McAfee Indicted for Fraud, Money Laundering Conspiracy Crimes

Former software firm founder could spend the rest of his life behind bars if convicted.


John McAfee, founder of cybersecurity software company McAfee, has been indicted on multiple charges stemming from two purported schemes relating to the allegedly fraudulent promotion of cryptocurrencies. Jimmy Watson, who served as an executive adviser on McAfee’s “cryptocurrency team,” was also charged in the indictment.

According to the allegations in the complaint, which was unsealed in Manhattan federal court, the first of the two schemes involved a fraudulent practice called “scalping,” also known as a “pump-and-dump” scheme. As part of the alleged scheme, McAfee, Watson, and other associates allegedly bought large quantities of publicly traded cryptocurrency altcoins at low market prices, knowing that McAfee planned to publicly endorse them on his Twitter account, which had approximately 784,000 followers.

After the purchases were made, McAfee allegedly published false and misleading endorsement tweets recommending the altcoins to members of the investing public in order to artificially inflate their market prices. And he did so without disclosing that he owned large quantities of the promoted altcoins, even though he gave assurances that he would disclose such information. McAfee, Watson, and other McAfee team members then sold the altcoins during the temporary, but significant, short-term market price increases that McAfee’s tweets generated.

According to the complaint, McAfee, Watson, and other McAfee team members collectively earned more than $2 million in profits from scalping altcoins, while the long-term value of the altcoins declined substantially as of a year after the promotional tweets. 

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As part of the second alleged scheme, McAfee, Watson, and other McAfee associates are accused of using McAfee’s official Twitter account to publicly tout initial coin offerings (ICOs) while hiding the fact that the ICO issuers were compensating McAfee and his team for the promotional tweets from funds provided by investors. From late December 2017 through early February 2018, McAfee, Watson, and other McAfee team members allegedly collectively earned more than $11 million in undisclosed compensation, the complaint said.

“As alleged, McAfee and Watson used social media to perpetrate an age-old pump-and-dump scheme,” FBI Assistant Director William Sweeney Jr. said in a statement. “Additionally, they allegedly used the same social media platform to promote the sale of digital tokens on behalf of ICO issuers without disclosing to investors the compensation they were receiving to tout these securities on behalf of the ICO.”

McAfee, 75, and Watson, 40, have been charged with one count of conspiracy to commit commodities and securities fraud, which carries a maximum potential sentence of five years in prison; one count of conspiracy to commit securities and touting fraud, which carries a maximum potential sentence of five years in prison; two counts of conspiracy to commit wire fraud and two counts of substantive wire fraud, each of which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 10 years in prison.

Watson was arrested in Texas in early March, and McAfee is currently being detained in Spain on separate criminal charges filed by the Department of Justice’s Tax Division.

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PNC Asset Management Names Amanda Agati CIO

Agati succeeds Mark McGlone, who is retiring April 9.


PNC Asset Management Group CIO Mark McGlone is retiring as of April 9 after a little over three years in the position and more than 10 years with the company. He will be succeeded by Amanda Agati, chief investment strategist for PNC Financial Services Group.

“We are grateful to Mark for his thoughtful, measured, and determined leadership that have been instrumental in developing our integrated investment approach and building a strong investment strategy and services organization,” Carole Brown, head of PNC Asset Management Group, said in a statement. “We are also grateful for his dedication to the firm’s strong commitment to developing industry leading talent, like Amanda, who will help lead us into the future.”

McGlone started his career at Mercantile Safe Deposit & Trust, where he was a senior vice president for 26 years, according to his LinkedIn profile. He was PNC Capital Advisor’s chief risk officer from 2010 to 2014, when he was promoted to president and CIO of PNC Capital Advisors, a role he held for nearly four years before being named CIO of PNC Asset Management Group.

Agati began her career as an investment banking analyst for Legg Mason in Philadelphia, according to her LinkedIn profile, and then joined PNC Advisors, first working as an associate investment officer and then as an equity research associate. After stints with Legg Mason Investment Council and 1919 Investment Counsel, she was named managing director, co-chief investment strategist for PNC in 2018.  

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In her new role, Agati will assume responsibility for the development and implementation of investment policies, strategies, and tactics, while also serving as a member of several internal governing bodies, including as chairwoman of PNC’s investment policy committee.

