Article: Cryptocurrency Fraudster Sentenced To 15 Years For Money Laundering And Securities Fraud In Multi-Million Dollar Investment Scheme

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Cryptocurrency Fraudster Sentenced To 15 Years For Money Laundering And Securities Fraud In Multi-Million Dollar Investment Scheme

Department of Justice, 09 July 2021

SAN FRANCISCO – Roger Nils-Jonas Karlsson, citizen of Sweden, was sentenced today to 15 years in prison for securities fraud, wire fraud, and money laundering charges that defrauded thousands of victims. The court also ordered the defendant to forfeit several properties in Thailand, including a resort, and a forfeiture money judgment of more than $16 million. The sentence was handed down by the Hon. Charles R. Breyer, U.S. District Judge.

Karlsson, 47, pleaded guilty to the charges on March 4, 2021, without a written plea agreement. According to court documents, Karlsson ran an investment fraud scheme from 2011 until his arrest in Thailand in June 2019. Karlsson induced victims to use cryptocurrency such a Bitcoin and other online payment platforms to purchase shares in a scheme he called “Eastern Metal Securities.” Karlsson promised victims astronomical returns tied to the price of gold. Instead, the funds provided by victims were transferred to Karlsson’s personal bank accounts, and he then used proceeds to purchase personal items including expensive homes, a racehorse, and a resort in Thailand. Karlsson’s fraud targeted financially insecure investors, causing severe financial hardship for many of them. Meanwhile, Karlsson went to great lengths to prolong his scheme, including rebranding, offering updates and account statements that provided assurances to the victims that their assets were secure, and offering explanations for the payout delays – including falsely claiming to be working with the Securities and Exchange Commission. In addition, the government’s filings in the case describe Karlsson’s attempt to launder the proceeds of his fraud by using multiple aliases and shell companies, layering transactions through cryptocurrency wallets and exchanges, and using offshore accounts and properties. The government argued in its sentencing memorandum that Karlsson’s cryptocurrency Ponzi scheme is one of the largest such schemes the government knows to have been sentenced. Continue reading “Article: Cryptocurrency Fraudster Sentenced To 15 Years For Money Laundering And Securities Fraud In Multi-Million Dollar Investment Scheme”

Article: Pension Fund Drops Suit Against Tesla Over $1.8B Bond Offer

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Pension Fund Drops Suit Against Tesla Over $1.8B Bond Offer

Rachel Stone, 16 April 2021

A pension fund voluntarily ended its proposed class action against Tesla and its multibillionaire founder, Elon Musk, which claimed the automaker and a group of big banks acting as underwriters misled investors on a $1.8 billion bond offering.

Inter-Local Pension Fund GCC/IBT has bowed out of its securities fraud suit in California federal court following a decision in the Ninth Circuit in March not to rehear a related case, according to a notice filed Thursday. Continue reading “Article: Pension Fund Drops Suit Against Tesla Over $1.8B Bond Offer”

Article: Bay Area oil company executive charged with market manipulation

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Bay Area oil company executive charged with market manipulation

NATE GARTRELL, 22 March 2021

SAN FRANCISCO — Federal prosecutors in the Bay Area have charged a local resident with conspiracy to manipulate the oil market, a crime that prosecutors say was committed while he was a vice president at an oil company.

Emilio Collado, aka Emilio Heredia, was charged earlier this month with a single count of conspiracy. The charging records allege that since 1998, Collado worked at two oil companies, one of which bought out the other one in 2014. The companies are referred to in court records not by their names but as “Company A” and “Company B.”

The charging records allege that Collado and unnamed co-conspirators deliberately misled price assessors toward oil prices “that did not reflect legitimate forces of supply and demand.” Collado allegedly manipulated the prices depending on his company’s needs; when they were selling, the manipulated price went high, and when they were buying, it went low, prosecutors allege.

For instance, on Aug. 24, 2016, Collado allegedly shifted the price per metric ton of oil down by roughly $40, “resulting in an unlawful gain of hundreds of thousands of dollars to Company B” on that day alone, the charging records say.

Collado is set to appear in court Wednesday afternoon before U.S. District Judge Charles Breyer for a change of plea hearing. Generally, change of plea hearings are set when a defendant has agreed to plead guilty or no contest to a charge, though no plea deals have been announced in Collado’s case.

If he’s convicted, Collado faces a maximum of five years in federal prison and a $250,000 fine, court records show

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Article: Supreme Court Decides Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning

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Supreme Court Decides Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning

Chuck Webber, Jeffrey P. Justman, James G. Martignon, 05 May 2016

On May 16, 2016, the Supreme Court of the United States decided Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, No. 14-1132, holding that that the “arising under” test for federal-question jurisdiction under 28 U.S.C. § 1331 determines whether federal courts have exclusive jurisdiction under section 27 of the Securities Exchange Act of 1934 (the “Exchange Act”) of lawsuits to enforce liabilities or duties created by that Act. (The Court did not address the portion of section 27 that gives federal courts exclusive jurisdiction of “violations of this chapter or the rules and regulations thereunder” with respect to criminal and regulatory enforcement actions.)

Greg Manning owned stock in Escala Group, Inc., a company traded on the NASDAQ. Between 2006 and 2007, Escala’s share price plummeted and Manning lost most of his investment. Manning blamed Merrill Lynch and other financial institutions for devaluing Escala during that period through “naked short sales” of its stock, under which one borrows stock from a broker and sells it to a buyer on the open market, but never delivers the shares back to the buyer. “Naked” short sales of stock may be designed to drive down a company’s stock price, and are accordingly regulated by Regulation SHO. Continue reading “Article: Supreme Court Decides Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning”