SEC Prevails in Nine-Day Jury Trial in SDNY

Statement on Jury’s Verdict in Trial of Steven M. Gallagher

Today, after a nine-day trial and fewer than four hours of deliberation, a jury in the United States District Court for the Southern District of New York found defendant Steven M. Gallagher liable for securities fraud and manipulative trading. As demonstrated at trial, between December 2019 and October 2021, Gallagher used his Twitter account to encourage his numerous followers, including many retail investors, to buy stocks in which Gallagher had already amassed holdings. Gallagher then sold those stocks while he continued to recommend others buy them, never disclosing that he was selling the stocks. Gallagher repeated this pattern with over 30 microcap stocks, making illicit trading profits of over $2.6 million. For two of these stocks, Gallagher was also found to have engaged in manipulative trading by “marking the close” – a strategy involving placing end-of-day orders to buy stock at above-market prices to artificially increase the stock’s price.

Praetorian Group International CEO pleads guilty to $200M bitcoin Ponzi scheme

The Chief Executive Officer of a multi-level marketing and bitcoin trading firm pled guilty yesterday to wire fraud and money laundering for operating a Ponzi scheme that defrauded over 90,000 investors worldwide.

According to court documents, Ramil Ventura Palafox, 60, a dual citizen of the United States and the Philippines, owned and operated Praetorian Group International (PGI) and served as PGI’s Chairman, Chief Executive Officer, and chief promoter. Palafox falsely claimed that PGI was engaged in bitcoin trading, and he promised daily returns of 0.5 to 3%. PGI was not trading bitcoin at a scale capable of making the promised returns, however, and Palafox was paying the investors back with their own money or with funds received from other investors.

From December 2019 to October 2021, at least 90,000 investors worldwide invested more than $201,000,000 in PGI, including at least $30,295,289 in fiat currency and at least 8,198 bitcoin worth $171,498,528. As a result of Palafox’s actions, investors suffered losses totaling at least $62,692,007.

Kevin Durant Recovers Bitcoin Bought at $650, Now Up Over 17,700%, After Nearly a Decade

NBA forward Kevin Durant has access to his bitcoin again, after being locked out of his Coinbase account for nearly a decade. In that time, the price of BTC rose by more than 17,700%.

“We got this fixed. Account recovery complete,” Coinbase CEO Brian Armstrong posted on X, responding to a viral tweet about Durant’s access issues.

The recovery comes days after Durant and his business partner, Rich Kleiman, discussed the lockout at CNBC’s Game Plan conference. “It’s just a process we haven’t been able to figure out,” Kleiman said. Still, he noted, “bitcoin keeps going up… so, I mean, it’s only benefited us.”

Durant bought bitcoin in 2016 after hearing about it from then-teammates on the Golden State Warriors. At the time, bitcoin traded between $360 and $1,000 and Durant is estimated to have bought at around $650 per coin.

Binance-Linked Token Hits Record With Spotlight on Zhao Pardon

A cryptocurrency with ties to Binance Holdings Ltd. struck an all-time high as speculation builds that the digital-asset exchange’s co-founder Changpeng Zhao will be granted a US presidential pardon.

The BNB token, the fifth-largest by market value, surged over the weekend to reach $1,083 on Sunday, according to data compiled by Bloomberg. BNB retreated on Monday alongside Bitcoin and Ether in a broad market selloff.

The record came against a backdrop of heightened expectations that Zhao will receive a pardon from US President Donald Trump….

SEC Ditches Allen Stanford Controller Case After Biden Reprieve

The US Securities and Exchange Commission is dropping its 16-year-old case against an executive convicted of aiding R. Allen Stanford’s $7 billion Ponzi scheme after former President Joe Biden cut short his prison term.

The agency moved Thursday to end its civil case against Mark Kuhrt, who had served as Stanford’s controller and was found guilty of fraud by a jury in Houston in 2012 and sentenced to 20 years in prison. The regulator has abandoned a string of lawsuits since President Donald Trump took office.

As part of Biden’s clemency action for some 1,500 convicted criminals weeks before he left the White House, he commuted Kuhrt’s sentence in December, as well as the 20-year term handed down to Stanford’s former chief accounting officer, Gilbert Lopez.