SEC control failures, FDA's nonclinical-testing rule, and a $127M truck-leasing Ponzi — September 22–28, 2026

The week of September 22–28, 2026 produced twenty-five items across the three agencies: eleven SEC developments, ten FDA actions, and four FTC developments. Two SEC cases filed on September 21 are carried here with their original dates because last week's edition closed before those filings landed: the Wavemark Capital mobile-home case and the PetIQ insider-trading case.

For a compliance or legal team, the week splits two ways. The FDA's rewrite of its nonclinical testing language and the FTC's advance notice on impersonation advertising are the items that invite a written comment, with the FDA's window closing on December 7. Everything else is a matter to read for control failures, money at stake, and procedural posture.

On September 22 the Commission censured OTC Link LLC, the New York broker-dealer that operates the OTC Link ATS for over-the-counter securities, and ordered it to pay a $575,000 civil penalty. The settled order finds that between August 2016 and March 2025 the firm failed to establish, maintain and enforce written policies and procedures required by Regulation Systems Compliance and Integrity for the alternative trading system, covering system security, access control, and application vulnerability management, testing and remediation. Division of Examinations staff examined the system several times during that period and each time flagged required policies that the firm had left unwritten or in draft; the order finds that OTC Link repeatedly failed to remediate. 1 The order charges violations of Rules 1001(a)(1), 1001(a)(2) and 1001(a)(3) of Regulation SCI, and the firm agreed to a cease-and-desist order, the censure and the penalty without admitting the findings. 26

"We repeatedly flagged it" is the sentence worth carrying into an internal review. Laura D'Allaird, chief of the Division of Enforcement's Cyber and Emerging Technologies Unit, said the firm's failure to remediate after repeated examination findings "reflects a disregard for their findings and the overall examinations process." 1 The difference between an examination finding that was acknowledged and one that was closed out is the difference this order turns on.

Truist Advisory Services, Inc., the Atlanta investment advisory firm, settled a separate matter the same day for $200,000. The order finds that from March 3 to August 1, 2023, one of its representatives used the firm's trade correction process to cancel ten losing trades from his personal brokerage account and rebill them to four advisory clients, moving $503,659 of unrealized losses onto those clients. Truist approved the ten correction requests without considering that the trades were being moved out of the representative's personal account, and without following its own policy of monitoring for a representative's pattern of trading errors. The order finds violations of Sections 206(2) and 206(4) of the Investment Advisers Act and Rule 206(4)-7, and Truist agreed to a cease-and-desist order, a censure and the penalty. 227

The SEC charged CMI Capital LLC and its founder and manager, Michael D. Williams of Port St. Lucie, Florida, on September 23. The complaint alleges that from October 2023 through August 2024 Williams raised about $860,000 from at least 18 investors, many of them current or retired South Florida law enforcement officers, by telling them a fund he controlled held a portfolio of more than $5 million and had returned more than 140 percent. Many of the investors knew Williams through his work for a third-party police and firefighter pension plan administrator. According to the complaint, he sent investors cropped screenshots of graphics showing trading profits and misappropriated about $384,000 for credit card balances, a sports car and vacations; he began repaying investors in August 2024 and has repaid more than $375,000. The defendants agreed to a bifurcated settlement, subject to court approval, with disgorgement and civil penalties to be set by the court and an associational bar to follow. 328

The truck-leasing case filed the next day is an order of magnitude larger. On September 24 the Commission filed settled charges in the Middle District of Florida against Kristopher A. Lunsford and his companies AKL Transport LLC and Southern Truck Leasing LLC. The complaint alleges that from at least May 2023 through May 2025 the defendants and their sales agents raised at least $127 million from about 765 investors by promising to buy commercial semi-trucks at a discount and to run the trucking business for them, and by telling investors the group owned and operated about 2,000 trucks. Investors were promised a net weekly return of $1,250 per truck assigned to them over a five-year term, roughly 260 percent a year, presented as transport fees. The complaint alleges that about $52 million, roughly 40 percent of deposits, went to earlier investors and that Lunsford misappropriated about $33 million for himself, including nearly $10 million in cash withdrawals, about $6.2 million on travel, bars and nightclubs, and at least $1.9 million in casino-related expenses; the 2,000-truck figure was materially overstated. The defendants consented to bifurcated judgments, subject to court approval, leaving disgorgement, interest and penalties to be decided on the Commission's motion. The U.S. Attorney's Office for the Middle District of Florida announced parallel mail and wire fraud charges on September 25. 629

