SEC Watch is The Investigative Journal’s daily review of notable filings on the SEC’s EDGAR system, enforcement actions, and market-structure developments. Every claim below is drawn from the linked public records.
A billion-dollar fake-revenue allegation at a NYSE-listed holding company’s crown-jewel subsidiary, an $80 million private-fund scheme that regulators say devastated retirees, GoPro’s unusual $285 million recapitalization, and a newly independent FedEx spin-off’s terse disclosure that it fired a top executive: the filings that crossed EDGAR between August 28 and September 2 offer an unusually rich docket for accountability-minded readers. Here is what stands out, with direct links to the underlying records.
SEC alleges $1 billion in fictitious revenue at Compass Diversified’s Lugano Diamonds
The most consequential enforcement development in this cycle is the SEC’s case against Mordechai Haim Ferder, founder and former chief executive of Lugano Diamonds & Jewelry, Inc., the Orange County jeweler owned by NYSE-listed Compass Diversified Holdings (CODI). According to Litigation Release No. 26625, published September 1, the Commission’s complaint — filed August 31 in the U.S. District Court for the Central District of California (No. 8:26-cv-02492) — alleges that Ferder ran a scheme from 2021 to 2025 that caused Lugano and its public parent to recognize more than a billion dollars of fictitious revenue.
The complaint alleges that Ferder convinced individuals to invest hundreds of millions of dollars in diamonds that he and Lugano never owned, promising to acquire the stones, find buyers, or craft jewelry to increase the investments’ value. In reality, the SEC alleges, no diamonds were purchased and investors were repaid with Ponzi-like payments funded by newer investors. Filings indicate the alleged accounting dimension is what elevates this case: the complaint asserts Ferder directed Lugano to record investor funds as revenue and to disguise repayments as inventory purchases — distortions that flowed directly into the consolidated financial statements of CODI, which acquired Lugano in 2021. After the conduct was discovered in 2025, CODI restated its financial statements, according to the release. The complaint also names Simba IL Holdings LLC as a defendant and family trusts as relief defendants.
These are allegations, not findings; the litigation is pending and Ferder is entitled to contest the charges in court. But for public-company investors, the scale matters: a billion dollars of allegedly fictitious revenue moved through audited financials of an NYSE-listed holding company for roughly four years before detection. How that happened is a question for CODI’s auditors, board, and — in TIJ’s view — for deeper reporting.
$80 million “Ponzi-like” private fund scheme allegedly targeted retirees
The SEC on September 1 charged Mark D. Hanf, former CEO of Novato, California-based Pacific Private Money Group LLC, and Hoai-Nam “Nam” Chu Phan, former COO of a PPMG subsidiary, with an offering fraud that raised more than $80 million from roughly 190 mostly retail investors — many of them, per the agency, retired senior citizens.
According to the SEC’s complaint, filed in the Northern District of California, the pair told investors from December 2021 to November 2025 that their capital would originate or purchase real-estate-secured loans producing preferred or fixed returns. Instead, the agency alleges, new investor money funded Ponzi-like payments to earlier investors, and Hanf misappropriated more than $7 million for personal benefit. The arithmetic disclosed by the SEC is stark: against almost $121 million in outstanding investments in the two funds, recoverable assets were estimated at less than $17 million by February 2026. “That amounts to devastating losses for so many investors,” said Jason Lee, associate director of the SEC’s San Francisco office, in the release.
Without admitting the allegations, both defendants consented to judgments — subject to court approval — that would enjoin them from future violations and bar them from participating in securities issuances or sales other than for their own accounts, with monetary relief to be determined later by the court.
Texas attorney and podcast host charged over four alleged offering frauds
In a companion action filed August 31 in the Northern District of Texas, the SEC charged Texas attorney David T. Gilchrist with conducting four allegedly fraudulent securities offerings between 2021 and 2025 that raised more than $1.85 million from at least 22 investors, and charged podcast host Christopher “Aaron” Novinger with soliciting investors in two of them. Investors were variously told their money would advance settlement payments to class-action plaintiffs or buy delinquent-property tax liens; the complaint alleges Gilchrist instead misappropriated funds and made Ponzi-like payments.
