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On 11 December 2024, the United States Commodity Futures Trading Commission (US CFTC) announced that the United States District Court for the Central District of California issued two orders against five individuals involved in a fraudulent digital asset scheme operating under the name Icomtech. The court's consent order and default judgment require the defendants—Marco A. Ruiz Ochoa, David Carmona, Juan Arellano Parra, Moses Valdez, and David Brend—to collectively pay over $5 million for defrauding at least 190 investors out of more than $1 million through false promises of high returns from trading digital assets like Bitcoin. The legal actions stem from the US CFTC's May 2023 complaint, which charged the defendants with fraud and misappropriation in violation of the United States Commodity Exchange Act (CEA) and related US CFTC regulations. The court found that from August 2018 to December 2019, the defendants engaged in a deceptive scheme that falsely represented to investors...

On 11 December 2024, the United States Securities and Exchange Commission filed a complaint against Ken Peterman, the former Chief Executive Officer, chair of the Board, and president of Comtech Telecommunications Corp., in the United States District Court for the Eastern District of New York. The complaint alleges that Peterman engaged in insider trading by selling Comtech stock while in possession of material non-public information about the company's poor financial performance for the second quarter of its fiscal year 2024 (Q2 FY24). These actions violated United States federal securities laws and breached his fiduciary obligations. The complaint centres on Peterman’s sale of Comtech shares prior to the public disclosure of financial losses for Q2 FY24, which resulted in a 25.4% drop in Comtech’s stock price. By acting on confidential information obtained through his position at Comtech, Peterman avoided approximately $12,445 in losses and attempted to avoid further losses by...

On 9 December 2024, the United States Securities and Exchange Commission (US SEC) issued an order instituting administrative and cease and desist proceedings, pursuant to section 15(b) of the United States Securities Exchange Act of 1934 and Sections 203(e) and 203(k) of the United States Investment Advisers Act of 1940, making findings, and imposing remedial sanctions and a cease-and-desist order against Morgan Stanley Smith Barney LLC (MSSB), alleging serious lapses in its policies and procedures designed to protect client funds. The US SEC’s order is issued against the MSSB’s failure to detect and prevent the misappropriation of millions of dollars from customer accounts by four financial advisers (FAs). The US SEC found that MSSB failed to adopt and implement effective safeguards, allowing the fraudulent activities of its financial advisers, Michael Carter, Chingyuan “Gary” Chang, Douglas McKelvey, and Jesus Rodriguez, to go undetected. These individuals misused client funds...

On 9 December 2024, the United States Commodity Futures Trading Commission filed a complaint against Francier Obando Pinillo, accusing him of operating a fraudulent cryptocurrency scheme. Pinillo, through his unregistered entities, Solanofi, Solano Capital Investments and Solano Partners LTD, allegedly solicited funds from over 1,500 individuals, including members of his church, misappropriating approximately US$5.9 million in the process. The complaint states that Pinillo allegedly used his businesses to promise guaranteed monthly profits of up to 34.9% through purported cryptocurrency trading and staking activities but no such trading took place. Instead, Pinillo misappropriated the funds for personal gain, using falsified account statements to deceive customers into believing their investments were growing exponentially. Pinillo targeted financially vulnerable and unsophisticated individuals, leveraging his position as a pastor at a Spanish-speaking church in Pasco, Washington....

On 10 December 2024, the Australian Securities and Investments Commission (ASIC) published an updated version of its Regulatory Guide 133, titled Funds Management and Custodial Services: Holding Assets. This updated Regulatory Guide 133, provides guidance to asset-holding entities under the Australian financial services (AFS) licensing framework. It outlines clear obligations and minimum standards for the custody and management of client assets, with a particular focus on security, operational integrity, and compliance. The guide also addresses the management of emerging asset classes such as crypto-assets, ensuring that custodial practices evolve alongside financial innovation. ASIC has reissued this regulatory guide to reflect the latest developments and provide updated guidance for asset-holding AFS licensees. The targeted licensees include responsible entities of registered managed investment schemes and licensed providers of custodial services. This latest version of RG 133...

