SEC: Navistar International and Former CEO Misled Investors About Advanced Technology Engine

The Securities and Exchange Commission today charged Navistar International Corp. with misleading investors about its development of an advanced technology truck engine that could be certified to meet U.S. emission standards.

Navistar, without admitting or denying the charges, has reached a settlement with the SEC and agreed to pay a $7.5 million penalty.  Separately, in a complaint filed in federal court in the Northern District of Illinois, the SEC charged former Navistar CEO Daniel C. Ustian with misleading investors and with aiding and abetting violations by Lisle, Illinois-based Navistar.

The SEC alleges that Navistar and Ustian failed to fully disclose the company’s difficulties obtaining Environmental Protection Agency (EPA) certification of a truck engine able to meet stricter EPA Clean Air Act standards that took effect in 2010.  Navistar and Ustian also are alleged to have repeatedly misled investors about Navistar’s development of the engine, which used exhaust-gas-recirculation (EGR) technology.  Navistar later abandoned the effort and adopted the selective catalytic reduction (SCR) technology used by its competitors.

“When public companies and top executives discuss important regulatory developments with investors, they must tell the whole truth,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement. “Here, we allege that Navistar and its former CEO misled investors about their dealings with the EPA and the likely approval of its new emissions technology."

David Glockner, Director of the SEC’s Chicago Regional Office added, “We allege that in 2011 and 2012, the EPA repeatedly raised serious concerns with Navistar about its applications to certify an engine using EGR technology and that top Navistar officials knew the company had not succeeded in developing a commercially viable engine that would meet EPA standards.  Navistar and its then-CEO misled investors about these difficulties in numerous SEC filings, press releases, and public conference calls, and today we seek to hold them accountable for that misconduct.”

According to the SEC’s order instituting a settled administrative proceeding against Navistar:

• In early 2011, in an effort to reassure investors about its emissions control strategy, Navistar applied for certification of an engine it knew was not ready for production and sale even if the EPA certified it.  The EPA did not approve the application and by summer 2011, Navistar decided not to pursue it any longer.
• In late 2011, Navistar began preparing another application for EPA certification.  Four days after a meeting in which the EPA staff told Navistar that the proposed engine did not appear to meet the certification requirements, Navistar filed its 2011 annual report on Form 10-K, which stated that it planned to apply to have the EPA certify the engine and that it believed the engine met EPA’s certification requirements.
• After Navistar submitted a new application in early 2012, EPA staff raised  “several serious concerns” that it said would need to be resolved before it could approve the application.  Nevertheless, in a press release and filings in March 2012, Navistar characterized the application as a “milestone,” and in a conference call with analysts and investors, Ustian indicated that certification was proceeding in a typical timeframe and that Navistar could begin production on the engine in June 2012.
• In May 2012, Navistar withdrew its January 2012 application and submitted a third one incorporating changes to lower emissions at the expense of fuel economy and other engine performance features.  In a June 4, 2012 meeting, EPA staff told Navistar that it had serious concerns about this application as well and the next day informed Navistar in writing that the engine as currently designed was “unlikely” to be certified.  Despite this, Navistar’s June 2012 quarterly filing and conference call suggested that Navistar was unaware of any concerns by the EPA regarding the May 2012 application – one of several misstatements in the filing and call regarding the application.
• In July 2012, Navistar announced that it was withdrawing its application and would begin work on an engine using SCR technology.

The SEC’s investigation was conducted by Anne Graber Blazek, Amy Flaherty Hartman, Tim Stockwell, Will Saylor and Ann Tushaus, and was supervised by Robert J. Burson.  Eric Phillips and Jonathan Polish will lead the SEC’s litigation against Ustian.

SEC Press Release

Former TV Commentator Settles Penny Stock Fraud Charges

The Securities and Exchange Commission today announced that a former market analyst and TV news commentator has agreed to settle charges that he and his company fraudulently promoted a penny stock to investors.

The SEC alleges that Tobin Smith and NBT Group Inc. were paid to prepare and disseminate e-mails, online blogs, articles, and other communications touting the stock of IceWEB Inc., a data storage company.  Smith and NBT did not fully disclose their compensation to investors, who did not have the benefit of knowing that part of their pay was tied to a sustained increase in IceWEB’s share price.  The promotional material also contained false and misleading statements intended to artificially increase the trading volume and share price of IceWEB’s stock. 

