Securities and Exchange Commission

The SEC Has Awarded Over $1 Billion to Whistleblowers

Published on: September 16, 2021 | by Iorio Altamirano

On September 15, 2021, the Securities and Exchange Commission (“SEC”) announced whistleblower awards of roughly $110 million and $4 million to two whistleblowers. With these awards, the SEC has issued more than $1 billion to 207 whistleblowers, ten years after the SECs Whistleblower Program became effective. The program has issued a whopping $500 million in the fiscal year 2021 alone.

In the SEC’s press release, SEC Chair Gary Gensler issued the following statement:

“Today’s announcement underscores the important role that whistleblowers play in helping the SEC detect, investigate, and prosecute potential violations of the securities laws. The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.

Did Robinhood Employees Trade GameStop and AMC Before Robinhood’s Public Announcement to Restrict Trading on January 28, 2021?

Published on: September 1, 2021 | by Iorio Altamirano

On September 1, 2021, Robinhood ($Hood) filed its first amendment to its Form S-1 Registration Statement with the U.S. Securities and Exchange Commission (“SEC”).

The public filing, which amends the registration statement that Robinhood filed in connection with its July 2021 initial public offering (IPO), discloses that the SEC’s Division of Examinations and the Financial Industry Regulatory Authority (“FINRA”) have submitted inquires to Robinhood related to whether any employee executed trades in certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., before the public announcement that Robinhood would restrict trading in those securities on January 28, 2021.

On Thursday, January 28, 2021, Robinhood designated specific stocks “position closing only,” restricting its customers from purchasing additional shares in those stocks. The targeted stocks included GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), Nokia (NYSE: NOK), Koss Corporation (NYSE: KOSS), and Express, Inc. (NYSE: EXPR).

Robinhood’s Amended Registration Statement Discloses That Robinhood Is Facing Numerous Lawsuits, Customer Arbitrations, and Regulatory Investigations

Published on: September 1, 2021 | by Iorio Altamirano

On September 1, 2021, Robinhood ($Hood) filed Amendment No 1 to its Form S-1 Registration Statement with the U.S. Securities and Exchange Commission (“SEC”). Form S-1 is the registration statement that Robinhood filed in connection with its July 2021 initial public offering (IPO).

Robinhood’s latest public filing discloses that Robinhood continues to face regulatory, legal, and reputational backlash for its past business practices.

The filing also discloses that the SEC and Financial Industry Regulatory Authority (“FINRA”) are investigating whether any Robinhood employees traded “meme stocks,” including GameStop Corp. and AMC Entertainment Holdings, Inc., before the public announcement that Robinhood would impose trading restrictions on those securities on January 28, 2021.

Whistleblower Awards Alert: The SEC Awards $2.6 Million to Four Whistleblowers

Published on: August 31, 2021 | by Iorio Altamirano

On August 27, 2021, the Securities and Exchange Commission (“SEC”) announced whistleblower awards of roughly $2.6 million to five whistleblowers in three separate regulatory enforcement proceedings. In total, over $16 million has been awarded to SEC whistleblowers this month.

In the first regulatory enforcement proceeding, a whistleblower was awarded approximately $1.2 million for providing the regulator with independent analysis based upon a complex algorithm the whistleblower developed and applied to publicly available data. The information was valuable to the SEC and saved the agency time and resources.

In the second SEC enforcement proceeding, more than $1 million was awarded to three compliance personnel whose information led to a successful regulatory enforcement action. The whistleblower that received the highest award provided “extraordinary assistance and comprehensive information,” according to the SEC’s press release.

Former Worden Capital Management LLC Broker, Donald Fowler, BARRED by FINRA for Churning and Excessively Trading Four Customers’ Accounts

Published on: August 26, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has barred stockbroker Donald Fowler from the securities industry. Mr. Fowler consented to the suspension after FINRA alleged that from December 2014 through December 2018, while associated with Worden Capital Management LLC, Mr. Fowler churned and excessively traded four customers’ accounts in violation of FINRA Rules 2111 and 2010. As a result of churning and excessive trading, the customers incurred high commissions and fees, and significant realized investment losses.

Customers of Mr. Fowler or Worden Capital Management LLC should consult with a securities arbitration law firm. If you or a loved one were a customer of Donald Fowler or Worden Capital Management LLC, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms, such as Worden Capital Management LLC.

