SEC v. David A. Harbour (D. Ariz. July 31, 2018, Settled)

Action against Defendant, an individual, in connection with an alleged scheme to misappropriate investor funds.  The SEC alleges that the Defendant made material misrepresentations about the use of investor money as the Defendant allegedly told investors he would put the funds towards payday loan enterprises.  However, the SEC alleges the Defendant used investor funds for personal expenses instead.  Defendant has agreed to pay $1,535,000 in disgorgement, $97,072 in prejudgment interest, and a $1,535,000 civil penalty. ... Continue Reading

In re Brandon T. Neff (A.P. July 31, 2018, Settled)

Action against Respondent, an individual, in connection with an alleged scheme to use an unregistered broker-dealer to collect commissions from investors related to sales of an investment vehicle controlled by Respondent and associated persons.  The SEC further alleges that Respondent made misrepresentations to investors regarding his experience, the status of the broker-dealer, the underlying investment, and use of investor funds.  Respondent has agreed to pay a $5,000 civil penalty.

SEC Order ... Continue Reading

In re R.J. O’Brien & Associates, LLC (July 30, 2018, Settled)

Action against Respondent, a registered Futures Commission Merchant, in connection with alleged failure to supervise a client’s alleged misallocation of executed bunched orders.  The CFTC alleges that, despite various red flags, Respondent failed to monitor its client’s use of Respondent’s trading platform to execute bunched orders and improperly allocated the bunched orders post-execution.  Respondent has agreed to pay a civil penalty in the amount of $600,000.

CFTC Order

CFTC Press Release ... Continue Reading

SEC v. Axesstel, Inc., et al. (S.D. Cal. June 28, 2018, Settled)

Action against Defendants, a telecommunications equipment company, its CEO, its CFO, and its director of sales, for allegedly misstating revenue in the Company’s financials.  The SEC alleges that Defendants recognized revenue on non-existent purchases and purchases that were not finalized, and also inflated the unit prices associated with sales.  The SEC further alleges that Defendant executives made material misrepresentations to the company’s auditors.   Defendant CFO has agreed to pay a penalty of $40,000 and to ... Continue Reading

SEC v. Howard M. Appel (E.D. Pa. July 27, 2018, Settled)

Action against Defendant, an individual, in connection with an alleged market manipulation scheme of certain microcap stocks.  The SEC alleges that Defendant orchestrated coordinated and matched stock trades to give the appearance of increased liquidity.  The SEC further alleges that Defendant engaged in a “pump-and-dump” scheme to increase the price of the stock and then sell it at a profit.  Defendant has agreed to a bar as an officer of a public company and to ... Continue Reading

CFTC v. JAFX, Ltd. (July 27, 2018, Contested)

Action against Defendant, an unregistered retail foreign exchange dealer, in connection with alleged failure to register as a forex dealer.  The CFTC alleges that Defendant failed to register as a retail forex dealer as required and did not provide U.S. customers with Risk Disclosure Statements as required.

CFTC Complaint

CFTC Press Release ... Continue Reading

SEC v. John A. Paulsen (S.D.N.Y. July 26, 2018, Contested)

Action against Defendant, managing director of a registered broker-dealer, in connection with an alleged “pay-to-play” scheme involving a senior employee of the New York State Common Retirement Fund.  The SEC alleges that Defendant provided gifts and entertainment in exchange for the Fund’s bond trading business.  The SEC further alleges the Defendant and related parties made material misrepresentations to internal investigators regarding expenses and the relationship.  Parallel criminal actions have been announced against related parties.

SEC ... Continue Reading

SEC v. Richard T. Cunniffe (S.D.N.Y. July 25, 2018, Settled)

Action against Defendant, managing director of a registered broker-dealer, in connection with an alleged insider trading scheme.  The SEC alleges the Defendant placed trades on behalf of an investment banker and the investment banker’s father in Defendant’s personal brokerage accounts while in possession of material nonpublic information provided by the investment banker.  The SEC further alleges that the three individuals shared the profits from these trades.  Defendant has agreed to pay disgorgement and prejudgment interest.  ... Continue Reading

SEC v. Matthew Brunstrum and Susan Brunstrum (N.D. Ill. July 24, 2018, Settled)

Action against Defendants, a financial analyst and his mother, in connection with alleged insider trading.  The SEC alleges Defendant learned of his employer company’s earnings report before they were announced, traded the company’s stock options while in possession of this information, and encouraged his mother to trade in the stock as well.  Defendants have agreed to pay disgorgement, prejudgment interest, and a civil penalty.

SEC Complaint

SEC Litigation Release ... Continue Reading

SEC v. William Z. (“Billy”) McFarland, et al. (S.D.N.Y. July 24, 2018, Settled)

Action against Defendants, the owner and CEO of various purported entertainment businesses, two companies he founded, a former senior executive, and a former contractor, in connection with an alleged scheme to solicit investment in the companies based on material misrepresentations regarding the companies’ performance.  The SEC alleges that the individual Defendants made statements misrepresenting the companies’ performance and falsified supporting documents.  The SEC further alleges that Defendants falsified acquisition offers for the various companies. The ... Continue Reading

In re Fred Tinker (A.P. July 24, 2018, Settled)

Action against Respondent, the Vice President of Finance of a technology company, in connection with alleged insider trading.  The SEC alleges that Respondent traded while in possession of material, non-public information regarding a proposed buyout of his employer company. Respondent has agreed to pay disgorgement of $89,171.88, prejudgment interest of $8,506.64, and a civil penalty of $89,171.88.

SEC Order

SEC Press Release ... Continue Reading

In re Yao Li (A.P. July 24, 2018, Settled)

Action against Respondent, the Vice President of Technology at a fiber optics company, in connection with alleged insider trading.  The SEC alleges that Respondent traded while in possession of material, non-public information regarding the financial performance of the company prior to its announcement of quarterly earnings.  Respondent has agreed to a five-year public officer bar and to pay disgorgement of $196,203, prejudgment interest of $23,062, and a civil penalty of $196,203.

SEC Order ... Continue Reading

In re Sycamore Lane Partners LLC (A.P. July 23, 2018, Settled)

Action against Respondent, an investment manager, in connection with allegedly mismarking of transactions.  The SEC alleges that Respondent mismarked “short” positions as “long” positions when conducting trades.  Respondent has agreed to pay $100,429 in disgorgement, $8,613 in prejudgment interest, and a $25,000 civil penalty.

SEC Order ... Continue Reading

In re Mizuho Securities USA LLC (A.P. July 23, 2018, Settled)

Action against Respondent, a registered broker-dealer, in connection with alleged failures to adequately safeguard material, non-public information.  The SEC alleges that Respondent shared material, non-public information regarding issuer share buyback trades with its customers.  Respondent has agreed to pay a civil penalty of $1,250,000.

SEC Order ... Continue Reading

In re Beverly Hills Wealth Management LLC and Margaret Mulligan Black (A.P. July 20, 2018, Settled)

Action against Respondents, a registered investment adviser and its CEO, in connection with alleged failure to reimburse departed clients for unearned advisory fees.  The SEC alleges the Respondents refused to recognize termination requests that were made in accordance with the terms set forth in the firm Respondent’s Form ADV, Part 2A.  Respondent investment adviser has agreed to pay a civil penalty of $100,000.

SEC Order ... Continue Reading

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