“In Amanda, we have a proven leader who has consistently demonstrated her capabilities as an investments expert and thought leader in the industry,” Brown said. “Her experience overseeing all investment strategy-related activities, spanning asset allocation guidance on client portfolios to managing the evolution of our investment process, brings incredible value to our businesses.”

Agati and McGlone will work closely over the next month to transition the CIO responsibilities.

Dan Brady, who previously served as director and client portfolio manager for PNC’s Investment Strategy Group, will succeed Agati as chief investment strategist. Prior to joining PNC, Brady worked as a consultant and senior portfolio associate for Cleveland-based Hartland & Co., now Clearstead Advisors.

PNC also named Nick Ashburn to the role of head of responsible investing. He previously served as director of responsible investing for the Asset Management Group. Ashburn and Brady will both report to Agati.

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SEC Charges Seven in $45 Million Pump and Dump Scheme

Kelly Kabilafkas allegedly promoted shares in Airborne Wireless Network, then dumped the stock.


The US Securities and Exchange Commission (SEC) has charged seven people in connection with an allegedly fraudulent scheme to gain control of a technology company, pump up its stock, and defraud investors.

According to the SEC’s complaint, Kalistratos “Kelly” Kabilafkas secretly purchased essentially all of the outstanding stock of Airborne Wireless Network, a Nevada corporation headquartered in Simi Valley, California, then distributed millions of shares to his associates and himself. The six associates have also been charged in the alleged scheme.

Airborne was originally incorporated in 2011 as Ample-Tee Inc., which sold ergonomic products, such as chairs and workstations, for the physically disabled. But in 2016, the company changed its name to Airborne Wireless Network, and later radically changed its line of business to purportedly develop, market, and license a “high-speed meshed broadband airborne wireless network by linking commercial aircraft in flight.”

Kabilafkas allegedly committed the fraud between August 2015 and at least May 2018, which culminated when he inflated the company’s stock price through multimillion dollar promotional campaigns. The SEC alleges this allowed Kabilafkas and his associates to rake in $23 million by dumping the shares, which they had bought for a fraction of that amount. At the same time, Airborne also raised more than $22 million from investors, netting a total of more than $45 million in ill-gotten proceeds for the seven accused individuals.

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One of the defendants, Jack Edward Daniels, had been reportedly installed by Kabilafkas as Airborne’s CEO; however, according to the SEC, Kabilafkas always controlled the company. Kabilafkas allegedly used Daniels to sign a form 8-K filed with the SEC that falsely stated Daniels had used his personal funds to purchase the controlling interest in the company. The filing also omitted the material information that Kabilafkas—not Daniels—was the one controlling the company. Additionally, neither Kabilafkas nor Daniels ever corrected the allegedly false statements and omissions, which the SEC said were repeated in multiple filings.

The complaint alleges Kabilafkas repeatedly made false and misleading statements, and engaged in additional deceptive conduct to conceal his involvement with, and control of, the company. He also allegedly funneled the funds he used to purchase shares through a bank account in the name of a charitable religious organization.

The SEC is seeking civil penalties, disgorgement of ill-gotten gains plus interest, and injunctive relief.

“As alleged in the complaint, Kelly Kabilafkas orchestrated a wide-ranging scheme to deceive gatekeepers, conceal from investors the true ownership of a public company, and then manipulate the company’s stock,” Jennifer Leete, associate director of the SEC’s Enforcement Division, said in a statement.  

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CIOs to Speak on Survival of the Fittest, the K-Shaped Recovery, Private Equity, and Private Credit March 16 and 17 

Register now to attend four not-to-miss panels.

The COVID-19 remote environment doesn’t mean you have to stop networking and learning from your peers. In fact, now you can invite your entire investment office to tune into panels where CIOs will be sharing their wisdom on everything from the survival of pension plans to the effects of wealth disparity, private equity, and private credit.

On March 16 at 2 p.m. EDT, top-performing CIOs in private credit and private equity Molly Murphy of the Orange County Employees Retirement System (OCERS) and Michael Donovan of Notre Dame will discuss what they’re seeing in this environment and what opportunities they’re anticipating.

Then, on March 17, we’ll have a full day of panels as part of our “Inside the Minds of CIOs” conference to examine the theme of the K-shaped recovery and the years beyond it. Our economy, with the slowdown of business in travel, entertainment, hospitality, and food services, and the boom in technology, retail, and software services, is bifurcating. Food pantry lines are lengthening as the stock market surges upward. Lower-wage workers are suffering the most, while saving the least. We’ll be exploring the big questions and considering the long and short-range repercussions.

The conference will start at 10:55 a.m. EDT, when CIOs Mansco Perry of the Minnesota State Board of Investment, Carlos Rangel of the W.K. Kellogg Foundation, and Tim Recker of the James Irvine Foundation explore the possible impact of social and economic inequity on the prosperity of the American economy and markets, as well as on retirement funds.

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We’ll have a fireside chat at 12:30 p.m. EDT with special guest economist Dambisa Moyo to discuss the value of the dollar. This discussion will help you discern whether you should tilt toward domestic or international, and why; toward growth or value, and why; and toward small cap vs. large cap, and why.  

At 2 p.m. EDT, Melissa Waller, president, AIF Global Institute at Alternative Investments Forum (AIF), will moderate a panel exploring the survival of pension plans in years to come, with a special presentation by CIO Dominic Garcia of the New Mexico Public Employees Retirement Association (PERA) and full discussion with Andrew Palmer, chief investment officer, Maryland State Retirement and Pension System; Clint Coghill, CEO, Backstop; and Shivin Kwatra, head of LDI Portfolio Management – US, Insight Investment.

These are two events, with two different registrations. Invite your whole investment team to register for discussions that will add to your acumen.

Register for the K-shaped recovery day conference here.

Register for the private credit and private equity webinar here.

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DOL Will Not Enforce Final Rules on ESG, Proxy Voting

The federal agency will revisit the disputed regulations, enacted in the final days of the Trump administration. 


The US Department of Labor (DOL) on Wednesday said it will not enforce two widely disputed final rules on proxy voting and environmental, social, and governance (ESG) investing in retirement plans subject to the Employee Retirement Income Security Act (ERISA).

The federal agency said it plans to revisit those guidelines, which were enacted in the final days of the Trump administration. 

The decision comes after an executive order from President Joe Biden, who called on federal agencies to review any existing regulations that go against tackling climate change. Any rules that do not comply with the policy change should be reviewed, the order says. 

The DOL is planning to revisit both rules that were highly criticized from stakeholders, who considered the guidelines confusing and restrictive. The two rules at the heart of the matter are called the “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” and “Financial Factors in Selecting Plan Investments.” 

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Last summer, an early iteration of the financial factors rule from then-Labor Secretary Eugene Scalia that was especially restrictive on ESG drew more than 1,100 letters during a 30-day comment period, from asset managers, plan sponsors, service providers, organization groups, and others. Many protested the proposal. 

ESG investments have been rising in popularity among investors for several years, but they have also faced pressure from critics who worry that they advance social causes to the detriment of financial returns.

ESG supporters have said seeking good investment returns and promoting ESG precepts are not in conflict, and stakeholders have questioned whether these rulemakings were rushed unnecessarily, saying they failed to adequately consider and address the substantial evidence that ESG considerations improve investment value and long-term investment returns for retirement investors.

In October, the DOL announced a final financial factors rule that eased its stance on ESG investing, arguing sustainability factors could be financially material in some cases for investments. 

Unmollified, investor proponents of ESG argued that the rules have already had a “chilling” effect on sustainable investments, even “in circumstances that the rules can be read to explicitly allow,” according to the DOL statement. 

“These rules have created a perception that fiduciaries are at risk if they include any environmental, social, and governance factors in the financial evaluation of plan investments, and that they may need to have special justifications for even ordinary exercises of shareholder rights,” Principal Deputy Assistant Secretary for the Employee Benefits Security Administration (EBSA) Ali Khawar said in a statement. 

The decision to suspend enforcement of the Trump-era rules did not come as a surprise to fiduciary experts, who said it gives the DOL time to evaluate whether it should attempt new rules. 

The DOL’s final rule on proxy voting, released in December, maintained that private plan fiduciaries should refrain from voting on matters that are not financially material to the plan. The department could now go on to issue additional guidance easing the compliance burden for proxy voting and exercising other shareholder rights, according to George Michael Gerstein, co-chair of the fiduciary governance group at law firm Stradley Ronon. 