The mobile-home case carried here from September 21 has the same shape at a smaller scale. The Commission filed settled charges in the Western District of Texas against Wavemark Capital, LLC and its founder and chief executive, Michael Ayala of Austin, alleging that from about October 2021 through February 2025 they raised about $9.6 million from nearly 100 investors through Wavemark Income Fund, LLC by promising 12 to 14 percent annualized returns from mobile-home rentals and sales. The complaint alleges the defendants bought no mobile homes, used new money for Ponzi-like payments, and spent investor funds on sales commissions, debts and the operating costs of Ayala's affiliate entities. The consent judgments, subject to court approval, would order $8,817,909 in disgorgement and $736,725 in prejudgment interest on a joint and several basis, plus a $236,451 civil penalty against Ayala. 930

On September 25 the Commission announced settled insider-trading charges against three Michigan residents who traded ahead of the August 5, 2025 announcement that Y-mAbs Therapeutics, Inc. would be acquired by SERB Pharmaceuticals through an all-cash tender offer. The orders find that Venar Ayar learned the deal information from his law firm partner, whose spouse worked on the acquisition for SERB, and passed it to his brother Vincent Ayar and his cousin Johnathan Denha with advice to trade. On August 4, 2025, Vincent Ayar bought 1,847 Y-mAbs shares and Denha bought 6,200; Denha also had another cousin buy shares. Y-mAbs closed 103.34 percent higher on the announcement day, producing profits of $7,831.25 for Vincent Ayar, $25,604.65 for Denha and $808.96 for the other cousin. All three consented to cease-and-desist orders: Venar Ayar pays a $34,244.86 civil penalty; Vincent Ayar pays $7,831.25 in disgorgement, $274.72 in interest and a $7,831.25 penalty; Denha pays $25,604.65 in disgorgement, $898.20 in interest and a $26,413.61 penalty. The orders find violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3(a). 731

The PetIQ case, also filed September 21 and carried here, involves a family relationship rather than a professional one. The complaint alleges that Michael T. Christensen of Boise, Idaho bought PetIQ stock and options on material nonpublic information from his brother, then a PetIQ senior executive involved in the company's negotiations with the private equity firm Bansk Group LP. The two vacationed together from late June into early July 2024 while those negotiations were live; Christensen bought shares and options in July and August 2024 through the day before the August 7, 2024 announcement, when PetIQ's stock rose 48 percent and he made about $299,000. Christensen previously pleaded guilty to securities fraud in a parallel criminal case, and the SEC seeks an injunction, disgorgement with interest, and a civil penalty. 1032

A 2022 case moved toward its close on September 22, when the Commission announced proposed final judgments for Lawrence Billimek and Alan Williams filed in the Southern District of New York on September 17. The complaint, filed on December 14, 2022, alleged a front-running scheme running from at least September 2016: Billimek, employed by a major asset management firm, told Williams about large market-moving trades before they were executed, and Williams traded the same securities the same day and closed the positions after the price moved. The alleged profits were about $47 million. The proposed judgments, subject to court approval, order $12,684,000 in disgorgement against Billimek and $34,627,659 in disgorgement plus $12,027,557.75 in prejudgment interest against Williams, all deemed satisfied by the criminal forfeiture order in the parallel case, United States v. Billimek and Williams. 833

The fourth case turns on fees rather than a tip. On September 24 the Commission settled charges against Keith R. Gebert, founder and sole owner of Rightbridge Private Capital LLC, formerly a New Jersey-registered investment adviser. The order finds that from October 2020 through March 2023 Gebert advised about 36 clients to put about $10 million into a private real estate fund, and received more than $500,000 in referral fees from a real estate company affiliated with that fund without disclosing the payments. The fund later ceased all operations and nearly all of his clients have been unable to recover their investments. Gebert agreed to a cease-and-desist order, a bar from association with investment advisers, brokers, dealers and investment companies, $509,350 in disgorgement, $135,138 in prejudgment interest and a $150,000 civil penalty. 534

The proposed final judgment for Manish Lachwani, filed September 24 in the Northern District of California, closes out charges the Commission brought on August 25, 2021. The complaint alleged that from at least 2018 through 2020 Lachwani, as chief executive of HeadSpin, inflated the company's valuation beyond $1 billion by overstating the value of customer deals, treating deals still under discussion as guaranteed future payments, and creating fake invoices while altering real ones to make the amounts look billed. A board investigation revised HeadSpin's valuation from $1.1 billion down to $300 million. Under the consent judgment, still subject to court approval, Lachwani would be permanently enjoined from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, barred from serving as an officer or director, and restricted from participating in securities offerings outside his personal accounts. 435

