Feb 14, 2022 | Blog, Shareholder & Investor Protection
BlockFi Lending Inc. Agrees To Pay $100 Million In Penalties And Pursue Registration Of Its Crypto Lending Product
On February 14, 2022, the SEC announced that it charged BlockFi Lending LLC (“BlockFi”) with failing to register the offers and sales of its retail crypto lending product.
The SEC also charged BlockFi with violating the registration provisions of the Investment Company Act of 1940. To settle the SEC’s charges, BlockFi agreed to pay a $50 million penalty, cease its unregistered offers and sales of the lending product, BlockFi Interest Accounts (“BIAs”), and attempt to bring its business within the provisions of the Investment Company Act within 60 days. BlockFi’s parent company also announced that it intends to register under the Securities Act of 1933 the offer and sale of a new lending product. In parallel actions, BlockFi agreed to pay an additional $50 million in fines to 32 states to settle similar charges.
According to the SEC’s order, from March 4, 2019 until today, BlockFi offered and sold BIAs to the public. Through BIAs, investors lent crypto assets to BlockFi in exchange for the company’s promise to provide a variable monthly interest payment. The order finds that BIAs are securities under applicable law, and the company therefore was required to register its offers and sales of BIAs but failed to do so or to qualify for an exemption from SEC registration. Additionally, the order finds that BlockFi operated for more than 18 months as an unregistered investment company because it issued securities and also held more than 40 percent of its total assets, excluding cash, in investment securities, including loans of crypto assets to institutional borrowers.
The order also found that BlockFi made a false and misleading statement for more than two years on its website concerning the level of risk in its loan portfolio and lending activity.
Without admitting or denying the SEC’s findings, BlockFi agreed to a cease-and-desist order prohibiting it from violating the registration and antifraud provisions of the Securities Act and the registration provisions of the Investment Company Act. BlockFi also agreed to cease offering or selling BIAs in the United States.
Feb 13, 2022 | Car Problems Car Complaints
Class Action Lawsuit Filed on Behalf of Owners and Lessees of 2022 Mitsubishi Outlander Vehicles
On February 9, 2022, a class action lawsuit was filed in United States District Court, District of Massachusetts, against Mitsubishi Motors North America, Inc. (“Mitsubishi”) on behalf of past and present owners and lessees of defective 2022 Mitsubishi Outlander vehicles, because the vehicles, allegedly, contain defective hoods that flutter and bounce when driving.
According to the class action complaint, the defective hood poses a safety hazard, because a bouncing and fluttering hood distracts drivers concerned that the hood may be become unlatched and open at any moment, thus drawing attention to the hood defect and away from other members of the motoring public and/or pedestrians.
Despite being notified of the hood defect from, among other things, pre-production testing, numerous consumer complaints (both to the NHTSA and on Mitsubishi enthusiast websites) warranty data, and dealership repair orders, Mitsubishi has not, according to the complaint, recalled the subject vehicles to repair the defect and has not offered a suitable repair or replacement hood that is not defective.
OWNERS AND LESSEES OF 2022 MITSUBISHI OUTLANDER VEHICLES WITH A MALFUNCTIONING HOOD ARE ENCOURAGED TO COMPLETE THE FORM ON THE RIGHT OR CONTACT KEHOE LAW FIRM, P.C., [email protected], FOR A FREE, CONFIDENTIAL CONSULTATION AND NO-OBLIGATION EVALUATION OF POTENTIAL LEGAL CLAIMS.
Feb 13, 2022 | Shareholder Investigations
Cortexyme, Inc. Investor Alert – Cortexyme Shareholders Who Have Suffered Losses On Their CRTX Investment Encouraged To Contact Kehoe Law Firm, P.C.
On January 26, 2022, Cortexyme, Inc. (“Cortexyme” or the “Company”) (NASDAQ: CRTX) announced that it received a letter from the U.S. Food and Drug Administration (“FDA”) on January 25, 2022, placing a full clinical hold on atuzaginstat’s (COR388) Investigational New Drug application (IND 134303). The Company also announced the immediate implementation of a cost reduction program to rationalize operations.
