The former chief financial officer of cloud services provider Synchronoss Technologies SNCR allegedly overstated the company’s finances to match revenue expectations it otherwise would have failed to meet.
Last week, a New York District Court granted the Securities and Exchange Commission partial summary judgment against Karen Rosenberger, aided and abetted by Joanna Lanni, a financial controller.
The SEC alleged that Rosenberger and Lanni engaged in accounting misconduct by publicly filing with the SEC false financial statements with respect to five transactions, and engaged in fraud concerning three of them.
The financial regulator further alleged that Rosenberger sought to cover up her misconduct by lying to the company’s auditor, falsifying its books and records and circumventing the firm’s system of financial controls.
The court granted the SEC’s motion against Rosenberger and Lanni, finding Rosenberger liable for fraud, and liable for reimbursement of $430,741 to Synchronoss.
Comer Capital Misprices $6M Muni Bond Offer
Mississippi-based municipal bond advisor Comer Capital Group and its managing partner Brandon Comer consented to pay disgorgement fees of $25,000 and civil penalties totaling $50,000 after being charged with breaching fiduciary duty in connection with a $6 million bond offering.
The SEC complaint alleged Comer failed to protect the interests of his client, the Harvey Public Library District in Illinois after it hired him to advise on the municipal bond offering process, including the selection of an experienced underwriter and the pricing of the bonds.
The allegations added that upon learning the underwriter was having difficulty finding investors to buy the bonds, Comer failed to advise the Library District to either find a different or additional underwriter or broker-dealer.
The SEC further alleged that Comer failed to provide the Library District with the appropriate information needed to determine a “fair and reasonable” price for the bonds. According the SEC, the price was not fair and reasonable, and the mispricing would cause the Library District to pay more than $500,000 in additional interest over the life of the bonds.
Beware Spoof Charities Laundering Cash
On Thursday, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert to financial services companies related to the use of spurious non-profit organizations in the financing of Israeli extremist settler violence against Palestinians in the West Bank.
"Financial institutions can play a critical role in detecting and reporting potential suspicious activity related to the financing of Israeli extremist settler violence," said FinCEN Director Andrea Gacki.
"The U.S. financial system should be protected from those who seek to support or perpetrate violence and bring further instability to the West Bank," she added.
The alert highlighted the involvement of potential non-profit organizations in facilitating payments to fund violence in the West Bank. FinCEN urged financial institutions to apply a strict risk-based approach to customer due diligence requirements when developing their profiles of charities and other not-for-profit organizations.
Iraqi Bank Under Scrutiny
Meanwhile, on Monday, FincEN said it had identified Al-Huda Bank, an Iraqi financial services company, to be of primary money laundering concern.
According to FinCEN’s findings Al-Huda Bank had, for years as a correspondent bank, exploited its access to U.S. dollars to help fund organizations including Iran’s Islamic Revolutionary Guard Corps as well as Iran-aligned Iraqi militias Kata'ib Hizballah and Asa'ib Ahl al-Haq.
The Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian Nelson, said Iran used the bank to channel funds for destabilizing activity.
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