Adrian JohnsonTLDR:
- An investment firm will pay $80M for overvaluing collateralized mortgage obligations, while an accounting outfit will pay $2M for a crypto audit scam.
- Investment firm Macquarie Investment Management Business Trust will pay $79.8 million for overvaluing about 4,900 CMOs.
Macquarie Investment Management Business Trust has been ordered to pay $79.8 million for overvaluing approximately 4,900 largely illiquid collateralized mortgage obligations (CMOs) and executing cross-trades that favored certain clients. The firm managed an investment strategy primarily focused on mortgage-backed securities, CMOs, and treasury futures. The firm misrepresented the value of thousands of smaller-sized CMO positions, resulting in accounts holding these overvalued securities to have inflated performances. Additionally, an accounting firm Prager Metis CPAs, LLC, and its California counterpart have agreed to pay $1.95 million for misconduct in audits of a crypto asset trading platform, FTX, and violations related to auditor independence. Prager Metis misrepresented compliance with auditing standards regarding FTX and failed to follow auditing standards by not adequately assessing resources and competency for the audit. The firm has been charged with negligence-based fraud and will pay penalties for violating auditor independence rules and aiding clients’ violations of federal securities laws. Former executives of Kubient Inc. were charged by the SEC for carrying out a scheme in which the company overstated and misrepresented revenue related to public stock offerings. The executives allegedly lied about the success of software tests, allowing the company to generate revenue it should not have received. Kubient raised about $33 million in two stock offerings using misleading information about revenue.