On this news, shares of Cortexyme dropped more than 30%, closing at $6.21 per share on January 26, 2022.
Cortexyme also reported that on February 2, 2022, the Company’s Board of Directors approved the previously announced cost reduction program to rationalize operations and to allow continued support for the needs of its business following the clinical hold on atuzaginstat’s (COR388) Investigational New Drug application (IND 134303). Under the cost reduction program, Cortexyme stated that it is reducing headcount by approximately 53% through a workforce reduction.
Cortexyme Shareholders Who Have Lost Money On Their Investment
Cortexyme investors who have suffered financial losses are encouraged to complete Kehoe Law Firm’s Securities Class Action Questionnaire or contact Kehoe Law Firm, P.C., [email protected], to discuss potential legal claims.
Feb 10, 2022 | Whistleblower
SEC Proposes Changes To Two Whistleblower Program Rules
On February 10, 2022, the Securities and Exchange Commission (“SEC”) announced that it has proposed two amendments to the rules governing its whistleblower program. The first proposed amendment concerns award claims for related actions that would be otherwise covered by an alternative whistleblower program. The second proposed amendment affirms the SEC’s authority to consider the dollar amount of a potential award for the limited purpose of increasing an award, but not to lower an award.
Specifically, the SEC is proposing two amendments to Exchange Act Rules 21F-3 and 6, the rules governing its whistleblower program:
● The first proposed amendment addresses instances when a whistleblower from the SEC’s program receives an award from another, non-SEC, whistleblower program.
● The second affirms the SEC’s authority to consider the dollar amount of a potential award for the limited purpose of increasing an award, but not to lower an award.
Why This Is Important
Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act added Section 21F to the Securities Exchange Act of 1934, establishing the SEC’s whistleblower program. Among other things, Section 21 authorizes the SEC to make monetary awards to eligible individuals who voluntarily provide original information that leads to successful SEC enforcement actions resulting in monetary sanctions exceeding $1 million and certain successful related actions. Awards must be made in an amount equal to 10-30 percent of the monetary sanctions collected.
Since the program’s inception, the SEC has ordered more than $1.2 billion to 245 individuals whose information and cooperation assisted the SEC in bringing successful enforcement actions.
How This Rule Applies
Related Action Claims Covered By Another Whistleblower Program
● Under Exchange Act Section 21F(b) and Rule 21F-11, a whistleblower who obtains an award based on an SEC covered action also may be eligible for an award based on monetary sanctions that are collected in an action brought by other statutorily-identified authorities.
● The proposing rule would allow the SEC to make an award for a related action that might otherwise be covered by an alternative whistleblower program, even where the alternative whistleblower program has the more direct or relevant connection to the related action in certain circumstances. The proposing rule offers multiple potential approaches:
Comparability: Under this approach, if a claimant files a related-action award application, and the alternative award program is not comparable to the SEC’s program, because the statutory award range is more limited, awards are subject to an award cap, or the other award program is discretionary and not mandatory, the SEC would treat the non-SEC action as “related” for purposes of the SEC’s award program, regardless of whether the alternative award program has a more direct or relevant connection to the action. The SEC also would make an award on a potential related action without regard to which program had the more direct and relevant connection to the action if the maximum award that the SEC could pay on the action would not exceed $5 million.
Whistleblower Choice: The proposed release offers an alternative option that would allow a meritorious whistleblower to decide whether to receive a related-action award from the SEC or the authority administering the other award program. The whistleblower would not be required to select which program to receive the award from until both programs had determined the award amount they would pay.
Offset Approach: The SEC would determine the award percentage it would pay on the related action but offset from the SEC’s total award payment by the dollar amount the whistleblower received for the related action from the other award program.
