Corporate Fraud Team

Fraud Charges Filed Against US Company in Multimillion Dollar Retirement Account Scheme

Avatar photo
Brad Fulton

Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week, a U.S. company is charged in a multimillion-dollar fraud scheme. Read the full story and more news below:

Top Story

Fraud Charges Filed Against US Company in Multimillion Dollar Retirement Account Scheme

The Securities and Exchange Commission (SEC) this week announced charges against Safeguard Metals LLC, and its owner, Jeffrey Santulan, for a multimillion dollar retirement fraud scheme involving hundreds of investors. According to the SEC’s filed complaint, Safeguard Metals posed as investment advisers, persuading hundreds of individuals to transfer funds from existing securities accounts and invest in gold and silver coins. Safeguard took in more than USD 67M in funds from mostly elderly and nearing retirement age investors, and kept more than USD 25M in markups on the securities. The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains, plus interest, and civil penalties.

Government

Canada, US, UK Impose Sanctions Against Myanmar Top Officials

One year after a deadly military coup in Myanmar, Canada, the United States, and the United Kingdom have applied sanctions against senior officials in Myanmar. The countries allege that these officials undermined democracy and violated human rights when the military-endorsed USDP party contested a landslide victory by the NLD. More than 1,500 people were killed by the regime that launched the coup.

New French Bill to Strengthen Whistleblower Protections

A French bill aiming to strengthen whistleblower protections was reviewed this Tuesday by a joint commission at the French National Assembly. The author of the proposed bill, Sylvain Waserman, described it as the law that best protects whistleblowers across Europe. The proposed bill goes beyond the requirements imposed by the EU Whistleblower Protection Directive and complements the French Sapin 2 law passed in 2018. The National Assembly is due to vote on the final version of the bill before it’s passed into law.

South Korea Calls on Improved App Store Compliance from Apple, Google

Telecommunications regulators in South Korea are seeking compliance plans from Apple and Alphabet (Google’s parent company) relating to a law passed in the country that bars app store operators from forcing consumers to use their unique, gated payment systems. Apple and Alphabet will now need to provide contingency plans for users that choose to use alternative payment methods before the bill takes effect. Prior to the law’s passing, app developers were forced to pay commissions to the app stores themselves on app purchases and in-app microtransactions. 

Business

TikTok Expands Compliance Function with New Panasonic Executive Hire

Catherine Razzano, a senior executive from Panasonic Corp. will help to expand the compliance function for the social media giant TikTok. Her position, as well as several other new compliance and legal positions in TikTok’s U.S.-based legal team, will help TikTok navigate the scrutiny faced over the alleged security risks and allegations of psychological harm to young users posed by the app.

Former Compliance Officer Ordered to Pay Millions in Unauthorized Trading Scheme

Michael Leahy, former compliance officer of the now-defunct brokerage firm First Standard Financial Company, has been ordered to pay USD 2.8M for his involvement in a trading scheme that resulted in nearly USD 2M in losses for the firms investors. Leahy, who served as the chief compliance officer, took part in supervisory duties which included reviewing the firm’s daily trades after a mass exodus of employees. It was during this time that Leahy regularly “engaged in a pattern of unauthorized trading, using margin without authorization, recommending excessive and otherwise unsuitable transactions, and charging excessive commissions in dozens of customer accounts,” according to Financial Industry Regulatory Agency officials.