“I would not be surprised to see that,” Gerstein said. “The net effect of it would be perhaps greater willingness of plan fiduciaries to support various shareholder proposals.” 

Still, proxy voting will continue to face scrutiny from both the DOL and the Securities and Exchange Commission (SEC). The agencies could review whether some cases are appropriate to vote on, according to Gerstein. 

“I think that those concerns are going to remain part of the dialogue,” Gerstein said. 

The trend to incorporate ESG factors that are material to investments will also continue among corporate plan fiduciaries, Gerstein said. Wider adoption of sustainable investments will be determined more by their performance in the markets than by language from the federal agency, the attorney said. 

“That’s unaffected by any of this,” he said. 

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Vaccine Elation Will Lead to the Market’s Fall, BofA Sage Warns

The S&P 500’s happy days are numbered, with investors blind to Washington overreach, says Michael Hartnett.


The vaccine rollout has been a tonic for the US stock market. But maybe the good news on jabs will provide some bad market jolts. Reason: The wonderful tidings are priced in and some gathering problems could derail the advance.

That’s the thinking of Michael Hartnett, Bank of America’s chief investment strategist. The giddiness of the market’s climb and the ill effects of the $1.9 trillion in new federal aid, which Congress just passed, will bring a downdraft sooner rather than later, he warned in a client note.

This is a case where there’s a “good news is bad news narrative,” he wrote. Although the S&P 500 has slipped since mid-February, it has risen again for the past three out of four sessions, increasing 0.6% Wednesday. For the year, the index is up 3.8%, and since its plummet 12 months ago as the pandemic appeared, it is ahead 70%.

To Hartnett, that spells frothiness. Further, he admonished, the onset of mass inoculations may have given US investors too much investment euphoria. He pointed to the situation in Israel, the world’s vaccination leader with 82% of the eligible population getting shots. The TA Main 125 index, the most popular gauge for Israeli shares, had a strong rally starting last spring and continuing through January—then stalled out. It’s off 2.8% since its Jan. 20 peak.

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The market’s behavior in Great Britain, where vaccinations also are relatively widespread (32% of the population), tells the same tale, Hartnett argued. He focused on Britain’s mid-cap index, which covers mostly domestically oriented stocks, as opposed to the multinationals that dominate the main index, the FTSE 100. The midcap FTSE 250, after peaking Feb. 16, has been flat.

The two indexes are “stalling on good news,” he contended. The same thing could happen to US stocks, Hartnett said. While the US has the most confirmed cases and deaths from COVID-19, its vaccination drive is progressing well. Among large countries, America is fourth best, with 18.8% of the population receiving shots.

Nonetheless, Hartnett is troubled by Washington’s enormous efforts to boost the US economy, which remains mired in recession. Since last spring, the three rounds of federal relief spending (including the program awaiting President Joe Biden’s signature) have totaled more than $4.5 trillion. On top of that, the Federal Reserve has been buying $120 billion in Treasurys and agency mortgage bonds monthly, with no intention of easing off the pace.

The result, Hartnett maintained, is the “mother-of-all asset bubbles” because of a fiscal “policy overshoot inciting Wall Street price overshoot.” That sentiment is reminiscent of the storied 1996 remark warning from Alan Greenspan, then the Fed chair, that the market was in the throes of “irrational exuberance.”

While Greenspan was counseling caution, today’s central bank is taking the opposite tack, Hartnett observed. The Fed, he declared, actually “wants Wall St irrational exuberance.” This, he went on, all will lead to higher interest rates, bond yields, commodity prices—and a lower US dollar.

Hartnett’s jeremiad is summed up in what he called the “3Rs” of higher rates, more regulation, and aggressive redistribution of wealth. All this, in turn, would lead to a trimming of corporate earnings, as well as falling tech stocks and corporate bond prices, he said.

For this year, Bank of America projects a 3,800 price target for the S&P 500. From yesterday’s close, that would amount to a 2.5% price slide. Cold comfort, for the entire year, the index would be up an uninspiring 1.2%.  