Topping Off Approach: The SEC would have the discretion to increase the award on the SEC covered action (up to 30 percent) if the SEC concludes that the other whistleblower program’s award for the related action was inadequate for any reason.
● Under the Comparability or Whistleblower Choice approach, the whistleblower would be required to make an irrevocable waiver of any claim to an award from the other whistleblower award program.
Discretion To Consider The Dollar Amount Of The Award
● In 2020, amendments added language to Rule 21F-6 stating that the SEC has discretion to consider the dollar amount of a potential award when making an award determination.
● The proposed changes would affirm the SEC’s authority to consider the dollar amount of a potential award for the limited purpose of increasing the award amount, but would eliminate the SEC’s authority to consider the dollar amount of a potential award for the purpose of decreasing an award.
The public comment period will remain open for 60 days following publication of the proposing release on the SEC’s website or 30 days following publication of the proposing release in the Federal Register, whichever period is longer.
Source: SEC.gov
Questions Or Concerns About Voluntarily Providing Information To The SEC And Whistleblower Award Eligibility?
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. SEC whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.
If you have questions or concerns about voluntarily providing information to the SEC regarding violations of the federal securities laws, including questions about whistleblower award eligibility, or the form and manner in which the information is required to be provided to the SEC, please contact Kehoe Law Firm, P.C. by completing the form above on the right, sending an e-mail to [email protected] or by contacting either Michael Yarnoff, Esq., [email protected], (215) 792-6676, Ext. 804, or John Kehoe, Esq., [email protected], (215) 792-6676, Ext. 801.
Feb 9, 2022 | Blog, Product Liability
Home Easy Recalls Geek Heat Personal Heaters Due To Fire Hazard
The recall involves the Home Easy Geek Heat DH-QN06 personal heaters. The Geek Heat logo is printed on the top of the heater near the vent and the model number is printed on the underside of the heater. The heater measures 20 inches in length, 13 inches in width and is sold in white.
Consumers should immediately stop using the recalled heaters and contact Home Easy for a full refund. Consumers should destroy the recalled heaters by unplugging the heater prior to cutting the electrical cord making the product inoperable and then prominently mark on the product “defective” before disposal, following local disposal guidelines. Consumers should take a photo of the cut electrical cord for submission to Home Easy at [email protected]. Home Easy is contacting all known purchasers directly.
Home Easy has received three reports of the toggle power switch causing a fire. No injuries or property damage have been reported.
For more information, please click Personal Electric Heaters.
BFG North Carolina Recalls Chest Of Drawers Due To Tip-Over And Entrapment Hazards; Sold Exclusively at Rooms To Go
This recall involves River Street Five-Drawer Chests, sold in mocha and graphite colors. The River Street chests measure about 46.25 inches tall, 35.15 inches wide and 16.9 inches deep. “INDD 2425-6 CHEST,” “Made in Brazil.” SKU number 32624252 (mocha) or “INDD 423-6 CHEST,” “Made in Brazil,” SKU number 32624238 (graphite), and the manufacture date (“Prod. Date”) – in month/day/year format (MM/DD/YYYY) – are printed on a label on the back of unit along with the words “Manufacturer – Industria de Moveis Rotta Ltda.” The recalled chests were manufactured between December 2018 and October 2021.
Consumers should immediately stop using the recalled chests and contact Rooms To Go for a free in-home repair by trained technicians, free replacement, or a full refund of the purchase price in the form of a Rooms To Go store credit, including free pick-up of the chest. Rooms To Go is contacting all known purchasers directly.
No incidents or injuries have been reported.
For more information, please click River Street Five-Drawer Chests.
Source: CPSC.gov
Individuals Harmed By Defective Or Misleading Consumer Products And/Or Product Recalls
If you have been the victim of a defective or misleading consumer product and/or product recall, please contact Kehoe Law Firm, P.C., [email protected], for a free, confidential consultation and no-obligation evaluation of potential legal claims.