Away from enforcement, the SEC's Division of Economic and Risk Analysis published updated market statistics on September 23. In the first half of 2026 there were 208 initial public offerings raising more than $137 billion, against 180 IPOs raising more than $27 billion in the first half of 2025, an increase of about 16 percent in count and nearly 400 percent in proceeds. Follow-on registered offerings ran to 557 raising more than $111 billion, against 505 raising nearly $84 billion a year earlier. 36 The underlying series is published as interactive charts on the Commission's statistics page. 37

The FDA's most consequential item this week is a vocabulary change with a compliance deadline attached. On September 21 the agency announced a direct final rule, published in the Federal Register on September 22 at 91 FR 59988, that replaces references to "animal tests" and "animal studies" with "nonclinical tests" and "nonclinical studies" across the regulations governing investigational new drugs, new drug applications and biologics license applications. The rule defines the new terms in line with the Food and Drug Omnibus Reform Act of 2022 and removes language that could be read as making animal testing the only acceptable way to generate safety evidence. Animal studies remain available as before, the evidentiary standards are unchanged, and the rule imposes no new requirements or costs on drug developers. 1112

Because the agency issued the change as a direct final rule, it published a companion proposed rule at the same time and will use that proposed rule if it receives significant adverse comments: the comment period closes on December 7, 2026, and the rule takes effect on February 4, 2027 if nothing significant arrives. Sponsors with standard operating procedures, study protocols or contracts that still use the old vocabulary should decide whether to comment and, separately, whether to update their templates. 1238

Acting FDA Commissioner Kyle Diamantas framed the change as flexibility for developers. "Our goal is not to replace one rigid approach with another," he said in the announcement. "It is to support rigorous, modern science — including animal studies when they remain appropriate and validated alternatives when they can provide the evidence needed to protect patients." 11 Alongside the rule, the agency opened a database of New Approach Methodologies use cases drawn from public review materials, starting with 25 examples. 39

A federal court in the District of Minnesota entered a consent decree of permanent injunction, dated September 21 and announced by the FDA on September 23, against Gold Star Distribution, Inc. and its owner Bassam Abu Samrah. The decree stops the Minneapolis warehouse operator from receiving, holding for sale or distributing food including dietary supplements and infant formula, drugs, medical devices and cosmetics from any current or future location until it complies with the Federal Food, Drug, and Cosmetic Act, federal regulations and the decree itself. The complaint, filed by the Department of Justice on the FDA's behalf, alleges products became adulterated while held for sale under insanitary conditions, and that drugs were stored outside current good manufacturing practice. 13

The inspection history is the useful part for third-party storage programs. Before the 2025 inspection, the FDA had inspected the facility five times and the Minnesota Department of Agriculture had inspected it 26 times between 2013 and 2025, with findings that included live and dead rodents, gnaw marks, package damage, rodent excrement and nesting materials. During a follow-up inspection in November and December 2025, investigators observed nine live rodents, 17 dead rodents in various states of decay, eight live birds, one dead bird and five live worms, along with rodent excreta, urine stains, gnaw holes and nesting material around pallets of rice, cat food, drugs, sanitary pads and cosmetics; laboratory analysis confirmed rodent urine, urea, excreta and hairs in product packaging. The decree requires an independent expert to write and implement sanitation control and drug storage plans, elimination of pests and filth, facility renovation, supervised destruction of the products on hand, and written FDA clearance before operations resume. 13

The FDA posted a batch of warning letters on September 22, with issue dates running from June 1 to September 11. Two concern human drugs and biologics. The first, issued September 11 by the Center for Biologics Evaluation and Research, tells NexCell Scientific Inc of Irvine, California that its umbilical cord blood-derived total nucleated cell product, sold for allogeneic use, is an unapproved new drug under section 505(a) of the Federal Food, Drug, and Cosmetic Act and an unlicensed biological product under section 351(a)(1) of the Public Health Service Act. The letter walks through why the product fails the homologous-use criterion and the 21 CFR 1271.10(a)(4) criterion, quoting the company's website claims about cell allografts, mesenchymal stem cells and inflammation. 40

