Posted On Thursday, July 13, 2017
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What Happened?
At the end of June, the SEC filed fraud charges against Renwick Haddow, a U.K. Citizen and alleged founder of a Bitcoin platform and chain of shared office spaces, alleging his use of the United States as the base of operations to defraud investors out of $37.7 million.
The Rundown
The SEC filed its civil complaint in the Southern District of New York, alleging that Haddow – through the creation and use of sham companies – mislead investors into believing that the companies had ongoing operations and capable senior executives ready to take the helm. The SEC contends that the Bitcoin platform – named the Bitcoin Store – didn’t have any operations or gross sales. The complaint also alleged that the supposed executives, in the SEC’s words, “do not appear to exist,” and approximately $5 million of the invested funds were not invested in operations as promised. They were diverted to overseas banks in Mauritius and Morocco. The complaint seeks several forms of relief including the return of the investors’ funds and injunctive relief barring Haddow from further violations of the Securities Exchange Act and related laws.
In addition to filing the complaint, the SEC obtained an order granting an emergency freezing of the assets of Haddow and his companies. Haddow also faces criminal charges in the Southern District of New York related to the alleged fraud.
For the Record
“As alleged in our complaint, Haddow created two trendy companies and misled investors into believing that highly-qualified executives were leading them to quick profitability. In reality, Haddow controlled the companies from behind the scenes and they were far from profitable,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.
The Take-Home
This case serves as another reminder of the SEC’s authority to protect the investing public through the use of civil actions seeking monetary penalties, injunctive relief, disgorgement of illegally-obtained funds, the freezing of assets through a number of statutes including the Securities Act of 1933 and Exchange Act of 1934.
Posted On Wednesday, July 12, 2017
What Happened?
The Pennsylvania Senate passed the “Clean Slate” bill, which would automatically seal nonviolent misdemeanor convictions of individuals who have not been convicted of a crime in the last ten years.
The Rundown
Pennsylvanians with misdemeanor convictions must currently petition the court to seal old convictions, but the Commonwealth’s new Clean Slate law could seal their criminal records automatically. Under the legislation, which was crafted in part to help individuals with minor convictions obtain employment, nonviolent misdemeanor convictions will be sealed automatically where the offender has been crime-free for ten years.
The digitization of criminal records has made it easier for companies to conduct background checks on potential employees, increasing the likelihood that an applicant’s criminal record could impact their chances of getting the job. While this technology may be a good thing in the case of violent crimes and felonies, the increased use of background checks that reveal even the most benign criminal offenses may also eliminate job opportunities for individuals with old and minor convictions who would otherwise be qualified contenders. Though many misdemeanor convictions can be sealed under the current law, most eligible candidates do not petition the court to seal their records, leaving them accessible to the public’s—and potential employer’s—view.
The Clean Slate law will remedy this problem by taking advantage of Pennsylvania’s centralized electronic record system to identify eligible convictions and cross-reference them against court records in each of the Commonwealth’s judicial districts. Convictions that meet the law’s criteria will automatically be sealed. The law would also save taxpayer time and money, as court employees will no longer have to personally review records and respond to petitions on a case-by-case basis.
For the Record
The Clean Slate bill’s sponsors include both Republicans and Democrats, and it is supported by the Pennsylvania District Attorneys Association and the Pennsylvania State Police. Republican Senator Scott Wagner, the prime co-sponsor of the legislation, wrote that while the bill may be perceived as “risky” by some people, if it becomes a law, “it has the potential to change the lives of hardworking people who are trying to provide for their families and create a better life for their children.”
The Take Home
This legislation represents a desire to reform our criminal justice system so that nonviolent offenders who have overcome their criminal problems are not held back by their past mistakes. By sealing eligible convictions automatically, Pennsylvania takes the burden off of individuals who may not have the time, money, or legal know-how to petition the court themselves.
What Happens Next
The bill was passed by the Pennsylvania Senate and sent to the House on June 29, 2017, where it is currently being considered by the Judiciary Committee.
