Follow-on APs, Suspensions, and Bars (October 2017)

  • In re Martin T. Cantu (A.P. Oct 2, 2017, Contested)
  • In re Maroof Miyana (A.P. Oct. 2, 2017, Settled)
  • In re Biovest International Inc. (A.P. Oct. 3, 2017, Contested)
  • In re Prospect Ventures, Inc., et al. (A.P. Oct. 3, 2017, Settled)
  • In re Wen Chen Hwang aka “Wendy Lee” (A.P. Oct. 4, 2017, Settled)
  • In re Bilal Basrai (A.P. Oct. 5, 2017, Settled)
  • In re Bryce Stirton (A.P. Oct. 5, 2017, Settled)
  • In re Cono
... Continue Reading

In re Jeffrey D. Smith, et al. (A.P. Oct. 31, 2017, Contested)

Action against three individuals who allegedly acted as unregistered broker-dealers in connection with the solicitation, offer, and sale of interests in a fraudulent “prime bank” scheme. According to the SEC, two of the three Respondents used fictitious companies to defraud investors out of at least $775,000 by promising risk-free returns of as much as 35% a week. The third Respondent allegedly acted as a “finder,” referring at least one investor to the scheme.

SEC Order ... Continue Reading

SEC v. Thomas J. Buck (S.D. Ind. Oct. 31, 2017, Settled)

Action against broker for allegedly obtaining more than $2.5 million in excessive commissions and fees from investors. According to the SEC, Defendant represented to customers that total annual commissions paid would not exceed certain limits, then generated commissions above those limits. The SEC further alleges that Defendant falsely represented to several customers that their annual commissions were within the limit, and placed trades in customer accounts without authorization. Defendant has agreed to pay over $2.5 ... Continue Reading

In re Millennium Management LLC (A.P. Oct. 31, 2017, Settled)

Action against registered investment adviser for alleged violations of Rule 105 of Regulation M of the Exchange Act. According to the SEC, Respondent short sold stock during Rule 105’s restricted period and then purchased shares of the same stock in a covered offering, netting $286,000 in unlawful profits. Respondent has agreed to pay $286,889 in disgorgement, $51,820.11 in prejudgment interest, and a civil penalty of $300,000.

SEC Order ... Continue Reading

SEC Division of Enforcement Co-Directors Provide Remarks on Enforcement Division’s Initiatives and Priorities (Oct. 30, 2017)

SEC Division of Enforcement Co-Directors Stephanie Avakian and Steven Peikin provided remarks at the 2017 Securities Enforcement Forum regarding the Enforcement Division’s new initiatives and priorities. In her remarks, Avakian discussed the recently announced Retail Strategy Task Force and Cyber Unit, but emphasized that despite these new areas of focus, and SEC would not allocate fewer resources to “financial fraud or policing Wall Street.” According to Avakian, the new task force will use data analytics ... Continue Reading

SEC v. Andalusian Resorts and Spas, Inc., et al. (S.D.N.Y. Oct. 27, 2017, Contested)

Action against penny stock company, its former president and CEO, and a controlling investor for allegedly defrauding investors by issuing false press releases regarding business prospects and hiding Defendant John Madsen’s control of the penny stock company. According to the SEC, Defendant Madsen concealed his past mail fraud violation from investors by recruiting Defendant Bernard Fried to serve as a strawman executive. The SEC further alleges that, at Defendant Madsen’s direction, Defendant Fried drafted misleading ... Continue Reading

In re UBS Financial Services, Inc. (A.P. Oct. 27, 2017, Settled)

Action against registered broker-dealer and investment adviser for allegedly recommending more expensive share classes in mutual funds to certain retirement plan and charitable organization brokerage customers when less expensive shares were available. According to the SEC, Respondent failed to disclose that it would receive greater compensation from purchases of the more expensive share class and that the purchase of these more expensive share classes would negatively impact the customers’ overall return on investment. Respondent has ... Continue Reading

SEC v. Randall James (M.D. Tenn. Oct. 26, 2017, Settled)

Action against individual unregistered to sell investments for allegedly defrauding investors in his company, which purportedly produced pay-per-view entertainment and concerts. According to the SEC, Defendant claimed he would use investors’ money to produce concerts and other events that would be live-streamed online for profit but instead spent investor funds on personal living expenses. Defendant has agreed to pay $109,000 in disgorgement, $18,006.14 in prejudgment interest, and a civil penalty of $109,000.

SEC Litigation Release ... Continue Reading

In re Canterbury Consulting, Inc. (A.P. Oct. 26, 2017, Settled); In re Kenneth P. Krueger (A.P. Oct. 26, 2017, Settled)

Related actions against managing director of an investment adviser for an alleged “cherry-picking” trade allocation scheme yielding $309,651 in illicit profits and investment adviser for alleged failure to supervise the managing director by failing to assign anyone to supervise him or his trading activities, failing to adopt and implement policies and procedures reasonably designed to prevent cherry-picking schemes, and failing to meet certain recordkeeping requirements. Respondent managing director has agreed to pay $309,651 in disgorgement, ... Continue Reading

In re Augustine Capital Management, LLC, et al. (A.P. Oct. 26, 2017, Settled)

Action against investment advisory firm and two of its owners for allegedly causing a private fund to engage in conflicted transactions without disclosure to, or the consent of, the fund’s investors. According to the SEC, Respondent firm also used investor funds to finance expenses which, under the investor agreement, were to be borne by the firm. The SEC also alleges that Respondents allocated investments to investors in an opaque manner inconsistent with the terms of ... Continue Reading

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