Smith and NBT agreed to be barred from involvement in any future penny stock offerings and must pay disgorgement of $165,900 plus $16,893 in interest.  Smith also must pay a $75,000 penalty. 

“Smith and NBT claimed IceWEB was a ‘perfect tech stock’ in order to manipulate the market and enrich themselves with illicit stock promoter fees,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.  

According to the SEC’s complaint filed in U.S. District Court for the District of Columbia:

• Smith entered into two separate agreements on NBT’s behalf to promote IceWEB and its stock in exchange for $330,000 in cash and IceWEB stock. 
• NBT could earn incentive fees of more than $250,000 if the marketing campaigns succeeded in increasing share price.
• Smith and NBT only disclosed some of their compensation and never informed investors that they would earn incentive fees if the stock price increased above a certain amount.
• Smith and NBT falsely stated in communications to subscribers that Smith discovered IceWEB when he was “searching for a solution” to his own company’s “rapidly growing cloud data storage problem.” 
• In fact, Smith only “found” IceWEB after he was retained to promote the company.  He did not actually use IceWEB for NBT data storage.
• Smith and NBT also falsely touted that IceWEB “provides the cheapest storage box and more important the lowest cost/highest performance solution to”  public and private data storage centers including “Amazon cloud drive, Dropbox, Evernote, iCloud, Microsoft SkyDrive, Google Drive,  SugarSync” and Facebook.
• Smith did not know whether any of these companies were actually IceWEB customers.
• Smith touted he could “easily make the case” for “10X Return -- $200 million valuation” on IceWEB given “what has been already paid for its competitors.” 
• But Smith made these projections despite being well aware of IceWEB’s poor financial condition and knowing that no company was contemplating a purchase of IceWEB.  

The SEC’s complaint charges Smith and NBT with violating the anti-touting and anti-fraud provisions of Section 17(b) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.  Smith and NBT neither admitted nor denied the allegations in the settlement, which is subject to court approval. 

    

The SEC’s investigation was conducted by Yolanda Ochoa and Finola H. Manvelian and trial counsel are John Berry and Karen Matteson in the Los Angeles office. 

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SEC Investor Alert: Fraudulent Stock Promotions

SEC Press Release

SEC: Biotech Company Misled Investors About New Drug's Status With FDA

The Securities and Exchange Commission today announced fraud charges against a Massachusetts-based biotech company and three former executives for misleading investors about the company’s efforts to obtain Food and Drug Administration (FDA) approval for its flagship developmental drug to treat kidney cancer.

The SEC alleges that AVEO Pharmaceuticals Inc. concealed the FDA’s level of concern about Tivozanib in public statements to investors by omitting the critical fact that FDA staff had recommended a second clinical trial to address their concerns about patient death rates during the first clinical trial.  When the FDA made public months later that it had recommended an additional clinical trial, the company’s stock price declined 31 percent.  AVEO never conducted an additional trial, and the FDA later refused to approve Tivozanib.

AVEO agreed to pay a $4 million penalty to settle the SEC’s charges without admitting or denying the allegations in the complaint filed today in federal court in Boston.  The SEC’s case continues against three of the company’s former officers: CEO Tuan Ha-Ngoc, chief financial officer David Johnston, and chief medical officer William Slichenmyer.

“We allege that AVEO and its executives hid from investors the reality of their communications with the FDA on Tivozanib while suggesting they had identified a simpler route to FDA approval,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office. “Companies must be forthcoming about their communications with regulators so investors can make informed investment decisions while knowing what challenges may lay ahead.”

