Ponzi Scheme

News & Analysis as of

$6.5M Fine for Persistent BSA/AML Failures: Prelude to OCC's Announcement of Tougher Enforcement Environment

Why it matters - A $6.5 million civil money penalty imposed against a $1.57 billion Florida bank for persistent anti-money laundering (AML) and Bank Secrecy Act (BSA) deficiencies provided an appropriate back drop for...more

SEC Describes Recent Efforts to Combat Pyramid Schemes and Affinity Frauds

Over the past two years, the Securities and Exchange Commission (SEC) has stepped up enforcement actions against pyramid schemes and related affinity frauds. Last week, in a speech at the University of Illinois at Chicago,...more

Do Fidelity Policies Issued to Individual Partners Provide Coverage for Theft of Partnership Earnings?

The Eighth Circuit is set to decide this question in 3M Company, et al. v. National Union Fire Insurance Company of Pittsburgh, Pa., et al., Appeal No. 15-3495. The answer will likely determine whether a blanket crime policy...more

To submit or not to submit – questions of jurisdiction

This appeal arose out of the litigation fallout from the Bernard Madoff Ponzi scheme. In the appeal, the Privy Council considered whether, at common law, an agreement to submit to jurisdiction must be express or whether it...more

Your daily dose of financial news The Brief – 2.8.16

Friday’s jobs report was disappointing as compared to the month earlier, but it contained news of a half a percentage point increase in average hourly earnings that pleased some economists who have been worrying about...more

Your daily dose of financial news The Brief – 2.2.16

News has emerged from China that online finance company Ezubao, a purported peer-to-peer lender, was running a Ponzi scheme that “bilked investors out of more than $7.6 billion, spent lavishly on gifts and salaries and buried...more

Second Circuit Affirms District Court Ruling, Dismisses Case Alleging Breach of Fiduciary Duty

On January 6, the Court of Appeals for the Second Circuit affirmed the Southern District of New York’s decision to dismiss a derivative action alleging that the Chief Executive Officer, Chairman of the Board of Directors, ten...more

Your daily dose of financial news The Brief – 1.8.16

Some broader perspective on the latest round of plunging Chinese markets, namely, the harsh disruption of what had been touted by President Xi Jinping mere weeks ago as “a new era of economic management [with] policy...more

The SEC Files Another Action Based on ZeeksRewards

ZeeksRewards is the case that just keeps on giving. The multi-level pyramid and Ponzi scheme has generated two prior SEC enforcement actions. One involved the company, Rex Ventures Group, LLC, and its principal, Paul Burks....more

Bridging the Week - December 2015

CFTC Brings First Insider Trading-Type Enforcement Action Based on New Anti-Manipulation Authority: Last week the Commodity Futures Trading Commission brought and settled its first enforcement action sounding in the...more

SEC Prevails in Trial of Ponzi Scheme Case

While Ponzi scheme cases have become a staple of SEC Enforcement in recent years, most settle. Last week the SEC prevailed in one of the few that proceeded to trial. SEC v. National Note of Utah, Civil Action No....more

SEC Files Complaint Against Bitcoin Mining Companies for Running Alleged Ponzi Scheme

On December 1, the SEC announced that it charged two Connecticut-based Bitcoin mining companies and their founder with allegedly running a Ponzi scheme, from approximately August 2014 through December 2014, to defraud...more

SEC Seeks to Bring Down Ponzi Scheme Selling Life Settlements

On November 10, 2015, the Securities and Exchange Commission (“SEC”) filed a complaint in the Northern District of Georgia against James Torchia and the companies under his control alleging that Torchia is running a Ponzi...more

SEC Brings Actions Against Ponzi Schemer, Client

Ponzi scheme cases have, of course, become a staple of SEC enforcement since the discovery of Madoff’s unprecedented scheme. While there seems to be a virtually endless number of these cases centered on the preverbal “to good...more

Case Summaries: Expired Appeals

Clark v. Institute of Chartered Accountants of Alberta (Complaints Inquiry Committee), 2015 ABCA 271, concluding that an appeal of disciplinary findings to the Court of Appeal should not be restored after it was deemed...more

New Jersey Resident Charged with Securities and Wire Fraud

On October 1, the U.S. Attorney for the Southern District of New York filed a complaint against New Jersey fund manager William J. Wells charging him with running a “Ponzi” scheme which raised over $1.5 million from...more

Bitcoin Week in Review 09.19.15 – 09.25.15

Below is a summary of some of the significant legal and regulatory actions that occurred over the past week. This alert is not intended to be a comprehensive list of all such developments, but rather a selection of...more

This Week In Securities Litigation

The Commission responded to critics of its administrative proceedings this week, proposing changes to the Rules of Practice which govern them. If adopted the new rules would modify the time period within which the actions...more

Just How Scary is the SEC? “Fear” Not Sufficient Grounds to Duck Administrative Subpoena

A witness testifying under oath before the SEC recently refused to answer any questions directed to him, not because of any privilege, but rather — as he said, sixty-eight different times – because he was “scared” and...more

Orrick's Financial Industry Week in Review

ESMA Final Report on Technical Advice on Delegated Acts Required Under the CSDR - On August 5, 2015, the European Securities and Markets Authority (ESMA) published its final report (ESMA/2015/1219) setting out technical...more

Golf Channel to Get a Mulligan?

In a surprise move, the Fifth Circuit vacated its recent, controversial Golf Channel opinion, potentially giving the Golf Channel a second chance in a case that seemed lost. As I discussed in my previous post, the Fifth...more

SEC Brings Complaint in $68 Million Affinity Fraud Scheme

On July 6, the Securities and Exchange Commission filed a complaint in connection with a $68 million affinity fraud scheme allegedly orchestrated by Bingqing Yang, through her wholly owned management companies, Luca...more

Standing in the Shoes or Freeing Evil Zombies? The Public Policy of Applying the In Pari Delicto Defense to Actions Brought by a...

In pari delicto is an equitable defense asserted when a defendant claims that a plaintiff is equally at fault for the wrong that has befallen him. The doctrine is “rooted in the common-law notion that a plaintiff’s recovery...more

SEC Files Complaint Against U.S. Company for Ponzi Scheme - Includes EB-5 Investors

On Monday July 6, 2015, the Securities and Exchange Commission (the "SEC") charged Luca International Group, LLC, a San Francisco area oil and gas company, and its affiliated companies ("Luca") and certain of its executives,...more

SEC Charges EB-5 Fund Operators and Finders

The Securities and Exchange Commission (the “Commission” or “SEC”) has become increasingly active in enforcing alleged violations of U.S. securities laws arising under the EB-5 Immigrant Investor visa program. EB-5...more

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