FiSolve Weekly News Digest: August 15, 2025

Here is what we are reading in the news this week...

SEC Obtains Judgment Against PCAOB Firm and its Managing Partner in Financial Fraud Case

The U.S. District Court for the Southern District of New York entered final consent judgments against a Public Company Accounting Oversight Board (PCAOB)-registered accounting firm and its managing partner enjoining them from violating certain provisions of the federal securities laws and ordering civil monetary penalties.  The SEC’s complaint alleged the firm and its managing partner created multiple fake audit reports and included them in SEC filings.  The complaint also alleged the firm helped conceal that the audit reports were fake, resulting in the auditor, investors, and regulators relying upon the misstatements and fake audit reports to their detriment.  According to the SEC’s complaint, this enabled a multi-year scheme to inflate financial performance metrics and defraud investors worldwide.  Read more here.

SEC Settles Case with Broker in Options Spoofing Case

The SEC alleges a trader placed fake—or spoof—orders to manipulate the prices of thinly traded options and then executed different orders at the resulting manipulated prices.  The trader’s alleged scheme included placing multiple spoof orders across neighboring options series.  To facilitate desired executions across these series, the trader used the complex order book to place multi-leg immediate-or-cancel orders.  After his immediate-or-cancel orders were executed, he then cancelled his spoof orders.  The SEC’s complaint further alleges the trader took steps to conceal his spoofing scheme from the firm by providing false and misleading responses to questions posed about his trading.  Ultimately, he was terminated by the firm.  The settlement includes permanent injunctive relief for certain provisions of the federal securities law, disgorgement, a civil penalty and other remedial measures.  Read more here.

Survey: Nearly Half of Workers Use AI Tools in Contravention of Firm Policies

A recent study of 500 full-time US employees by Anagram finds 45% admit to using banned artificial intelligence (AI) tools at work.  58% admit to pasting sensitive data into large language models, including client records, financial data, and internal documents, and 40% of those surveyed say they would knowingly violate company policy to finish a task faster.  Anagram suggests organizations adopt modern, engaging security awareness training that moves beyond outdated once-a-year sessions as a way to address these risks.  Read more here.

Federal Court Orders New York Man to Pay Over $3.4 Million For Forex Fraud Scheme Following

CFTC Summary Judgment Ruling

The Commodity Futures Trading Commission announced the U.S. District Court for the Eastern District of New York entered final judgment and imposed a judgment totaling $3,450,400 against an individual charged with fraudulently soliciting and accepting $1,492,650 from pool participants to trade forex contracts in a commodity pool operated by the individual and his company.  The individual also pled guilty in a related criminal case and was sentenced to 42 months in prison.  Read more here.

South Korean Crypto Entrepreneur Pleads Guilty in

$40 Billion Crypto Collapse

The co‑founder of Terraform Labs and the central figure behind the dramatic $40 billion collapse of the TerraUSD stablecoin and its associated Luna token, pleaded guilty this week in Manhattan federal court to two counts of fraud—specifically, conspiracy to commit fraud and wire fraud.  The plea resolves allegations that he misled investors about the stability and mechanics of TerraUSD, including claims that an algorithm maintained its peg during the May 2022 crash.  The founder agreed to forfeit more than $19 million in ill‑gotten proceeds and faces up to 12 years in prison (though sentencing guidelines could allow up to 25 years).  Read more here.

Europeans Investing in Local ETFs at Record Rate,

at the Expense of US stocks

Reuters reports European investors have put more money into local European stock index-trackers YTD in 2025 than in any full-year on record.  Investors had invested a net 39.4 billion euros ($46.2 billion) into European-focused Exchange Traded Funds (ETFs) domiciled in the region by the end of July - topping every full-year tally since 2008 when Morningstar first collected the data.  Read more here.

SEC Launches New Statistics and

Data Visualizations Webpage

The SEC announced the launch of a new statistics and data visualization page that includes statistics and graphics on key elements of the capital markets such as IPOs, exempt offerings, corporate bond offerings, reporting issuers, municipal advisors, transfer agents, and household participation in the capital markets. The new webpage can be found on the SEC’s website under Data & Research.  Read more here.

FiSolve Fall Roundtables to be Announced

Stay tuned for information relating to an upcoming roundtable this fall.  The Roundtable is planned to take place in New York City.

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