The second, issued September 8 by the Center for Drug Evaluation and Research, covers kdc/one Chatsworth, Inc. of Chatsworth, California, reference 320-26-124, after an inspection from March 31 to April 3, 2026. The letter cites failures under 21 CFR 211.165(a) and 211.166(a): the firm had no adequate finished-product specification testing before release and no adequate stability program, and it shipped at least one batch of an over-the-counter drug product without testing for a degradant that can form a known carcinogen. The letter also notes that the firm knew a customer had recalled products made with the same formulation, packaging and labeling in Canada, and faults it for failing to establish whether the implicated batches had also been distributed in the United States. The published letter uses redaction markers in place of the active ingredient and the chemical names, so the product at risk has to be identified from other agency records. 41

The rest of the September 22 batch covers food, devices and supplements. Six of the letters apply the Foreign Supplier Verification Program to importers — Union Trade Inc., Quantum Star LLC, Shouly Import Corp., Ohom Padmaavathii, LLC, LDNN Produce Inc. and Yam Man Foods LLC — and the remaining letters go to Binh Minh Tofu for preventive-control failures, BioDrive, Inc. over a dietary supplement, Lion Street Medical, doing business as Pensar Medical LLC, over medical device reporting and misbranding, and Raaw Energy LLC and Viva Raw LLC over adulterated animal food. 18

Lirafugratinib received approval on September 23 under the brand name Lyrfigtu, from Elevar Therapeutics, for adults with previously treated unresectable, locally advanced or metastatic cholangiocarcinoma whose tumors carry a fibroblast growth factor receptor 2 gene fusion or other rearrangement. The supporting trial, REFOCUS (NCT04526106), enrolled 116 patients who had not previously received an FGFR inhibitor and had been treated with chemotherapy or chemoimmunotherapy; the objective response rate was 46 percent (95 percent confidence interval 36 to 55) with a median duration of response of 11.8 months. The recommended dose is 70 mg once daily. Labeling carries warnings for ocular toxicity, hyperphosphatemia with soft tissue mineralization, and embryo-fetal toxicity; the review used the Real-Time Oncology Review pilot and priority review, and the drug holds breakthrough therapy and orphan drug designations. 14

Belzutifan (Welireg, Merck) with lenvatinib (Lenvima, Eisai) followed on September 24 for adults with advanced renal cell carcinoma with a clear cell component whose disease progressed on or after a PD-1 or PD-L1 inhibitor or within six months of adjuvant therapy with a PD-1 inhibitor. In LITESPARK-011 (NCT04586231), 747 patients were randomized to the combination or to cabozantinib. Median progression-free survival was 14.6 months against 10.6 months (hazard ratio 0.74, 95 percent confidence interval 0.61 to 0.89), and the objective response rate was 53 percent against 40 percent. Overall survival did not reach statistical significance, at a median of 33.7 months against 28.6 months (hazard ratio 0.85, 0.70 to 1.03). The recommended dose is lenvatinib 20 mg with belzutifan 120 mg once daily; belzutifan's label carries a boxed warning for embryo-fetal toxicity, and the combination adds cardiac dysfunction to the warnings for anemia and hypoxia. 15

Two further approvals were posted to the FDA's drug news page on September 25. Atebrioz (zilurgisertib) tablets were approved to reduce the volume of total new heterotopic ossification in adults and children 12 and older with fibrodysplasia ossificans progressiva, the third treatment for the condition. Mirum Pharmaceuticals licensed the once-daily oral ALK2 inhibitor from Incyte and expects to launch it in the United States in October. 42 In the PROGRESS trial of 63 patients, the treated group had an average decrease of 3.2 cm³ in new heterotopic ossification volume at week 24 while the placebo group increased by 24.6 cm³, measured by whole-body CT, and the effect held through week 48 of the open-label extension. The starting dose is 100 mg once daily; common side effects include headache, joint pain, upper respiratory infection, nosebleeds and nausea. It received fast track, priority review and orphan drug designations, and the FDA issued Incyte a rare pediatric disease priority review voucher with the approval. 164243