The Cayman Islands Monetary Authority has announced the appointment of Ms. Jessica Ebanks as the Head of the Securities Supervision Division, effective from 1 November 2024. Ms. Ebanks began her career at CIMA in 2013 as an Analyst in the Investments & Securities Supervision Division. In 2017 she became the sole Chief Analyst in the newly established Securities Supervision Division and Instrumental in building the Division from its inception. Ms. Ebanks was promoted to Deputy Head in 2020. Ms. Ebanks holds a Bachelor’s degree in Management and Organisational Studies, specialising in International and Comparative Studies (Globalisation), from the University of Western Ontario. She is a Certified Fraud Examiner and has completed the Canadian Securities Course, Canadian Practices Handbook, and programmes with IOSCO and PIFS-Harvard Law School. She holds an ILM Level 5 qualification in Leadership and Management. CIMA’s Chief Executive Officer, Mrs. Cindy Scotland, OBE, commented: "We...

On 5 December 2024, the United States Commodity Futures Trading Commission announced a legal resolution in its enforcement action against Marcus Todd Brisco, a Hawaii-based operator accused of running fraudulent schemes through two commodity pools. The U.S. District Court for the Southern District of Texas issued a consent order imposing permanent injunctive relief, civil monetary penalties, and restitution obligations on Brisco. Marcus Todd Brisco, operating through Yas Castellum LLC and Yas Castellum Financial LLC, solicited funds from investors under the guise of engaging in leveraged or margined foreign exchange (forex) and gold transactions. These promises proved fraudulent as Brisco failed to direct the funds toward trading activities as pledged. Instead, he misappropriated amounts for personal use and transferred funds to other entities. Between October 2020 and January 2023, his actions caused more than US$1.6 million in losses to pool participants. The United States...

On 6 December 2024, the Hong Kong Government announced the publication of the Hong Kong Stablecoins Bill in the Gazette, aiming to establish a regulatory framework for fiat-referenced stablecoins within its jurisdiction. The Hong Kong Stablecoins Bill, if enacted in its current form, would introduce a licensing regime requiring individuals or entities involved in issuing fiat-referenced stablecoins as part of a business in Hong Kong; issuing stablecoins pegged to the Hong Kong dollar; or marketing stablecoin issuances to the public in Hong Kong, to obtain authorisation from the Hong Kong Monetary Authority (HKMA). The Hong Kong Stablecoins Bill, if enacted in its current form, would grant the HKMA, the powers to supervise, investigate, and enforce compliance within the regulatory framework. The HKMA and the Hong Kong Government have, over the past three years, worked to address the risks and opportunities presented by stablecoins within the broader framework of virtual assets. The...

On 26 November 2024, the Commodity Futures Trading Commission, the regulatory authority overseeing derivatives markets in the United States, announced that its Market Risk Advisory Committee (MRAC) will hold a public meeting on Tuesday, 10 December 2024. The meeting will take place at the US CFTC headquarters in Washington, D.C., from 9:30 a.m. to 12:30 p.m. Eastern Time, with an option for virtual participation. The MRAC meeting will focus on issues within the derivatives and financial markets, central counterparty risk and governance, market structure, climate-related risks, and the impact of emerging technologies. The Central Counterparty Risk & Governance subcommittee will lead discussions on cyber resilience and third-party service providers, while the Market Structure subcommittee will address the cash-futures basis trade. A detailed agenda for the session will be released in the coming days. The meeting is open to the public, who may attend in person or access a live...

On 26 November 2024, the United Kingdom Financial Conduct Authority announced progress in developing a regulatory framework for cryptoassets. This follows insights gathered earlier in the year during a series of roundtable discussions involving over 100 organisations, including crypto exchanges, banks, trading firms, blockchain analytics companies, and other key stakeholders. The discussions also included government representatives, academics, and regulatory authorities such as HM Treasury, the Bank of England, and the United States Securities and Exchange Commission. The roundtables addressed key aspects of the proposed regulatory framework, focusing on admissions and disclosures, market abuse prevention, and trading platform regulations, with the aim of creating a balanced and effective system. The United Kingdom Financial Conduct Authority is working to establish a regime that supports innovation while protecting investors and maintaining market integrity. Feedback from these...