Friday, August 28, 2015

Enforcement Actions: Week in Review

SEC ENFORCEMENT ACTIONS

SEC Announces Asset Freeze against Alleged EB-5 Fraudster in Seattle Area
August 25, 2015 (Litigation Release No. 173)
Lobsang Dargey, owner of multiple “Path America” companies including Path America SnoCo and Path America KingCo, is accused of defrauding Chinese investors who were seeking American citizenship through the EB-5 Immigrant Investor Pilot Program. The EB-5 program states foreign citizens may qualify for U.S. residency if they make an investment of $500,000 or more that goes to a specified project that creates or preserves at least ten American jobs. In order for a project to qualify for the EB-5 program, the company must submit a business plan that must be approved by the U.S. Citizenship and Immigration Services (USCIS) department. If the company deviates from the approved plan, the USCIS can deny investors citizenship. Dargey misled investors with promises of U.S. residency and failed to inform investors when he deviated from the approved business plan. Of the $125 million Dargey raised, he diverted $14 million for unrelated real estate projects and $3 million for a personal home and personal cash withdrawals.

SEC Charges Former Investment Bank Analyst and Two Others with Insider Trading in Advance of Client Deals
August 25, 2015 (Litigation Release No. 174)
J.P. Morgan investment analyst Ashish Aggarwal is charged with allegedly informing his close friend Shahriyar Bolandian about two, nonpublic acquisition deals that J.P. Morgan was working on. Bolandian traded on the illegal information in accounts belonging to him, his father, and his sister. Additionally, Bolandian tipped off another friend Devan Sadigh, who also traded on the insider information. Bolandian and Sadigh made more than $672,000 in the week leading up to the two acquisitions: Integrated Device Technology’s acquisition of PLX Technology in 2012 and salesforce.com’s acquisition of ExactTarget in 2013.

Fee Rate Advisory #1 for Fiscal Year 2016
August 27, 2015 (Litigation Release No. 175)
The SEC announced that the fees public companies and other issuers to register their securities with the SEC will decrease from $116.20 per million dollars to $100.70 per million dollars. The rate change will go into effect on the first of October, the start of the 2016 fiscal year. The commission projects it will generate $550 million for 2016.


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