Apr 13, 2022 | Blog, Shareholder & Investor Protection
Investors of Electric Last Mile Solutions who held Forum Merger III stock shares are encouraged to CLICK HERE to contact Kehoe Law Firm, P.C. and provide details of their securities holdings.
On June 24, 2021, Forum Merger III shareholders of record as of May 20, 2021 approved a merger between Forum Merger III and ELMS.
On February 1, 2022, after the market closed, ELMS announced that certain Electric Last Mile Solutions executives had resigned following an investigation conducted by a Special Committee of the Board of Directors of ELMS.
Additionally, Electric Last Mile Solutions acknowledged that its previously issued consolidated financial statements should be restated and, therefore, should no longer be relied upon.
On March 11, 2022, ELMS announced that the SEC is investigating matters discussed in previous Electric Last Mile Solutions filings, including disagreements with an accounting firm and compliance with NASDAQ’s listing rules.
ELMS SHAREHOLDERS WHO HELD FORUM MERGER III STOCK ARE ENCOURAGED TO CONTACT MICHAEL YARNOFF, ESQ., (215) 792-6676, EXT. 804, [email protected], [email protected], TO DISCUSS THE BREACH OF FIDUCIARY DUTIES INVESTIGATION AND POTENTIAL LEGAL CLAIMS.
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 9, 2022 | Blog, Shareholder & Investor Protection
SEC Proposes New Rule To Enhance Private Fund Investor Protection
On February 9, 2022, the SEC announced that it voted to propose new rules and amendments under the Investment Advisers Act of 1940 (“Advisers Act”) to enhance the regulation of private fund advisers and to protect private fund investors by increasing transparency, competition, and efficiency in the $18-trillion marketplace.
Among other things, the proposed rules would increase transparency by requiring registered private fund advisers to provide investors with quarterly statements detailing certain information regarding fund fees, expenses, and performance.
For more information, please click either Proposed Rule or Fact Sheet.
SEC Proposes Cybersecurity Risk Management Rules And Amendments For Registered Investment Advisers And Funds
On February 9, 2022, the SEC announced that it voted to propose rules related to cybersecurity risk management for registered investment advisers, and registered investment companies and business development companies (funds), as well as amendments to certain rules that govern investment adviser and fund disclosures.
The proposed rules, among other things, would require advisers and funds to adopt and implement written cybersecurity policies and procedures designed to address cybersecurity risks that could harm advisory clients and fund investors. The proposed rules also would require advisers to report significant cybersecurity incidents affecting the adviser or its fund or private fund clients to the SEC on a new confidential form.
For more information, please click either Proposed Rule or Fact Sheet.
SEC Issues Proposal to Reduce Risks in Clearance and Settlement
On February 9, 2022, the SEC announced that it voted to propose rule changes to reduce risks in the clearance and settlement of securities, including by shortening the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one business day after the trade date (T+1). The proposed changes are designed to reduce the credit, market, and liquidity risks in securities transactions faced by market participants and U.S. investors.
In addition to shortening the standard settlement cycle, the proposal includes rules directed at broker-dealers and registered investment advisers to shorten the process of confirming and affirming the trade information necessary to prepare a transaction for settlement so that it can be completed by the end of trade date. Further, the proposal includes a new requirement to facilitate straight-through processing, which would apply to certain types of clearing agencies that provide central matching services. Central matching service providers help facilitate the processing of institutional trades between broker-dealers and their institutional customers. The proposed rule would require new policies and procedures directed to straight-through processing and require an annual report on progress with the process.
For more information, please click either Proposed Rule or Fact Sheet.
Source: SEC.gov
Jan 26, 2022 | Shareholder & Investor Protection
Proposal To Enhance Investor Protections And Cybersecurity For Alternative Trading Systems Trading Treasuries And Other Government Securities
The Securities and Exchange Commission announced proposed rules to better protect investors and enhance cybersecurity by bringing more Alternative Trading Systems (“ATS”) that trade Treasuries and other government securities under the regulatory umbrella.
The proposal builds upon a 2020 proposal and public comments received in response to that proposal. It would extend Regulation ATS to include systems that offer the use of non-firm trading interest and provide protocols to bring together buyers and sellers for trading any type of security. These Communication Protocol Systems would be required to either register as exchanges or register as broker-dealers and comply with Regulation ATS.
