SEC Charges Rothenberg Ventures in Fraudulent Scheme
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Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#2"Without admitting or denying the allegations in the SEC’s complaint, Rothenberg and Rothenberg Ventures agreed to settle the charges. The settlement is subject to approval by the federal district court for the Northern District of California which would determine the amount of disgorgement and civil money penalties. Rothenberg also agreed to be barred from the brokerage and investment advisory business with a right to reapply after five years. An SEC order imposing the bar will be instituted following court approval of the settlement" [1].
Besides blowing investors' money on lavish staff events, which is a dick move but not necessarily illegal, Rothenberg also invested "$5 million from Rothenberg Ventures' second and third funds in his own startup company, River Studios" [2].
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#37 million sounds like a drop to settle for, plus likely a small fine.
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#47 million sounds like a drop to settle for, plus likely a small fine.
yeah I've pretty much given up on the justice system.
if you have money regardless of how you obtained it, the law always favor those with capital for the most part. Unless you try to fight back against government's monopoly on violence....drug traffiking being a major competition, it makes sense why harsh sentences are handed out for drug dealers while white collar criminals that inflict damage to millions of people all over the world gets a slap on the wrist.
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#5Can somebody explain whether this can still lead to criminal prosecution?
As I recall from the Theranos stuff - the SEC reached a similar settlement with Elizabeth quickly [1]. My understanding is that they want to protect the markets and get bad actors banned without years of trials. But then, the DOJ came in filed separate charges that will likely take much longer to prosecute, but have the potential for more severe punishment such as prison term.
So - is this a sign that more significant trouble is coming for Rothenberg?
[1] https://www.sec.gov/news/press-release/2018-41
[2] https://www.justice.gov/usao-ndca/pr/theranos-founder-and-fo...
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#67 million sounds like a drop to settle for, plus likely a small fine.
yeah I've pretty much given up on the justice system. if you have money regardless of how you obtained it, the law always favor those with capital for the most part. Unless you try to fight back against government's monopoly on violence....drug traffiking being a major competition, it makes sense why harsh sentences are handed out for drug dealers while white collar criminals that inflict damage to millions of people…
> I've pretty much given up on the justice system
The SEC can't bring criminal charges. They levy fines, usually limited to repaying the money one stole plus their administrative expenses, ban people from the industry and refer cases for criminal prosecution. Their point is to stop damage, not necessary punish it.
The criminal process is more selective about what it attacks. It's where justice is delivered. As a result of due process, it's also much slower.
I remember similar complaints in the months between the civil penalties for Holmes et al and the announcement of criminal charges. These things take time. Sometimes, the bar for criminality isn't met. That said, the most damaging parts of this to Rothenberg are (a) the bad publicity and (b) being barred from the industry. The latter is probably much worse than $7 million.
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#7Without admitting or denying the allegations in the SEC’s complaint, Rothenberg and Rothenberg Ventures agreed to settle the charges. The settlement is subject to approval by the federal district court for the Northern District of California which would determine the amount of disgorgement and civil money penalties. Rothenberg also agreed to be barred from the brokerage and investment advisory business with a right to reapply after five years. An SEC order imposing the bar will be instituted following court approval of the settlement.
Fascinating, but not surprising, that it settled right away. I am curious whether the settlement details would be made available in any way.
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#87 million sounds like a drop to settle for, plus likely a small fine.
yeah I've pretty much given up on the justice system. if you have money regardless of how you obtained it, the law always favor those with capital for the most part. Unless you try to fight back against government's monopoly on violence....drug traffiking being a major competition, it makes sense why harsh sentences are handed out for drug dealers while white collar criminals that inflict damage to millions of people…
> government's monopoly on violence
Can I get a source on this?
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#9Can somebody explain whether this can still lead to criminal prosecution? As I recall from the Theranos stuff - the SEC reached a similar settlement with Elizabeth quickly [1]. My understanding is that they want to protect the markets and get bad actors banned without years of trials. But then, the DOJ came in filed separate charges that will likely take much longer to prosecute, but have the potential for more sever…
SEC cannot prosecute criminal charges. What they can do is build a case and hand it over to DoJ/FBI for actual criminal prosecution (which as you said can take years).
The taint of an SEC investigation is enough to scare away most investors from the entity though. Which is really helpful.
Re: SEC Charges Rothenberg Ventures in Fraudulent Scheme
#10Without admitting or denying the allegations in the SEC’s complaint, Rothenberg and Rothenberg Ventures agreed to settle the charges. The settlement is subject to approval by the federal district court for the Northern District of California which would determine the amount of disgorgement and civil money penalties. Rothenberg also agreed to be barred from the brokerage and investment advisory business with a right t…
Whistleblower here. It took 25 months from when I reported the fraud until the settlement.