant to a shelf registration statement . . . previously filed with and declared effective by the U.S. Securities and Exchange Commission.
[Obalon’s] [o]ffering was scheduled to close on January 23, 2018. However, a purported whistleblower contacted KPMG LLP, [Obalon’s] independent auditors, to make certain allegations relating to allegedly improper revenue recognition during [Obalon Therapeutics’] fourth fiscal quarter of 2017 (“Q4 2017”). These allegations were reported to Obalon late in the day on January 22, 2018, making it infeasible for the [Obalon] to complete an investigation of the allegations prior to the intended closing of the public offering.
Obalon’s Audit Committee will oversee an internal investigation of these allegations . . .. [Obalon Therapeutics] is currently unable to predict the timing or outcome of the [i]nvestigation. Based on information known at this time, [Obalon’s] management does not currently believe material adjustments to the preliminary, unaudited revenue for Q4 2017 and full year 2017 previously reported by [Obalon] will be required as a result of these allegations. [Obalon Therapeutics] intends to make a further announcement regarding the outcome of the Investigation as soon as practicable.
[Emphasis added]
Obalon’s Announcement of The Cancellation of Its Public Stock Offering Results in OBLN Stock Drop
On the news of the cancellation of its public stock offering, Obalon’s stock dropped $1.73, or 33.33%, to close at $3.46 on January 23, 2018.
©2017 Google LLC, used with permission. Google and Google logo are registered trademarks of Google LLC
Obalon Therapeutics, Inc.
Obalon Therapeutics, Inc. describes itself as
. . . an engineering-driven medical technology company with a singular focus on innovative, high-quality gastric balloon technology. Located in San Diego, California, the technical team at Obalon has a long history of working closely with leading clinicians to develop innovative medical products that revolutionize treatment of chronic disease. As a company, [Obalon] believe[s] in the fundamental value of imagination and invention, combined with rigorous testing and analysis, to ensure the highest levels of safety and performance. The result is a user-focused approach that deploys the power of advanced technological thinking to support clinical treatment objectives.
Obalon Therapeutics Stock Holders
If you own, or otherwise acquired, Obalon stock and have questions or concerns about Kehoe Law Firm’s class action investigation, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Jan 22, 2018 | Securities Class Action Archive
Aerohive Networks, Inc. Class Action Filed on Behalf of Investors Who Purchased, or Otherwise Acquired, Shares of Aerohive Between November 1, 2017 and January 16, 2018
Aerohive Networks, Inc. (NYSE:HIVE)
On January 19, 2018, a class action lawsuit was filed against Aerohive Networks, Inc. (McGovney v. Aerohive Networks, Inc., et al, No. 18-00435) in United States District Court, Northern District of California, on behalf of a class consisting of all persons and entities, other than the named Defendants, who purchased, or otherwise acquired, the securities of Aerohive Networks between November 1, 2017 and January 16, 2018, both dates inclusive.
The class action lawsuit seeks to recover compensable damages caused by the Aerohive Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that the Aerohive Defendants made materially false and/or misleading statements by misrepresenting and failing to disclose adverse facts pertaining to Aerohive’s business, operational and financial results known to the Aerohive Defendants or recklessly disregarded by them.
According to the class action complaint, on November 1, 2017, during Aerohive’s Q3 2017 conference call, Aerohive’s CFO, John Ritchie, stated that “[w]e are currently expecting Q4 revenue in the range of $40 million to $42 million,” and that “[w]e realized significant sales efficiency with our non-GAAP sales and marketing costs.”
On January 16, 2018, according to the class action complaint, Aerohive announced that it “expects net revenue for the fourth quarter to be approximately $37 million, which is below [Aerohive’s] previously stated guidance of $40 million to $42 million.” Aerohive’s President and CEO, David Flynn, stated that Aerohive “delivered non-GAAP operating profitability in [Aerohive’s] fourth quarter, but were disappointed that [Aerohive’s] revenue was below [its] prior guidance.” The CEO further stated, “Following the change in [Aerohive’s] leadership at the end of [its] third quarter, [Aerohive] uncovered underlying sales execution issues which became fully apparent in the last month of the fourth quarter.”
According to the class action complaint, on this news, Aerohive shareholders were damaged when Aerohive’s share price fell $1.63 per share, or over 29%, from Aerohive’s previous closing stock price to close at $4.07 per share on January 17, 2018.
Aerohive’s Stock Closing Price on January 17, 2018
Source: Google Finance™©2017 Google LLC, used with permission. Google and Google logo are registered trademarks of Google LLC
Aerohive Networks, Inc. Investors
If you purchased, or otherwise acquired, shares of Aerohive Networks, Inc. stock between November 1, 2017 and January 16, 2018 and have questions or concerns about your potential legal rights or claims, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Jan 22, 2018 | Securities Class Action Archive
Class Action Filed on Behalf of Advanced Micro Devices Investors Who Purchased, or Otherwise Acquired, AMD Securities Between February 21, 2017 and January 11, 2018
Advanced Micro Devices, Inc. (NASDAQ:AMD)
On January 16, 2018, a class action was filed against California-based Advanced Micro Devices, Inc. and certain of its officers in United States District Court, Northern District of California, (Kim v. Advanced Micro Devices, Inc., et al, No. 18-00321), on behalf of a class consisting of investors who purchased or otherwise acquired the securities of AMD between February 21, 2017 and January 11, 2018, both dates inclusive (the “Class Period”).
The class action lawsuit against Advanced Micro Devices seeks to recover compensable damages caused by the Advance Micro Devices Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Alleged Materially False and Misleading Statements and Failure to Disclose a Fundamental Security Flaw in AMD’s Processor Chips
According to the class action complaint, the AMD Defendants
. . . throughout the Class Period, . . . made materially false and misleading statements regarding [AMD’s] business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) a fundamental security flaw in AMD’s processor chips renders them susceptible to hacking; and (ii) as a result, AMD’s public statements were materially false and misleading at all relevant times.