The recidivism angle warrants attention: the complaint alleges Novinger’s conduct violated a 2016 SEC order barring him from associating with a broker, and that he falsely told two investors he had personally invested. His wife, Rebecca Novinger, is named solely as a relief defendant for purposes of recovering funds. The charges are allegations and remain unproven; the case is pending.
GoPro signs $285 million merger and recapitalization — shareholders keep a 10% stub
On the corporate side, GoPro, Inc. (Nasdaq: GPRO) filed an 8-K on September 2 disclosing an Agreement and Plan of Merger, dated September 1, with Action Acquisitions LLC and its merger subsidiary Starman Optical, Inc. Under the agreement, each GoPro share converts into $1.14 in cash plus 0.1 of a share of the surviving corporation — meaning existing holders would retain a minority interest rather than exit entirely. The filing notes the cash component is subject to potential downward adjustment for any net working capital shortfall below a contractual threshold, a term shareholders should read closely before the vote.
The company’s announcement describes the transaction as an approximately $285 million deal in which GoPro remains a publicly listed company, existing shareholders retain roughly 10 percent ownership, and about $92 million of debt is repaid at closing, with the combined business repositioning toward optical-photonics, AI-infrastructure, and government markets alongside the consumer camera franchise. GoPro’s board unanimously approved the agreement and resolved to recommend it to stockholders, per the 8-K; closing requires adoption by a majority of outstanding shares and clearance under Hart-Scott-Rodino.
Records reviewed so far leave a reporting gap TIJ intends to fill: the 8-K does not detail who stands behind Action Acquisitions LLC or the sources of its financing. Those disclosures should surface in the forthcoming merger proxy, which will merit line-by-line scrutiny.
LivePerson holders approve SoundHound merger — after an adjournment to find votes
SoundHound AI, Inc. (Nasdaq: SOUN) disclosed in a September 2 filing that LivePerson, Inc. stockholders approved the companies’ amended merger agreement at a reconvened special meeting that morning. Notably, the meeting had originally convened August 20 and was adjourned to September 2 “to allow LivePerson to solicit additional proxies” — a procedural detail that, records suggest, points to an initially insufficient vote. LivePerson’s own 8-K reports the voting results.
With the vote secured, the parties said they expect to proceed to closing, including a restructuring in which holders of LivePerson’s first- and second-lien secured notes due 2029 will release their claims under an April 21, 2026 agreement. Per the filing, LivePerson holders will receive 0.4673 SoundHound Class A shares plus $3.31 in cash per share. SoundHound’s disclosure was made under Item 3.02 — unregistered sales of equity securities — in connection with the share issuances contemplated by the notes restructuring, an issuance path investors in the diluted combined company will want to understand.
FedEx Freight terminates senior executive after internal investigation
Newly independent, NYSE-listed FedEx Freight Holding Company, Inc. (FDXF) disclosed in a September 2 8-K that it terminated Michael B. Lyons, executive vice president and chief specialized services and commercial officer, that same day. According to the filing, an internal investigation determined Lyons violated the company’s Code of Conduct and “no longer met the standards of employment” at FedEx Freight.
The company stated the conduct “was not related to and did not impact” its financial reporting, internal controls, strategy, or customer relationships, and said his responsibilities are transitioning to other executives while it searches for a replacement. The filing does not describe the underlying conduct and contains no statement from Lyons, and TIJ found no public response from him in the records reviewed for this digest. The absence of specifics is itself notable: investors in the recently separated carrier are left to rely on the company’s characterization that the matter is contained.