According to the SEC’s complaint:

• AVEO raised $53 million in a public offering of its stock in January 2013 while failing to disclose that the FDA staff had explicitly recommended during a May 2012 meeting that AVEO conduct an additional clinical trial for Tivozanib. 
• AVEO and its officers understood that the FDA’s concerns were serious and an additional clinical trial is an expensive and time-consuming proposition.  While AVEO went so far as to design a second trial and present trial designs to the FDA, it was never conducted. 
• In corporate communications, AVEO and its officers suggested that they intended to satisfy the FDA by presenting new analyses of the data that had been gathered in the previous clinical trial.  In doing so, AVEO concealed the FDA staff’s level of concern about Tivozanib’s impact on patient survival and the recommendation that AVEO conduct a second clinical trial.
• Ha-Ngoc and Johnston knowingly approved and certified a press release and public filings that failed to disclose the FDA staff’s recommendation for an additional clinical trial. 
• Johnston also made public statements during investor conferences suggesting the FDA staff had asked only for an explanation of the survival results.  In reality, the FDA staff had recommended a second trial. 
• Slichenmyer misled investors in an investor conference call when he falsely stated he could not “speculate” on what the FDA “might be thinking” and “might want [AVEO] to do in the future.”  He actually knew that the FDA staff had recommended an additional trial.

The SEC’s complaint charges AVEO, Ha-Ngoc, Johnston, and Slichenmyer with violations of the antifraud provisions of the federal securities laws and various other violations.  The settlement with AVEO is subject to court approval.  The SEC is seeking disgorgement plus interest and penalties, permanent injunctions, and officer-and-director bars against Ha-Ngoc, Johnston, and Slichenmyer.

The SEC’s investigation was conducted by Susan Cooke Anderson and Michele T. Perillo of the Enforcement Division’s Market Abuse Unit in the Boston Regional Office.  The SEC’s litigation will be led by Rachel E. Hershfang and Ms. Anderson.

SEC Press Release

SEC Halts Fraud by Manager of Investments in Pre-IPO Companies

The Securities and Exchange Commission today announced fraud charges and asset freezes obtained in a case filed against a New Jersey-based fund manager and two firms he controls that marketed shares in promising pre-IPO tech companies in the Bay Area. The SEC alleges they stole $5.7 million from investors and diverted millions more to other improper and undisclosed uses.

Specifically, the SEC alleges that John Bivona used money raised through Saddle River Advisors and SRA Management Associates to pay off earlier investors, prop up other funds, and pay family-related expenses.  He secretly steered the lion’s share of misappropriated funds to his nephew Frank Mazzola, who was barred from the securities industry in a prior SEC enforcement action and is charged along with Bivona and his firms in the complaint filed Monday in federal district court in California.

“We allege that Bivona preyed on investors seeking to invest in popular pre-IPO technology companies and hid the scheme by avoiding outside reviews of the funds and depriving investors of financial statements despite promises to do so,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office.

According to the SEC’s complaint:

• Bivona raised more than $53 million from investors, and the money he was siphoning away for undisclosed uses left his firms continuously short of the cash needed to buy the shares promised to investors.
• Bivona kept the scheme going by indiscriminately transferring money among more than a dozen bank accounts associated with an array of different entities. 
• Bivona used investor money to pay Mazzola’s credit card bills, income taxes, a car loan, attorney fees, and the mortgage on a Jersey Shore vacation home.
• Investors were told they would receive financial statements for the funds on an annual basis.  But no financial statements were ever prepared.
• Bivona and Mazzola failed to register the offering with the SEC and thereby violated the bad actor rules of the federal securities laws, which prohibit companies from relying on registration exemptions under Rule 506 of Regulation D if a promoter or investment manager like Mazzola has a disqualifying event like his fraud-based injunction.

Investors can learn more about the risks involved with investing in unregistered offerings by reading such SEC investor bulletins as 10 Red Flags That An Unregistered Offering May Be A Scam and Private Placements Under Regulation D.

The SEC’s complaint seeks permanent injunctions plus disgorgement with prejudgment interest and monetary penalties from Bivona and the firms as well as Mazzola. The SEC obtained a court order to freeze the assets of Frank Mazzola and his wife, a relief defendant, and ordering the appointment of an independent monitor over Saddle River Advisors, SRA Management, the SRA Funds, and other affiliated entities. The order also preliminarily enjoins Bivona, Saddle River Advisors, and SRA Management from violating the antifraud provisions of the federal securities laws and raising money from investors.

The SEC’s investigation was conducted by Jessica W. Chan and Ellen Chen of the San Francisco office, and the case was supervised by Jeremy E. Pendrey.  The SEC’s litigation will be led by John Yun, Marc Katz, and Ms. Chan.

