United States

President Trump Issues New Executive Order Blocking Property of the Government of Venezuela

On August 5, 2019, President Trump issued a new Executive Order (EO), blocking all property and interests in property of the Government of Venezuela (defined to include the Central Bank of Venezuela and Petróleos de Venezuela (PdVSA)) in the US or in the possession of US persons. The EO also empowers the Secretary of Treasury, in consultation with the Secretary of State, to block the property and interests in property of individuals or entities that materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to, any “specially designated nationals” (SDNs) or blocked persons under the EO, or entities owned, controlled by, or acting on behalf of the foregoing. As is common practice, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) has issued revised FAQs and a number of revised and new general licenses (GLs) authorizing certain limited activities by US persons involving the Government of Venezuela. These licenses relate primarily to the maintenance or winding down of existing activities with the Government of Venezuela, humanitarian efforts in the country, and other non-commercial and administrative tasks. Please click here to read our full briefing.

Walmart charged with failing to operate sufficient anti-corruption compliance program

The US Securities and Exchange Commission (SEC) has announced that it charged global retainer, Walmart Inc, with violating the Foreign Corrupt Practices Act 1977 by failing to operate a sufficient anti-corruption compliance program for more than a decade as the retailer experienced rapid international growth.

SEC adds fraud charges against purported cryptocurrency company, CEO and consultant

The SEC has filed a new fraud action against Longfin Corp. and its CEO for falsifying the company’s revenue and, together with a former Longfin consultant, for fraudulently securing the company’s listing on Nasdaq. The SEC’s prior charges against these defendants and two others resulted in a preliminary injunction freezing more than $27 million in allegedly illegal trading proceeds from unregistered distributions of Longfin stock. The SEC alleges that Longfin and its CEO, Venkata S Meenavalli, obtained qualification for a Regulation A+ offering by falsely representing in SEC filings that the company was principally managed and operated in the US when, in fact, the company’s operations, assets and management remained offshore. Longfin and Mr Meenavalli, as alleged, then engaged in a fraudulent scheme by distributing over 400,000 shares of Longfin to insiders and affiliates to meet certain Nasdaq listing criteria, without obtaining payment for any of these shares and, along with Longfin consultant Andy Altahawi misrepresented to Nasdaq the number of qualifying shareholders and shares sold in the offering. The SEC’s complaint alleges that Longfin and Mr Meenavalli also engaged in an accounting fraud, recording more than $66 million in sham revenue, representing nearly 90% of Longfin’s total 2017 reported revenue. Longfin voluntarily delisted from Nasdaq in May 2018 and shut down in November 2018.

SEC Obtains Freeze of $8 Million in Assets in Alleged Fraudulent Token Offering and Manipulation Scheme

The SEC has announced that it has obtained an asset freeze and filed fraud charges against a Brooklyn individual, and two entities under his control, for allegedly engaging in a fraudulent scheme to sell digital securities to investors and to manipulate the market for those securities. The court entered an emergency freeze to preserve at least $8m of the $14.8m the defendants raised in 2017 and 2018 in an offering of digital securities.