Gazyva (obinutuzumab), from Genentech, was approved to reduce relapse risk in adults and children aged 2 and older with frequently relapsing or steroid-dependent, childhood-onset idiopathic nephrotic syndrome who are in remission. The INSHORE trial (NCT05627557) randomized 85 patients in complete remission to intravenous obinutuzumab on days 1 and 15 and weeks 24 and 26, or to twice-daily oral mycophenolate mofetil. The primary endpoint was a first-morning urine protein-to-creatinine ratio of 0.2 g/g or less at week 52 with no relapse from week 8 onward, and the FDA reports a significantly greater proportion meeting it in the obinutuzumab group; the sponsor puts the result at 95 percent against 73 percent on mycophenolate mofetil, and describes Gazyva as the first FDA-approved treatment for the condition in 70 years. 44 The label carries boxed warnings for hepatitis B virus reactivation and progressive multifocal leukoencephalopathy, and the most common side effects are infections, infusion-related reactions and neutropenia. The approval came with breakthrough therapy, orphan drug and priority review designations. 17

The FDA published a draft guidance on premarket submissions for robotically-assisted surgical devices on September 25, with comments due November 24, 2026. 19 A public meeting notice on reauthorization of the Biosimilar User Fee Act, also published September 25, takes written comments until November 25, 2026. 20 And a request for information on improving patient access to deceased donor islet cells and cell products, published September 24, closes November 9, 2026. 21

On September 24 the Commission announced an advance notice of proposed rulemaking asking whether to update the Rule on Impersonation of Government and Businesses, or to act in some other way, to stop online platforms from running ad-optimization practices that help impersonation scams reach consumers. The notice asks how platforms' ad tools optimize content and delivery, what financial incentives drive them, what steps platforms already take to prevent deceptive use, whether that conduct amounts to unfair or deceptive acts or practices, and whether the Commission should amend the existing rule, propose a separate one or use non-regulatory measures. It also asks about measures such as vetting advertisers, monitoring posted ads, investigating suspected scam ads, removing confirmed ones and disciplining offending advertisers. 22

The Commission's stated basis is volume. In 2025 it received more than one million reports about imposter scams, with reported losses of nearly $3.5 billion, and nearly 30 percent of consumers who reported losing money said they were first contacted on a social media platform, with reported losses of $2.1 billion. Christopher Mufarrige, director of the Bureau of Consumer Protection, described today's impersonation scams as "sophisticated, highly engineered operations powered by the same advertising and targeting tools that platforms sell to legitimate businesses." The Commission voted 2-0 to submit the notice for publication. The comment deadline is 60 days after the notice appears in the Federal Register, which as of September 28 was still pending; the window will close in late November if publication follows the usual pattern. 22

Two Federal Register notices published on September 24 amend the Commission's Rules of Practice at 16 CFR parts 0 through 4 and parts 4 and 5, aligning them with the FTC Act and with organizational changes that include the creation of the American Competition Enforcement Division, and correcting a set of minor errors and omissions from the previous version. Both are effective September 24, 2026, with one caveat: the Commission may decide that applying amended 16 CFR 2.20 in an investigation already pending on that date would not be feasible or would create an injustice. The vote was 2-0. 234546

On September 22 the Commission announced that its Office of Policy Planning and Bureau of Competition had filed a comment, submitted the previous day, endorsing the Department of Education's proposal to simplify recognition of new higher-education accreditors. The comment argues that accreditation monopolies raise tuition, limit consumer choice and stifle innovation, and offers as an illustration that 21 of the 27 commissioners on the Middle States Commission on Higher Education are university administrators or faculty. It also singles out the American Bar Association's law school accreditation role. The Commission vote authorizing the filing was 2-0. 2447

The FleetCor proposed consent order, the $100 million settlement announced on September 17, was published for public comment on September 22. Comments close on October 22, 2026. 25

The FTC's impersonation notice is the one open window without a fixed date. The deadline runs 60 days from Federal Register publication, which was still pending as of September 28; the window will close in late November if publication follows the usual pattern.

The week's enforcement items sit at different stages, and the stage decides what a compliance team can do with each one. The OTC Link, Truist Advisory and Gebert orders are settled administrative orders: they state findings, impose penalties and are in effect now. The Ayar, Denha and Vincent Ayar orders are of the same character, arising from the Commission's market-surveillance analysis. Two matters — the CMI Capital and Wavemark cases, and the Lunsford truck-leasing case — sit at the consent stage, with judgments signed off by the defendants and waiting on court approval, which is why disgorgement and penalties in those three cases remain open figures. The Lachwani matter is a proposed final judgment in a case first filed in 2021, and the Billimek and Williams judgment is unusual in that its disgorgement is deemed satisfied by the criminal forfeiture already ordered in a parallel proceeding. On the regulatory side, the FDA's nonclinical testing rule has a fixed comment date and a fixed effective date, and the FTC's Rules of Practice amendments are already in force.