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UN’s Herman Bril Named Arabesque CEO of Asset Management

After serving as the CIO of the United Nations Joint Staff Pension Fund since 2016, he takes the helm of the UK asset manager in July.


London-based Arabesque Asset Management, which focuses on sustainable investing, has named United Nations Joint Staff Pension Fund (UNJSPF) CIO Herman Bril to be its new CEO, effective in July.

Bril will be responsible for Arabesque’s global asset management business and its suite of artificial intelligence (AI)-driven sustainable investment products and solutions, including the firm’s net-zero climate investment strategy that will launch later this year. He will be based at the company’s new headquarters in London.

Bril, who joined UNJSPF as CIO in 2016, developed and implemented the fund’s sustainable investment strategy, and its assets under management (AUM) grew to $82 billion from $52 billion during his nearly five-year tenure.

“Technology and data are playing a key role in reshaping sustainable investing, spurring market transformation away from industrial-era concepts towards future-fit models and new horizons,” Bril said in a statement.  “Arabesque can help drive change through its autonomous, sustainable investment products and solutions.”

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The UNJSPF has not yet named a successor to Bril. In January, the fund placed a job listing for a new CIO that closed Feb. 21.

Prior to becoming CIO at the UNJSPF, Bril was group chief financial officer (CFO) and managing director at Cardano Risk Management for nearly seven years, and prior to that was senior vice president, head of treasury and capital management at Aegon NV.

He was also previously CIO of Dutch insurance firm Interpolis, and was also head of asset management and CIO of Syntrus Achmea Asset Management, where he was responsible for Dutch pension funds with assets under management of €45 billion ($53.6 billion). Bril started his career at Deutsche Bank in Amsterdam, where he was a fixed income derivative trader.

Arabesque also named Ulrika Hasselgren, former global head of sustainability and impact investment at Danske Bank, as the group’s new head of Nordics as well as head of Europe for corporates and sovereigns.

In addition to overseeing Arabesque’s range of environmental, social, and governance (ESG) data and insight services for corporate and sovereign clients in Europe, Hasselgren—who will be based in Stockholm—will lead the group’s activities and expansion in the Nordic region.

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COLA Freeze Removed from Pension Bailout Plan

American Rescue Plan Act amendment from Chuck Schumer removes cost-of-living adjustment freeze.


The American Retirement Association (ARA) has successfully lobbied to have a provision removed from the latest COVID-19 relief bill that would have frozen the annual cost-of-living adjustments (COLAs) for overall contributions to defined contribution (DC) plans and for the maximum annual benefit under a defined benefit (DB) plan, effective for calendar years beginning after 2030.

A substitute amendment to the $1.9 trillion American Rescue Plan Act of 2021, submitted by Senate Majority Leader Chuck Schumer, D-New York, removed the COLA freeze limit from the bill (H.R. 1319). The bill— without the COLA freeze—was passed by the Senate on Saturday.

“This was a tremendous victory for the ARA and the retirement plan system,” ARA CEO Brian Graff said in a statement. “The government affairs team worked tirelessly to make this happen knowing that it would have been extremely challenging to get this fixed in the future, especially without the support of unions, which were exempted from the freeze.”

The ARA argued that if the freeze had been included in the bill, the qualified retirement plan contribution and benefit limits would have decreased significantly because they would have failed to keep up with the increase in the cost of living. The ARA also said the freeze would have reduced the incentive for employers to offer a qualified retirement plan and could cause some employers to terminate their plans.

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In an interview with CIO, Graff said that while “there’s no question” the pension reform is going to help very underfunded union plans of coal miners and teamsters, he also said it is “a little more limited in its application” than previous pension reform plans as “there’s nothing on defined contribution plans” in the bill.

However, Graff cited legislation introduced by Sen. Ron Wyden, D-Oregon, in December that he said the ARA is “excited about” and which would fill that void. The bill would restructure the existing, nonrefundable saver’s credit into a refundable, government-matching contribution of up to $1,000 a year for workers who save through 401(k)-type DC plans or individual retirement accounts (IRAs). The legislation also includes a COVID-19 recovery bonus credit that provides up to $5,000 in additional government matching contributions for the first $10,000 saved during a five-year period beginning in 2022.

The COVID-19 relief bill is back in the House, which is expected to approve the amended Senate version as soon as today.

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