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Securities Frauds

People's United Bank Logo

Investors bring this class action against companies they believed would build a Jay Peak Ski Resort in Vermont—People’s United Financial, Inc. and People’s United Bank. But according to the complaint, the money they put up went to an alleged Ponzi scheme, finally uncovered in a two-year investigation by the Securities and Exchange Commission (SEC).

Word "Fraud" in Red Circle with Strikethrough

The complaint for this class action alleges that a Ponzi scheme built around Towers Financial Corporation (TFC) took millions of dollars from over 200,000 investors between the late 1980s and the mid-1990s. One of the parties to this scheme, Steven Hoffenberg, was convicted and sentenced to twenty years in prison, plus fined and required to apy over $450 million in restitution. This case seeks penalties for The Financial Trust Company (TFTC), Jeffrey E. Epstein, and other entities involved in the scheme.

Four Cryptocurrency Coins

How do people know which cryptocurrencies are worth their offering prices and which are simply scams? The complaint for this class action says that Julian (or Juvane) Spence, the seller of the Dark Ripple or DRIP token, implied that his tokens were related to a more established currency called Ripple. This and other false or misleading statements, the complaint says, were violations of the Securities Exchange Act of 1934 as well as common law fraud.

Homex Logo

The Securities and Exchange Commission (SEC) used satellite imagery to find evidence of fraud in the financials of Desarrolladors Homex SAB de CV, or Homex Development Corporation. According to the complaint for this securities class action, Homex reported that it had built a certain number of homes, but satellite photos at many of the locations showed vacant lots. The SEC eventually charged Homex with a $3.3 billion accounting fraud, and the complaint thus claims that Homex’s financial reports were false, in violation of the Securities Exchange Act of 1934, making the company responsible for stock losses when corrective information emerged.  

Citizens Old Annual Report Cover

The complaint for this class action alleges that Citizens, Inc. sells insurance policies in foreign countries in order to evade US regulations. It claims that it uses improper growth projections to enroll customers in programs where dividends are used to buy the company’s stock, and sells policies that require payment of US taxes as if they were tax-exempt. Among other things, the company has not held a conference call in two years, and the complaint claims it is under investigation by both the SEC and IRS.

Insys Logo and Test Tubes

Misstated figures can simply be errors, but the complaint for this class action says that Insys Therapeutics committed fraud by manipulating figures to hide the company’s falling revenues, in violation of Securities Exchange Act of 1934. Why did it feel it needed to do that? Because, the complaint claims, the company had previously engaged in the encouragement of off-label use and a kickback scheme, and after that was revealed, its former customers were reluctant to do business with it. 

Adult Hands Holding Baby Feet

OvaScience develops fertility treatments using egg precursor cells to improve egg health and in vitro fertilization (IVF). Unfortunately, the complaint for this class action alleges that Ova’s statements about its Augment treatment didn’t just violate the Securities Exchange Act of 1934; it says they were also fraudulent. Ova claimed to be on track to sell 1,000 cycles of its Augment treatment in 2015, but by late September announced it had only sold about 35; also, the complaint says that when closely examined, the data offered proved much less promising than the company had implied. By August 2017, the stock had fallen by 97% from its highest point.  

Monkey Capital Logo

At issue in this class action are nearly $4 million worth of investments the plaintiffs believed they were making into a new cryptocurrency from Monkey Capital prior to its initial coin offering (ICO). The investments were made primarily in bitcoins. The complaint contends that cryptocurrencies are actually unregistered securities and asks for relief from Monkey Capital’s alleged wrongdoing on that basis. According to the complaint, no ICO took place, and Monkey’s fundraising website disappeared. The complaint claims that cryptocurrencies are securities and that Monkey’s actions were an unregistered offer and sale of securities and fraud, among other things, in violation of the Securities Act of 1933 and Florida state laws.

Diana Containerships Ship

The complaint claims that Palios caused Diana to sell common shares and convertible securities at a significant discount to a company called Kalani Investments, which Kalani then sold on the market. These sales caused the price of Diana’s stock to decline, the complaint claims, after which Diana reverse-split the stock, turning a number of shares of stock into one share, which again raised the per-share price. Over eight months after the filing of the original, misleading Registration Statement, the number of shares ballooned while their price fell, so that the complaint alleges that, on an adjusted basis, the price fell from $2,500 at the beginning of 2017 to only 47 cents by October that year.

HSBC Logo on Wall

This is the third in a series of class action suits filed by Royal Park Investments (RPI) based on other current lawsuits. The original lawsuits each allege that a certain bank has failed to fulfill its duties as trustees to RPI funds; these secondary suits allege that the defendant banks have been paying their legal fees for the original suits out of the trusts’ funds. The complaint for this class action claims that neither the trusts’ Governing Agreements nor the common law of trusts permits HSBC to use the trusts’ funds for this purpose. As the complaint puts it, “Thus, the investors are being harmed by HSBC twice—first through HSBC’s misconduct as alleged in the Litigation, and second through HSBC’s improper and illegal use of those same damaged investors’ funds to defend itself for its misconduct.”