American Healthcare REIT poaches CFO from Public Storage
American Healthcare REIT, Inc. (NYSE: AHR) announced via 8-K that Aric Chang will become chief financial officer effective October 1, succeeding Brian Peay, who is retiring after a decade in the role. Chang joins from S&P 500 constituent Public Storage, where he serves as CFO, Real Estate, and — per AHR’s release — has overseen roughly $16 billion of capital deployment across acquisitions, development, lending, and M&A.
The full filing, which includes Chang’s compensation arrangements as exhibits, is worth review by AHR holders; executive-pay terms attached to Item 5.02 filings frequently receive less scrutiny than proxy-season disclosures covering the same ground.
Filing roundup: Cisco’s annual report, a 10-Q wave, Citadel’s amended 13F, and P&G’s proxy
September 2 brought a heavy periodic-filing calendar, per EDGAR’s daily index. Cisco Systems filed its annual report on Form 10-K, and quarterly reports landed from, among others, Brown-Forman, GitLab, NetApp, Keysight, PVH, and Ollie’s Bargain Outlet. In institutional-ownership filings, Citadel Advisors LLC submitted an amended 13F-HR revising its previously reported quarterly holdings; amended 13Fs from major managers can shift the publicly visible picture of large positions and are worth comparing against the original filing.
In proxy filings, Procter & Gamble’s definitive proxy statement, filed August 28, sets up the consumer giant’s annual meeting, laying out executive compensation and the ballot items shareholders will decide. And in a quieter disclosure, Sensient Technologies filed an 8-K amending and restating its decade-old trade-receivables securitization facility with Wells Fargo and PNC — the kind of off-balance-sheet financing plumbing that rarely makes headlines but shapes working-capital risk.
Rulemaking watch: transfer agents and the march toward 24-hour trading
On the regulatory front, the Commission on September 1 proposed the first substantive overhaul of its transfer agent rules since the late 1970s and early 1980s. The proposing release would update rules and forms to reflect electronic recordkeeping, modern communications, and — notably — the use of blockchain technology in securities offerings and share transfers, per Chairman Paul S. Atkins. Comments run for 60 days after Federal Register publication.
The SEC also published the agenda for its September 17 roundtable on preparations for 24-hour trading, with panelists spanning Robinhood, NYSE, Nasdaq, Cboe, BlackRock, Virtu, Citadel Securities, DTCC, Interactive Brokers, and overnight-market operators 24X and Blue Ocean. The agenda’s framing — readiness, overnight surveillance, closing-price processes, and “Day 2” expansion toward 24×7 trading — signals that near-continuous equity trading is being treated as a question of when and how, not whether.
On TIJ’s radar
Several threads from this cycle warrant deeper investigation. First, the Lugano/CODI case: how more than a billion dollars of allegedly fictitious revenue survived audits of a listed company for four years, what CODI’s restatement reveals about segment-level controls, and what recovery investors can realistically expect. Second, the Pacific Private Money shortfall — roughly $104 million between outstanding investments and estimated recoverable assets — and where that money went. Third, the Novinger allegations, which if proven would represent solicitation conducted in defiance of a decade-old associational bar, raising questions about how effectively such bars are policed in the podcast era. Fourth, the identity and financing of GoPro’s acquirer, Action Acquisitions LLC, ahead of the merger proxy. And fifth, whatever conduct sat behind FedEx Freight’s terse termination disclosure — and whether future filings reveal clawback or severance consequences.
Methodology and fairness note: This digest is compiled exclusively from SEC filings, litigation releases, press releases, and company disclosures linked above. Enforcement matters described are allegations unless otherwise noted; defendants are presumed entitled to contest unproven claims, and several named parties consented to judgments without admitting the allegations. No parties named responded within the linked records beyond what is described, and TIJ welcomes responses from any party named, at editor@tij.news.
Featured image: façade of the U.S. Securities and Exchange Commission headquarters, Washington, D.C. Photo by David (Flickr: dbking) via Wikimedia Commons, CC BY 2.0.