SEC Press Release

SEC Charges Microcap Company CEO for Touting Bogus “Clean Energy” Contracts With Foreign Governments

The Securities and Exchange Commission today charged a microcap company CEO for falsely claiming to have a lucrative relationship with the United Nations and billions of dollars in clean energy contracts with foreign governments.  

The SEC alleges that RVPlus Inc. CEO Cary Lee Peterson made bogus claims in the company’s public filings and in statements to private investors, and that he and RVPlus participated in an unlawful distribution of RVPlus’s stock.  The SEC temporarily suspended trading in RVPlus securities in July 2013, citing “material deficiencies” in the company’s financial statements.  

“We allege that Peterson inflated RVPlus’s finances and expected profitability,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.  “We also allege that using a pseudonym, he posted hundreds of messages to an online investors’ forum calling RVPlus stock ‘undervalued,” and urging investors to ‘buy up as much as possible.’”

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Peterson. 

According to the SEC’s complaint filed in U.S. District Court for the District of New Jersey:

• Starting in May 2012, Peterson filed periodic reports with the SEC claiming that RVPlus had a lucrative relationship with the United Nations and clean energy agreements with governmental bodies in Nigeria, Haiti, and Liberia worth $2.8 billion.  RVPlus had no relationship with the U.N. and the contracts were fictitious.
• Peterson repeatedly claimed in RVPlus’s SEC filings that RVPlus had issued invoices and was owed millions of dollars in accounts receivable on the bogus contracts.
• RVPlus and Peterson gained control of more than 90 percent of RVPlus’s free trading shares and gave them to individuals who unlawfully sold them into the market.

The SEC’s complaint charges RVPlus and Peterson with violating the antifraud provisions of the securities laws and an SEC antifraud rule.  It also charges RVPlus and Peterson with violating the registration provisions of the securities laws and Peterson with aiding and abetting RVPlus’s violations of the antifraud provisions.  The SEC is seeking a permanent injunction, return of allegedly ill-gotten gains with interest, and penalties.  In addition, it is seeking to bar Peterson from serving as a corporate officer or director and from participating in the penny-stock business.

The SEC’s investigation was conducted by Megan R. Genet, Bennett Ellenbogen, Jordan Baker, and Adam Grace of the New York office.  The SEC’s litigation will be led by Preethi Krishnamurthy and supervised by Lara Shalov Mehraban.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of New Jersey, the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, and the British Columbia Securities Commission.

SEC Press Release

SEC: California Businessman Attempted Cover Up of Stolen Investor Funds

The Securities and Exchange Commission today announced fraud charges against a California businessman accused of stealing investor assets and then trying to cover it up once the SEC caught onto his scheme.

The SEC alleges that Daniel R. Nase raised money from investors through an unregistered offering of common stock in his Bakersfield, California-based company, BIC Real Estate Development Corp., and used the funds for personal expenses.  According to the SEC’s complaint filed in U.S. District Court for the Eastern District of California:

• Nase told investors that BIC would invest in real estate and promissory notes.  With money he used to purchase real estate and notes, Nase improperly titled most of the properties in his name or his wife’s name or their family trust, not BIC.
• Nase used some investor funds to pay for clothing, vacations, student loans, and other personal expenses.
• Nase tried to cover up his theft after learning of the SEC’s investigation by investing stolen assets back into the company to make it appear he was increasing his equity stake in it.

Nase was not registered with the SEC or any state regulator to sell investments.  Investors can quickly and easily check whether people selling investments are registered by using the SEC’s investor.gov website.  

“Those raising money for a business venture must use it as promised and not to simply enrich themselves,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.  “As alleged in our complaint, time and again Nase used investor funds for an illicit personal benefit.”

The SEC’s complaint charges Nase and BIC with violating federal antifraud laws and rules and securities registration provisions.  The complaint seeks emergency relief in the form of a temporary restraining order, asset freeze, and a preliminary injunction.  It also seeks return of allegedly ill-gotten gains along with interest, penalties, and permanent injunctions and other relief against Nase and BIC.

The SEC’s investigation was conducted by Manuel Vazquez, Matthew Montgomery, Roger Boudreau, and Robert Conrrad, and the litigation will be led by John Berry, John Bulgozdy, Mr. Vazquez, and Mr. Montgomery.  