With ATSs becoming increasingly important to government securities trading, the proposal would expand the investor protections of Regulation ATS to those that trade government securities or repurchase and reverse repurchase agreements on government securities. Additionally, the proposal would expand Regulation Systems Compliance Integrity (“SCI”) to government securities to help increase investor protections and address technological vulnerabilities while improving the SEC’s oversight of the core technology of key entities in the markets for government securities.
Source: SEC.gov
Nov 4, 2021 | Shareholder & Investor Protection
New Jersey “Claims Aggregator” And Three Principals Charged By SEC With Defrauding Distribution Funds Established To Return Money To Securities Fraud Victims
On November 4, 2021, the Securities and Exchange Commission announced it charged a New Jersey “claims aggregator” – a firm that submits claims on behalf of its clients to administrators tasked with returning settlement funds to harmed investors – and its three principals with defrauding distribution funds established to return money to securities fraud victims in a multi-year scheme that yielded millions of dollars.
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, alleges that Joseph Cammarata (“Cammarata”), Erik Cohen (“Cohen”), and David Punturieri (“Punturieri”), and two entities that they control, AlphaPlus Portfolio Recovery Corp. and Alpha Plus Recovery LLC (collectively, “AlphaPlus”), stole at least $40 million from approximately 400 distribution funds, including more than $3 million from settlement funds arising from SEC enforcement actions.
The complaint alleges that, starting in 2014, AlphaPlus engaged in a serial scheme to fraudulently obtain money by submitting false claims to settlement fund administrators – purporting to represent clients who had traded the securities that were the subjects of the underlying settlements. The SEC’s complaint further alleges that defendants used false trading data and broker-dealer letterhead they misappropriated from other companies to “document” the purported trades and provide an air of legitimacy to their fake claims.
According to the complaint, Cammarata, Cohen, and Punturieri funneled the fraudulently obtained distributions through a web of accounts they controlled and used the stolen money to pay for numerous personal expenses, such as jewelry, home renovations, luxury automobiles, watercraft, and real estate.
The complaint charges AlphaPlus, Cammarata, Cohen, and Punturieri with violating the anti-fraud provisions of the Securities Exchange Act of 1934. The court granted the SEC’s request for an asset freeze and temporary restraining order. The SEC seeks disgorgement of ill-gotten gains and prejudgment interest, and civil penalties against the defendants. In a parallel action, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced criminal charges against Cammarata, Cohen, and Punturieri.
Source: SEC.gov
Oct 29, 2021 | Shareholder & Investor Protection
Fixed Income Clearing Corporation (“FICC”) Agrees To Pay $8 Million Penalty To Settle SEC Charges
On October 29, 2021, the Securities and Exchange Commission announced that FICC, a clearing agency, has agreed to pay an $8 million penalty to settle SEC charges that it failed to have adequate risk management policies within its Government Securities Division.
According to the SEC’s order, FICC acts as the sole registered clearing agency for transactions in U.S. government securities. FICC substitutes itself for both sides of every transaction that it clears, guaranteeing those transactions and making itself the buyer for every seller and the seller for every buyer. A failure by FICC to manage risk could result, according to the SEC, in significant costs not only to FICC and its participants, but also to other market participants or the broader U.S. financial system.
The SEC’s order found that between April 2017 and November 2018, FICC failed to comply with rules requiring it to have reasonably designed policies and procedures for holding sufficient qualifying liquid resources to meet the financial obligations created by the potential failure of a large participant.
According to the order, FICC did not conduct required analysis of the reliability of its liquidity arrangements, and it failed to conduct required due diligence of its liquidity providers. The SEC’s order also found that in 2015 and 2016, FICC failed to adhere to rules requiring it to have reasonably designed policies and procedures for maintaining and periodically reviewing its margin coverage. According to the order, FICC failed to correct two erroneous assumptions that inflated its coverage even though both errors had been flagged as deficiencies by the SEC’s Division of Examinations.
The SEC’s order found that FICC, a wholly-owned subsidiary of The Depository Trust & Clearing Corporation, violated the Covered Clearing Agency Standards promulgated by the SEC under the Securities Exchange Act of 1934. Without admitting or denying the SEC’s findings, FICC agreed to a censure and the $8 million penalty, as well as to cease and desist from future violations of the charged provisions. FICC also agreed to retain an independent compliance consultant to assess its compliance efforts.
Source: SEC.gov