SEC Charges John Woods of Southport Capital With Operating $110 Million Ponzi Scheme By Selling Units of Horizon Private Equity, III, LLC

Published on: August 25, 2021 | by Iorio Altamirano

**Update: September 9, 2022** On September 6, 2022, a group of Oppenheimer customers were awarded over $36 million by a FINRA arbitration panel as compensation for their investment losses in Horizon Private Equity, III, LLC. (“Horizon”). Horizon is an alleged Ponzi scheme operated by John Woods, a broker who was registered with Oppenheimer & Co. Inc. Iorio Altamirano LLP encourages all retail investors to contact our law firm for a free and confidential consultation and to review their legal rights.

Original Post:

SEC Charges John Woods of Southport Capital With Operating $110 Million Ponzi Scheme By Selling Units of Horizon Private Equity, III, LLC

Whistleblower Awards: The SEC Awards $9.5 Million to Six Whistleblowers In Less Than a Week

Published on: August 10, 2021 | by Iorio Altamirano

On August 10, 2021, the Securities and Exchange Commission (“SEC”) announced whistleblower awards of nearly $6 million to two whistleblowers who provided information and assistance to the SEC in separate enforcement proceedings. The latest awards come after the SEC revealed on August 6, 2021, an award of more than $3.5 million to three individuals in two separate proceedings.

In the first enforcement proceeding (announced on August 10, 2021), a whistleblower was awarded more than $3.5 million for providing the regulator with valuable new information that resulted in the expansion of an existing investigation into a new geographic area. The whistleblower also provided additional information and assistance to help the agency bring charges in the underlying enforcement action.

In the second enforcement proceeding (announced on August 10, 2021), a whistleblower was awarded more than $2.4 million for providing the SEC with a tip that promoted an investigation. The whistleblower also provided the SEC with documents and identified potential witnesses.

Whistleblower Award Alert: The SEC Awards In Excess of $4 Million to Four Whistleblowers

Published on: August 2, 2021 | by Iorio Altamirano

On August 2, 2021, the Securities and Exchange Commission (“SEC”) announced whistleblower awards of more than $4 million to four whistleblowers who provided information and assistance to the SEC in two separate enforcement proceedings.

In the first enforcement proceeding, a whistleblower was awarded more than $2 million for providing the regulator with information that launched an investigation. The informant also provided the SEC with ongoing assistance by participating in interviews and identifying key individuals and entities. Another whistleblower was issued an award of $150,000 for providing the SEC with information that resulted in an expansion of the investigation.

In the second enforcement action, the SEC awarded more than $1.6 million to two whistleblowers. The first individual provided the SEC with information that alerted the SEC to the violations and was awarded $1.1 million. The second whistleblower was awarded $500,000 for providing significant and timely information.

Whistleblower Award Alert: The SEC Awards Nearly $3 Million to Whistleblower

Published on: July 21, 2021 | by Iorio Altamirano

On July 21, 2021, the Securities and Exchange Commission (“SEC”) announced an award of nearly $3 million to a whistleblower who alerted the SEC to previously unknown conduct that led to a successful SEC enforcement action. According to Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower, the whistleblower “provided substantial additional assistance” to the SEC, which resulted in the SEC saving a “considerable amount of SEC resources.”

In total, the SEC has awarded over $942 million to 186 individuals since the whistleblower program became effective in August 2011. The awards are paid out of an investor protection fund established by Congress financed entirely through monetary sanctions paid to the SEC by securities law violators. Money is not taken or withheld from harmed investors to pay whistleblower awards.

Congress established the whistleblower program to incentivize whistleblowers with specific, timely, and credible information about federal securities law violations to report to the SEC. A whistleblower may receive an award if they voluntarily provide the SEC with qualifying information, leading to successful enforcement. The award can range from 10 percent to 30 percent of the money collected due to the enforcement action.

UBS Settles with SEC Over Unsuitable VXX Investments

Published on: July 19, 2021 | by Iorio Altamirano

On July 19, 2021, UBS Financial Services Inc. (“UBS”) and the Securities and Exchange Commission (“SEC”) settled charges related to UBS’s failure to adopt and implement written policies and procedures reasonably designed to prevent unsuitable investments in volatility-linked-exchange-traded products (“ETPs”) between January 2016 and January 2018. As a result of UBS’s supervisory failures, financial advisors in UBS’s discretionary Portfolio Management Program (“PMP”) purchased and held an exchange-traded product called iPath S&P 500 VIX Short-Term Futures ETN (“VXX”) for their advisory clients for durations that were inconsistent with the purpose of the product, as described in the offering documents, and as described to UBS in a meeting with representatives of the issuer of VXX.

Without admitting to the SEC’s findings, UBS agreed to a censure, and disgorgement and prejudgment interest of $112,274 and a civil penalty of $8 million, which will be distributed to investors harmed by UBS’s conduct.

Advisory customers of UBS who have suffered losses due to VXX investments in their discretionary or “managed” accounts that have not been made whole should contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.