The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
February 20, 2020
SEC Charges Global Alcohol Producer with Disclosure Failures (SEC Release)ICO Issuer Settles SEC Registration Charges, Agrees to Return Funds and Register Tokens As Securities (SEC Release)
Former Dunbar Armored Supervisor Sentenced to 2 Years in Prison for Stealing Almost $300,000 from Company's Cash Storage Vault (DOJ Release)
https://www.justice.gov/usao-cdca/pr/former-dunbar-armored-supervisor-sentenced-2-years-prison-stealing-almost-300000
https://www.justice.gov/usao-cdca/pr/former-dunbar-armored-supervisor-sentenced-2-years-prison-stealing-almost-300000
Eric Miranda, 39, pled guilty in the United States District Court for the Central District of California to one count of conspiracy to commit bank theft and three counts of bank theft; and he was sentenced to 24 months in prison and ordered to pay $279,369 in restitution. Now I don't want to make Miranda into some folk hero but, hey, ya gotta give the guy some credit for his ingenuity, no? I mean consider the caper that he concocted:
At the time of the theft, Miranda was a Dunbar Armored supervisor with access privilege to company vaults. He stole cash from the Dunbar vault by using "dummy" stacks of $100 bills that he switched out for real stacks of $100,000. First, Miranda created "dummy" stacks of $100,000 by taking hundreds of $1 bills and sandwiching them between $100 bills - in order to make them appear to be stacks of $100 bills totaling $100,000.He then smuggled the "dummy" stacks into the Dunbar vault, where he and his co-conspirator, Monique Castruita, 36, of Maywood, switched them for real stacks of $100,000. Miranda and Castruita then marked the dummy stacks to ensure they were not placed into circulation.Finally, Miranda smuggled the real stacks of money out of the vault room by hiding it in a postal box. On three occasions between October 2017 and January 2018, Miranda smuggled a total of approximately $300,000 out of the Dunbar facility.In March 2018, defendant's scheme was finally exposed when a Dunbar employee discovered 19 empty money straps in the trash can of a women's restroom. Ultimately, the loss to Dunbar totaled $279,369.Castruita pleaded guilty in November 2018 to one count of conspiracy to commit bank theft and three counts of bank theft. Her sentencing hearing is scheduled for April 29.
SEC Charges Global Alcohol Producer with Disclosure Failures (SEC Release)
https://www.sec.gov/news/press-release/2020-36
https://www.sec.gov/news/press-release/2020-36
Without admitting or denying the findings in an SEC Order
https://www.sec.gov/litigation/admin/2020/33-10756.pdf, Diageo plc agreed to cease and desist from further violations and to pay a $5 million penalty. The Order alleged that Diageo violated the antifraud provisions of Section 17(a)(2) and (3) of the Securities Act, as well as certain reporting provisions of the federal securities laws. As alleged in part in the SEC Release:
https://www.sec.gov/litigation/admin/2020/33-10756.pdf, Diageo plc agreed to cease and desist from further violations and to pay a $5 million penalty. The Order alleged that Diageo violated the antifraud provisions of Section 17(a)(2) and (3) of the Securities Act, as well as certain reporting provisions of the federal securities laws. As alleged in part in the SEC Release:
[E]mployees at Diageo North America (DNA), Diageo's largest and most profitable subsidiary, pressured distributors to buy products in excess of demand in order to meet internal sales targets in the face of declining market conditions. The resulting increase in shipments enabled Diageo to meet performance targets and to report higher growth in key performance indicators that were closely followed by investors and analysts. The order finds that Diageo failed to disclose the trends that resulted from shipping products in excess of demand, the positive impact the overshipping had on sales and profits, and the negative impact that the unnecessary increase in inventory would have on future growth. The order further finds that investors were instead left with the misleading impression that Diageo and DNA were able to achieve growth in certain key performance indicators through normal customer demand for Diageo's products.
ICO Issuer Settles SEC Registration Charges, Agrees to Return Funds and Register Tokens As Securities (SEC Release)
https://www.sec.gov/news/press-release/2020-37
Without admitting or denying the findings in an SEC Order
https://www.sec.gov/litigation/admin/2020/33-10755.pdf, blockchain technology startup Enigma MPC agreed to cease and desist from committing or causing any violations of the registration provisions of the federal securities laws and will pay a $500,000 penalty. Further, Enigma agreed to a claims process whereby it will return funds to investors who purchased ICO tokens; and the company will register its ENG Tokens as securities and file periodic reports with the SEC. As alleged in part in the SEC Release:
https://www.sec.gov/news/press-release/2020-37
Without admitting or denying the findings in an SEC Order
https://www.sec.gov/litigation/admin/2020/33-10755.pdf, blockchain technology startup Enigma MPC agreed to cease and desist from committing or causing any violations of the registration provisions of the federal securities laws and will pay a $500,000 penalty. Further, Enigma agreed to a claims process whereby it will return funds to investors who purchased ICO tokens; and the company will register its ENG Tokens as securities and file periodic reports with the SEC. As alleged in part in the SEC Release:
[E]nigma raised approximately $45 million from sales of its digital assets (called ENG Tokens) in 2017. The SEC's order finds that ENG Tokens are securities and that Enigma did not register its ICO as a securities offering pursuant to the federal securities laws and its ICO did not qualify for an exemption from the registration requirements.
[In]Securities Guest Blog: Something Built to Last by Aegis Frumento Esq (BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/5075/aegis-frumento-insecurities/
As Wall Street lawyer Aegis Frumento sees it, we don't really understand why we don't like insider trading as a thing in itself. Also, Frumento notes that any insider trading statute can be gamed, and the more precise it is drafted, the more loopholes it creates. Which may explain the Houston Astros' approach to winning a World Series.