Former Iconix CEO Neil Cole Convicted of Accounting Fraud

Former CEO Of Iconix Brand Group Convicted At Trial Of Accounting Fraud

Damian Williams, the United States Attorney for the Southern District of New York, announced earlier today that a federal jury found NEIL COLE, the former Chief Executive Officer of Iconix Brand Group, Inc. (“Iconix”), guilty of participating in a scheme to fraudulently inflate Iconix’s revenue and earnings per share, making false filings with the U.S. Securities and Exchange Commission (“SEC”), and misleading the conduct of audits.  The defendant was found guilty following a four-week retrial before U.S. District Judge Edgardo Ramos.  Sentencing has not yet been scheduled.

Wall Street Whistleblowers Tip Off SEC — But Hear Nothing Back

Janice Shell likes to sniff out fraud. An art historian by training, she once spent her days digging through Renaissance archives in Italy. Now 74, retired and living in suburban Philadelphia, she pores over financial filings instead. She hunts for sketchy penny stocks, then flags them in tart commentaries on message boards such as Investorshub.com. Shell has been remarkably prescient. In several cases, the US Securities and Exchange Commission later sanctioned companies she’d called out—and for the same reasons.

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The SEC runs a whistleblower program that would seem perfect for Shell. If investigators bring a successful case based on information sent their way, the informant can keep 10% to 30% of any money recovered as a reward. Over the years, Shell figures she’s sent in a dozen tips. But she stopped about seven years ago, because she never heard back. “It’s such a nuisance when you know they aren’t going to get to it this year—and maybe not ever,” she says.

Her gripe is typical of those who alert the SEC…. Out of 60,000 tips sent its way, fewer than 300 have resulted in awards.

SEC Awards $20 Million to Whistleblower

The Securities and Exchange Commission today announced an award of $20 million to a whistleblower who provided new and critical information that led to the success of an enforcement action.

In determining the appropriate award amount, the SEC considered that the whistleblower provided significant information and continuing assistance that helped Enforcement Division staff more quickly and efficiently investigate complex issues.

BlockFi Bankruptcy Filing Shows It Owes $30 Million to US SECAt a time when Tesla shares were on a massive upswing, Musk had written in a tweet The US Securities and Exchange Commission is one of the largest creditors to BlockFi, which filed for bankruptcy in the wake of a number of failures within the digital-assets space.

The regulator has a $30 million unsecured claim against the crypto lender, according to a filing Monday. That makes it BlockFi’s fourth-biggest creditor, behind Ankura Trust Company, which is listed as being owed more than $729 million; West Realm Shires Inc., which is the entity that operates FTX US and which is owed $275 million; as well as an unnamed customer due more than $48 million.

U.S. Crypto Exchange Kraken Settles With Treasury Dept.

Kraken, a U.S. cryptocurrency exchange, agreed on Monday to pay more than $360,000 to the Treasury Department to settle accusations of sanctions violations involving virtual currency transactions by users in Iran.

The Treasury Department’s Office of Foreign Assets Control said Kraken, the second-largest crypto exchange by volume in the United States, had agreed to a settlement for enabling nearly $1.7 million of transactions to individuals who appeared to be in Iran between October 2015 and June 2019. The United States imposed sanctions against Iran in 1979, prohibiting the export of goods or services to people or entities in the country.

In its statement, the office said the maximum civil monetary penalty for the violations could be more than $270 million but determined that the settlement would be much less because Kraken had reported the potential violations. In addition, the company agreed to spend an additional $100,000 on new compliance controls.

Regulating Crypto Not a ‘One-Agency Solution,’ CFTC Commissioner Says

When the day comes, it’s unlikely crypto will be regulated by just one government agency, said Summer K. Mersinger, a commissioner at the Commodity Futures Trading Commission (CFTC).

“It’s not going to be just a one-agency solution,” she said Monday on CoinDesk TV’s “All About Bitcoin” when asked about the regulatory ramifications for crypto from the bankruptcy filings of FTX and BlockFi.

“We probably need to work a little more closely with the [Securities and Exchange Commission],” Mersinger said. That collaboration would likely mean the CFTC would also receive more congressional oversight. The Agriculture committees in the House of Representatives and the Senate already oversee CFTC. The House Financial Services Committee and the Senate Banking Committee oversee the SEC.

Criminal Insider Trading in Personal Networks

This Article describes and comments on criminal insider trading prosecutions brought over an eleven-year period. The core common element among these cases is that they all involve alleged tipper/tippee insider trading or misappropriation insider trading implicating information transfers between or among friends or family members (rather than merely business connections). The ultimate objectives of the Article are to explain and comment on the nature of these criminal friends-and-family insider trading cases and to posit reasons why friends and family become involved in criminal tipping and misappropriation–conduct that puts both the individual friends and family members and the relationships between and among them at risk.