securities fraud

Subscribe to securities fraud via RSS

The Sarbanes-Oxley Act‘s legacy may be mixed in some important ways, but one of it more enduring aspects has been its requirement for publicly traded companies to have mechanisms to for employees report concerns anonymously and confidentially. Most companies now have ethics reporting hotlines – in fact, the SOX confidential reporting requirement has spawned an entire industry of third-party firms providing hotline services to public companies, according to a recent Wall Street Journal article. As the Journal article reports, these hotlines have in fact in some instance led to the uncovering of serious concerns, including even instance of accounting misreporting. The September 12, 2025, Journal article, which is entitled “Sex Scandals. Accounting Fraud. It’s All Showing Up on the Corporate Hotline,” can be found here.Continue Reading An Important and Enduring SOX Legacy: Ethics Reporting Hotlines

In parallel actions last week, the U.S. Attorney for the Southern District of New York and the SEC charged a tech exec with securities fraud in connection with fundraising for his company based on misrepresentations about the company’s AI capabilities. The exec, Albert Saniger, allegedly raised over $42 million by misrepresenting to investors that his company’s app used AI technology to complete online shopping purchases, when in fact the purchases were completed manually by contract workers located in the Philippines and elsewhere. As discussed below, there are several interesting features to these AI-related allegations.Continue Reading Tech Exec Charged with AI Washing-Related Securities Fraud

Today it is time for a post from the Annals of Securities Fraud. That is because Monday, December 11, 2023, marked the 15th anniversary of the arrest of Bernie Madoff in connection with one of the largest securities frauds in U.S. history. The scale of Madoff’s Ponzi scheme fraud is still, even after all of these years, just astonishing. Prosecutors estimated that the paper losses totaled nearly $65 billion, and have said they believe that the scheme defrauded as many as 37,000 people in 136 countries.  

What has been interesting in the scheme’s wake has been the efforts to recover funds to compensate Madoff’s victims. Irving Picard, the court-appointed trustee overseeing the liquidation of Madoff’s firm, has recovered approximately $14.6 billion. And perhaps even more interesting, Picard’s recovery efforts are continuing to this day, 15 years after Madoff’s arrest, as reported in David Thomas’s December 12, 2023 Reuters article, here.Continue Reading Bernie Madoff Ponzi Scheme: Still Crazy After All These Years

As I have documented on this site, many COVID-related securities suits have been filed since the initial outbreak of the pandemic in March 2020. At the core of many of these lawsuits are corporate claims that the defendant companies were positioned to profit from the pandemic. The U.S. Department of Justice now reports that a biotech executive has pleaded guilty to securities fraud and other charges in connection with his company’s false claims at the outset of the pandemic that it had developed a new blood-based test for COVID-19. A copy of the Department of Justice’s December 8, 2023, press release about the guilty plea can be found here.Continue Reading Biotech Exec Pleads Guilty to COVID-Related Securities Fraud

Regular readers of this blog know that class action securities fraud lawsuits almost never go to trial. But “almost never” is not the same as “never.” Every now and then, there is an unusual case that does go to trial. This past week, a federal court jury reached a verdict in one of those rare and unusual cases. On June 14, 2022, a federal jury in the Southern District of New York held after trial that Michael Reger, co-founder of Dakota Plains Holdings, Inc. was liable for securities fraud and control person fraud, but not for insider trading. Reger was the sole remaining defendant in the case after the other defendants last month reached a settlement. A copy of the jury’s June 14, 2022 verdict form can be found here.
Continue Reading Rare Jury Verdict in Securities Fraud Lawsuit

In recent years, the SEC has established itself as an active cryptocurrency enforcement agency, according to a new report from Cornerstone Research. The report, entitled “SEC Cryptocurrency Enforcement: Q3 2013 – Q4 2020,” details that between July 2013 and year end 2020, the agency initiated a total of 75 enforcement actions and 19 trading suspension orders against respondents involved with digital assets. The report also shows that the agency’s cryptocurrency activity has steadily increased throughout the 2013-2020 period. A copy of the report can be found here. Cornerstone Research’s May 11, 2021 press release about the report can be found here.
Continue Reading SEC Establishes its Cryptocurrency Enforcement Credentials

bukh_small
Arkady Bukh

In the following guest post, Arkady Bukh, founding partner of Bukh Law Firm, takes a look at the U.S. Supreme Court’s 2014 decision in Loughrin v. United States (here) and examines how the Court’s holding with respect to the federal bank fraud statute could reach far beyond the realm of bank fraud to reach the securities fraud arena.

 

I would like to thank Arkady for his willingness to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this blog. Please contact me directly if you would like to submit a guest post.

 

Arkady’s guest post follows below. The Bukh Law Firm is dedicated solely to criminal defense. You can contact Arkady at Bukh Law Firm, P.C., 14 Wall St, New York NY 10005, (212) 729-1632, https://www.nyccriminallawyer.com

*******************************************

 

Resolving a Four Way Split

The federal bank fraud statute provides: “Whoever knowingly executes, or attempts to execute, a scheme or artifice – (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned more than 30 years, or both.” 18 U.S.C. § 1344.
Continue Reading Guest Post: How the Supreme Court’s Loughrin Decision May Narrow the Scope of Securities Fraud

In the latest of what undoubtedly will prove to be a surge of Madoff-related litigation, investors have filed two more lawsuits against investment firms that invested their clients’ money with Bernie Madoff, resulting in massive investor losses.

UPDATE: Please note that a regularly updated table of all Madoff investor litigation, including in particular Madoff "feeder…