On January 3, 2018, media outlets reported that Google Project Zero’s security team had discovered serious security flaws affecting computer processors built by Intel Corporation (“Intel”), AMD and other chipmakers. In a blog post, the Project Zero team stated that one of these security flaws—dubbed the “Spectre” vulnerability—allows third parties to gather passwords and other sensitive data from a system’s memory.
On January 3, 2018, in response to the Project Zero team’s announcement, a spokesperson for AMD advised investors that while its own chips were vulnerable to one variant of Spectre, there was “near zero risk” that AMD chips were vulnerable to the second Spectre variant.
The class action complaint filed against AMD stated that in a post-market press release issued by Advanced Micro Devices on January 11, 2018, AMD acknowledged that its chips were, in fact, susceptible to both variations of the Spectre security flaw.
AMD CEO Lisa Su Confirms Susceptibility of AMD Products to Spectre Vulnerabilities & AMD Stock Drop
Further, according to the AMD class action complaint, on January 11, 2018, “. . . during an interview with Yahoo Finance, AMD’s Chief Executive Officer . . . Lisa Su confirmed news that its products were susceptible to Spectre vulnerabilities, stating: “to clarify, for Meltdown, AMD is not susceptible… we don’t have a susceptibility to that variant. But with Spectre, AMD is susceptible.” [Emphasis in original]
The price of AMD’s stock share price fell $0.12, or 0.99%, on this news to close at $12.02 on January 12, 2018.
Investors Who Purchased Advanced Micro Devices Stock Shares
If you purchased, or otherwise acquired AMD stock shares between February 21, 2017 and January 11, 2018, both dates inclusive, and have questions or concerns about your potential legal rights or claims, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Jan 22, 2018 | Consumer Protection, Employment & Technology Archive
Spectre and Meltdown Computer Security Vulnerabilities Explained
According to CSO’s January 15, 2018 article, “Spectre and Meltdown Explained: What they are, how they work, what’s at risk,” by Josh Fruhlinger:
Spectre and Meltdown are the names given to a trio of variations on a vulnerability that affects nearly every computer chip manufactured in the last 20 years. The flaws are so fundamental and widespread that security researchers are calling them catastrophic. [Emphasis added]
Spectre and Meltdown: What Are These Two Security Vulnerabilities?
According to CSO, the Spectre and Meltdown security vulnerabilities
. . . are the names given to different variants of the same fundamental underlying vulnerability that affects nearly every computer chip manufactured in the last 20 years and could, if exploited, allow attackers to get access to data previously considered completely protected. Security researchers discovered the flaws late in 2017 and publicized them in early 2018. Technically, there are three variations on the vulnerability, each given its own CVE number; two of those variants are grouped together as Spectre and the third is dubbed Meltdown. [Emphasis added]
. . .
All of the variants of this underlying vulnerability involve a malicious program gaining access to data that it shouldn’t have the right to see, and do so by exploiting two important techniques used to speed up computer chips, called speculative execution and caching. [Emphasis added]
Spectre and Meltdown Differences & Their Dangers
The CSO article further stated that
. . . Spectre and Meltdown could allow potential attackers to get access to data they shouldn’t have access to . . . but their effects are somewhat different:
- Meltdown got its name because it “melts” security boundaries normally enforced by hardware. By exploiting Meltdown, an attacker can use a program running on a machine to gain access to data from all over that machine that the program shouldn’t normally be able to see, including data belonging to other programs and data that only administrators should have access to. Meltdown doesn’t require too much knowledge of how the program the attacker hijacks works, but it only works with specific kinds of Intel chips. This is a pretty severe problem but fixes are being rolled out. [Emphasis added]
- By exploiting the Spectre variants, an attacker can make a program reveal some of its own data that should have been kept secret. It requires more intimate knowledge of the victim program’s inner workings, and doesn’t allow access to other programs’ data, but will also work on just about any computer chip out there. Spectre’s name comes from speculative execution but also derives from the fact that it will be much trickier to stop — while patches are starting to become available, other attacks in the same family will no doubt be discovered. That’s the other reason for the name: Spectre will be haunting us for some time. [Emphasis added]
Regarding the dangers of Spectre and Meltdown, the CSO article stated:
Spectre and Meltdown both open up possibilities for dangerous attacks. For instance, JavaScript code on a website could use Spectre to trick a web browser into revealing user and password information. Attackers could exploit Meltdown to view data owned by other users and even other virtual servers hosted on the same hardware, which is potentially disastrous for cloud computing hosts. [Emphasis added]
But beyond the potential specific attacks themselves lies the fact that the flaws are fundamental to the hardware platforms running beneath the software we use every day. Even code that is formally secure as written turns out to be vulnerable, because the assumptions underlying the security processes built into the code — indeed, built into all of computer programming — have turned out to be false. [Emphasis added]
The CSO article also provides details about speculative execution, caching, protected memory, Spectre and Meltdown patches, as well as when PCs, Macs, iPhones, Androids or browsers will get a patch and information about the impact of Spectre and Meltdown on performance.
Spectre and Meltdown: An Informative Red Hat Video
Red Hat’s YouTube video, “Meltdown and Spectre in 3 Minutes,” by provides a good, basic explanation of the two threats and what is being done about the security vulnerabilities.
Image: Pixabay, axonite, CC0 1.0 Universal
Kehoe Law Firm Class Action Investigations
Please click Apple iPhone Slowdown, Apple iPhone Class Action, iPhone Slowdown Lawsuits, Intel Class Action Lawsuits, INTC Chip Processor, and AMD for information about other ongoing class action investigations.
