Bill proposing qui tam action is sent to LA House committee

A bill proposing a qui tam action for people who report fraud against the state of Louisiana was recently sent to the Committee on House and Governmental Affairs.

Sponsored by state Rep. Raymond Crews (R-Bossier City), House Bill 97 (HB 97) authorizes a qui tam action for private citizens who report certain fraudulent actions committed against the state of Louisiana. Under this qui tam action, the plaintiff may seek damages in civil court on behalf of the themselves and the state.

The damages received by the qui tam plaintiff are limited and involve the court's discretion. The damages received by the plaintiff should not exceed 30 percent of the total damages. read more »

Facebook suspends another analytics firm amid questions over surveillance

Facebook has suspended a social media analytics firm from accessing user data while it investigates potential violations of its policy barring surveillance.

The firm, Crimson Hexagon, boasts an impressive list of blue chip clients and claims to have collected more than 1tn public social media posts from Facebook, Instagram, Twitter, Tumblr, and other sources. It uses artificial intelligence and image analysis to monitor social media and provide customers with insights into public sentiment about their brands.

But the company had its access to the Facebook and Instagram APIs shut off Friday after the Wall Street Journal queried Facebook about Crimson Hexagon’s contracts with the US government, a Russian not-for-profit with ties to the Kremlin, and the Turkish government. read more »

Swiss regulator: Rothschild Bank AG broke anti-moneylaundering rules in 1MDB case

Rothschild Bank AG and one of its subsidiaries committed serious violations of anti-moneylaundering rules in relation to 1MDB, the Malaysian sovereign wealth fund, Switzerland’s financial regulator said on Friday.

The regulator, FINMA, said in a statement it was nonetheless closing its probe into Rothschild. It will review the steps the institution has taken to tighten up its procedures.

Rothschild Bank AG said it noted the regulator’s comments and regretted the breaches that occurred.

“We constantly strengthen our systems and procedures and are determined to continue to do so to identify and combat the increasingly sophisticated financial crime faced by the industry,” the bank said in a statement. read more »

Commodity Pool Operator and Its Principal to Pay More Than $1.9 Million for Bitcoin and Binary Options Fraud Scheme

On July 9, 2018, a New York federal court ordered Dillon Michael Dean (Dean) of Longmont, Colorado, and The Entrepreneurs Headquarters Limited (TEH), Dean’s UK-registered company, to pay over $1.9 million in civil monetary penalties and restitution in connection with a lawsuit brought by the Commodity Futures Trading Commission (CFTC).

In an Order and Default Judgment (Order) filed July 9, 2018, Judge Sandra J. Feuerstein of the U.S. District Court for the Eastern District of New York found that TEH and Dean (together, Defendants) engaged in a fraudulent scheme to solicit Bitcoin from members of the public, misrepresented that customers’ funds would be pooled and invested in products including binary options, and misappropriated pool participants’ funds; and that TEH and Dean failed to register with the CFTC as a Commodity Pool Operator (CPO) and Associated Person of a CPO, respectively, as required.

Judge Feuerstein’s Order found that from approximately April 2017 through the filing of the CFTC’s Complaint on January 18, 2018 (see CFTC Complaint and Press Release 7674-18), Defendants, who never registered with the CFTC in any capacity, engaged in a fraudulent scheme, through which they solicited at least $499,264.04 worth of Bitcoin from at least 127 members of the public.  Defendants promised to convert this Bitcoin into fiat currency to invest on their customers’ behalf in a pooled investment vehicle for trading commodity interests, including trading binary options on an online exchange designated as a contract market by the CFTC.  Potential pool participants were solicited to invest with Defendants by false claims of trading expertise and promises of high rates of return.  Rather than convert customers’ Bitcoin to fiat currency to invest in binary options contracts, as promised, Defendants misappropriated their customers’ funds.  At least 120 customers suffered total losses of at least $432,184.79 as a result of Defendants’ fraud. read more »