SEC Press Release

SEC Charges Company and Executives for Faulty Evaluations of Internal Controls

The Securities and Exchange Commission has settled charges against Texas-based oil company Magnum Hunter Resources Corporation and several individuals, including a company consultant, for deficient evaluation of the company’s internal controls over financial reporting, and failures to maintain internal control over financial reporting between Dec. 31, 2011 and Sept. 30, 2013. 

Internal control over financial reporting (ICFR) refers to a company’s process for providing reasonable assurance to the public regarding the reliability of its financial reporting.  SEC rules require company management to evaluate and annually report on the effectiveness of ICFR, including disclosing any identified material weaknesses that creates a reasonable possibility that the company will not timely prevent or detect a material misstatement of its financial statements.  Management may not conclude ICFR is effective if a material weakness exists.

The SEC alleges that MHR and two senior officers – former CFO Ronald Ormand and former chief accounting officer David Krueger – failed to properly evaluate and apply applicable ICFR standards and improperly concluded that MHR had no material weaknesses.  The SEC also charged former MHR consultant Joseph Allred, and former MHR audit engagement partner Wayne Gray, with improperly evaluating the severity of MHR’s internal control deficiencies and misapplying relevant standards for assessing deficiencies and material weaknesses.  Accordingly, the public was not told that MHR had a material weakness in its ICFR.

According to the SEC’s orders:

• MHR’s rapid growth, which included multiples of revenue growth in 2010 and significant acquisitions in 2010 and 2011, strained its accounting resources.  The acquisition and revenue growth caused Magnum Hunter to be unable to complete its standard monthly close process on time.
• Ronald Ormand and David Krueger knew of the stresses placed on Magnum Hunter’s accounting department as a result of its rapid growth.  Nonetheless, they failed to apply appropriate standards when determining the severity of MHR’s internal control deficiency.
• Joseph Allred, a partner at a PCAOB-registered public accounting firm that provided consulting and internal auditing services to Magnum Hunter, led consulting engagements to document and test Magnum Hunter’s controls and identified problems in the company’s accounting department that exhibited “inadequate and inappropriately aligned staffing.”  These problems caused delays in Allred’s testing. 
• Despite identified problems, and his belief that “[t]he potential for error in such a compressed work environment presents substantial risk,” Allred concluded that the staffing deficiency in the company’s accounting department did not rise to the level of a material weakness.
• Wayne Gray, an engagement partner at a PCAOB-registered public accounting firm that served as Magnum Hunter’s independent auditor, recognized during his audit that MHR lacked “adequate internal control over financial reporting due to inadequate and inappropriately aligned staffing” which “increases the possibility of a material error occurring and being undetected.”  Despite this assessment, Gray concluded that the weakness did not rise to the level of material weakness and failed to adequately document the basis for his conclusion.

“Effective internal controls are a critical safeguard against false and inaccurate information that may harm shareholders,” said Shamoil T. Shipchandler, Director for the SEC’s Fort Worth Regional Office.  “This action emphasizes that all those involved in ICFR assessments – companies, management, external auditors and consultants – must take their responsibilities seriously and rigorously assess controls, including those over financial reporting.”

Without admitting or denying the findings in the cease-and-desist orders covering various reporting and internal control provisions of the federal securities laws, MHR agreed to pay a penalty of $250,000 subject to bankruptcy court approval, Ormand and Allred agreed to pay penalties of $25,000 and $15,000 respectively, and Krueger and Gray agreed to be suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.  The SEC’s order permits them to apply for reinstatement after one year.

The SEC’s investigation was conducted by David Whipple, David King, and Chris Davis and supervised by Jessica Magee and David Peavler of the Fort Worth office.

SEC Press Release

SEC: Tech Company Misled Investors About Key Product

The Securities and Exchange Commission today announced that a developer of technologies for touchscreen devices has agreed to pay $750,000 to settle charges that it misled investors about the production status and sales agreements for a key product.

Two former company executives face related charges in an SEC complaint filed today in U.S. District Court for the Southern District of Texas.  The SEC entered into a deferred prosecution agreement with the company’s former chairman of the board, who has agreed to cooperate and be barred from serving as an officer and director for five years.

The SEC alleges that Uni-Pixel Inc. began publicly touting sales of a touchscreen sensor product supposedly in speedy high-volume commercial production when in fact only a few samples had been manually completed.  The misrepresentations caused Uni-Pixel’s stock price to more than double, enabling then-CEO Reed Killion and then-CFO Jeffrey Tomz to make more than $2 million in personal profits from selling their own shares of company stock.  Killion and Tomz allegedly knew the company’s statements were untrue and Uni-Pixel’s manufacturing process was still incapable of mass producing commercial quantities of sensors.

“We allege that Uni-Pixel and top executives portrayed a company whose technology had arrived when in truth it was still in the developmental stage,” said Shamoil T. Shipchandler, Director of the SEC’s Fort Worth Regional Office.  “Tech companies and their officers must be honest with investors about the state of their products and cannot portray them as something they are not.”

According to the SEC’s complaint:

• Uni-Pixel announced “multi-million dollar” sales agreements in 2012 and 2013 that highlighted potential revenues but omitted material conditions the company had to meet to actually receive those revenues.
• Uni-Pixel announced in April 2013 that its high-volume production line was “qualified and production ready” and its capacity “started at fifty moving to hundreds and then thousands over the next several months.”  At the time, Uni-Pixel had yet to produce any functional sensors through its high-speed process.
• Uni-Pixel issued a press release in November 2013 touting a “purchase order” for its sensors that expected to ship an initial “commercial run” of sensors by year-end.  The company concealed that the order was for a mere $10 worth of sensors for the customer to review as samples.

Without admitting or denying the SEC’s charges, Uni-Pixel consented to entry of a final judgment permanently enjoining it from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), and 13(b) of the Securities and Exchange Act of 1934 as well as Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13.  The settlement is subject to court approval.  The SEC’s litigation continues against Killion and Tomz.

The deferred prosecution agreement with former board chairman Bernard T. Marren alleges that he became aware that information in Uni-Pixel’s press releases was inaccurate but failed to ensure that the company corrected the releases.  The agreement requires him to cooperate with the SEC’s continuing case while complying with certain undertakings in order to avoid civil charges against him. 

The SEC’s investigation was conducted by David Whipple, Carol Hahn, and David King, and the case was supervised by Jessica Magee in the SEC’s Fort Worth Regional Office.  The SEC’s litigation will be led by Matt Gulde.

SEC Press Release

Insider Traders Returning Illegal Profits and Kickbacks

The Securities and Exchange Commission today announced that a Florida man trading on inside information ahead of a pharmaceutical company merger and a friend who tipped him have agreed to settle enforcement actions against them.

Jay Y. Fung has agreed to pay back more than $700,000 in illegal profits plus more than $60,000 in interest earned after allegedly purchasing stock and call options in Pharmasset Inc. based on his friend’s tip that it was about to be acquired.  The SEC alleges that Fung cashed in when Pharmasset’s stock rose 84 percent after its acquisition by Gilead Sciences was publicly announced, and he paid kickbacks to his friend who provided the nonpublic information. 

The SEC filed a complaint against Fung today in federal district court in Newark, N.J., and the U.S. Attorney’s Office for the District of New Jersey today announced parallel criminal charges.

The SEC previously charged Fung’s friend and tipper Kevin Dowd, who learned the nonpublic information during his employment at an investment advisory firm where a Pharmasset board member maintained an account and confidentially sought financial advice in advance of the acquisition.  Dowd has since cooperated with the SEC’s investigation and agreed to pay back the cash kickbacks he received from Fung and be barred from the securities industry and penny stock offerings.  Dowd also pleaded guilty in a parallel criminal case.

“SEC enforcement staff continue to develop and refine analytical tools to uncover illicit trading activity and hold accountable those abusing the markets for their own financial gain,” said Joseph G. Sansone, Co-Chief of the SEC’s Market Abuse Unit, which has an Analysis and Detection Center dedicated to crunching trading data to identify suspicious trading patterns.   

The SEC’s settlements with Fung and Dowd are subject to court approval. 

The SEC’s investigation was conducted by Paul T. Chryssikos and Scott A. Thompson of the Market Abuse Unit and the Philadelphia Regional Office with assistance from John Rymas in the Analysis and Detection Center and Christopher R. Kelly of the Philadelphia office.  The investigation was supervised by Mr. Sansone.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of New Jersey and the Federal Bureau of Investigation.  

SEC Press Release