In re XBT Corp. SARL d/b/a First Global Credit (A.P. Oct. 31, 2019, Settled)

Actions against Respondent, an operator of a digital-currency trading platform, for alleged registration failures.  According to the SEC and CFTC, Respondent solicited and accepted futures orders from customers, accepted Bitcoin as collateral margin for customers’ trades, and sold security-based swaps without registering with either agency.  Respondent has agreed to pay a civil penalty of $100,000 to the CFTC.  Respondent has agreed to pay disgorgement and prejudgment interest of $131,952 and a civil monetary penalty of
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In re Upstream Energy Services LLC (A.P. Oct. 24, 2019, Settled)

Action against Respondent, an energy company, for alleged registration failure. According to the CFTC, Respondent accepted orders from two clients, traded natural gas commodity futures and options based on those orders, and received fees for those orders without registering with the CFTC as a futures commission merchant.  Respondent has agreed to pay a civil penalty of $75,000.

CFTC Order 

CFTC Press Release
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CFTC v. Eyal Alper (S.D.N.Y. Oct. 24, 2019, Contested)

Action against Defendant, a forex trader, for alleged fraud. According to the CFTC, Defendant solicited investor funds for use in commodity trading, misappropriated the funds to pay personal expenses, and falsified account statements to conceal that misappropriation.

CFTC Complaint 

CFTC Press Release
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In re Treasury Vault, LLC (A.P. Oct. 23, 2019, Settled)

Action against Respondent, a retail forex dealer, for alleged registration failure.  According to the CFTC, Respondent offered services in off-exchange foreign-currency trading to retail customers without registering with the CFTC.  Respondent has agreed to pay a civil penalty of $75,000.

CFTC Order 

CFTC Press Release
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SEC v. Joseph Bayliss and Ronald Roach (E.D. Cal. Oct. 22, 2019, Settled)

Action against Defendants, an electrical and building contractor and an accountant, for alleged fraud. According to the SEC, Defendants solicited investments in a program to purchase and lease electric generators. The SEC alleges that Defendants never purchased the generators and instead used investor funds to make Ponzi-like payments to earlier investors.  The SEC further alleges that Defendants created false certificates of inspection and false financial statements to conceal the scheme.  Defendants have agreed to pay
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SEC v. Benjamin Taylor et al. (S.D.N.Y. Oct. 22, 2019, Contested)

Action against Defendants, two investment bankers and a trader, for alleged insider trading.  According to the SEC, Defendant investment bankers obtained material nonpublic information about potential acquisitions and tender offers and tipped Defendant trader, who traded in the target firms’ securities.  The SEC further alleges that Defendant investment bankers received cash and other benefits from Defendant trader.

SEC Complaint 

SEC Litigation Release
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SEC v. Bryan Cohen and George Nikas (S.D.N.Y. Oct. 18, 2019, Contested)

Action against Defendants, an investment banker and a trader, for alleged insider trading.  According to the SEC, Defendant investment banker learned material nonpublic information about potential acquisitions and tipped Defendant trader, who traded in the target firms’ securities.  The SEC further alleges that Defendant investment banker received cash from Defendant trader in exchange for providing tips.

SEC Complaint 

SEC Litigation Release
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SEC v. Shuang Chen et al. (D. Mass. Oct. 15, 2019, Contested)

Action against Defendants, a Hong Kong brokerage company and 18 traders, for alleged market manipulation. According to the SEC, Defendants manipulated prices by placing small sell orders to drive down a stock’s price and then used another account to buy large amounts of the stock at a deflated price.  The SEC further alleges Defendants subsequently placed small orders to buy the stock at a higher price in a small quantity, then sold off the rest
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In re UQM Technologies, Inc. (A.P. Oct. 11, 2019, Settled)

Action against Respondent, an automotive parts manufacturer, for alleged financial misstatement.  According to the SEC, Respondent made misleading statements regarding the value and certainty of a supply agreement with a potential customer.  Respondent has agreed to pay a civil penalty of $500,000.

SEC Order

SEC Administrative Summary
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SEC v. Telegram Group Inc. and TON Issuer Inc. (S.D.N.Y. Oct. 11, 2019, Contested)

Action against Defendants, a mobile messaging company and a blockchain company, for an alleged unregistered offering of digital tokens. According to the SEC, the tokens are securities because investors expected to profit from Defendants’ work. The Court has issued a temporary restraining order.

SEC Complaint  

SEC Press Release
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SEC v. Anton Senderov and Lior Babazara (E.D. Wash. Oct. 10, 2019, Contested)

Action against Defendants, individuals who controlled binary brokers, for alleged misrepresentation regarding binary options trading. According to the SEC, Defendants solicited customers to open binary option accounts based on false information regarding the Defendants’ investment experience and compensation methods.  The SEC further alleges that Defendants falsely told investors that the brokerage firms would profit only when investors profit.

SEC Complaint

SEC Litigation Release
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In re Northwest Biotherapeutics, Inc. (A.P. Oct. 10, 2019, Settled)

Action against Respondent, a biotechnology company, for alleged deficiencies in Internal Control over Financial Reporting (ICFR).  According to the SEC, Respondent disclosed ICFR as a material weakness in public filings but failed to take adequate steps to remedy disclosed weaknesses.  Respondent has agreed to pay a civil penalty of $250,000.

SEC Order

SEC Administrative Summary
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SEC v. Richard Andrew Mallion (S.D. Fla. Oct. 10, 2019, Settled)

Action against Defendant, a self-employed individual, for alleged fraud and registration failure. According to the SEC, Defendant solicited investment in private firms based on false claims that they would soon be taken public.  The SEC further alleges that Defendant failed to register as a broker-dealer despite earning transaction-based compensation.  Defendant has agreed to a security-solicitation bar and to pay disgorgement of $634,511, prejudgment interest of $18,606, and a civil penalty of $150,000.

SEC Complaint

SEC
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In re David Sechovicz (A.P. Oct. 7, 2019, Settled); CFTC v. Peter Szatmari (D. Haw., Oct. 7, 2019 Contested)

Actions against Respondent and Defendant, internet marketers for unregistered binary option brokers, for alleged fraud. According to the CFTC, Respondent and Defendant created fictitious websites, news stories, and testimonials to promote binary option trading brokers and were compensated with referral fees from brokers.  Respondent has agreed to pay a civil penalty of $949,918.50.

CFTC Order

CFTC Complaint

CFTC Press Release

Previous Coverage
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SEC v. Gino M. Pereira (E.D.N.Y. Oct. 4, 2019, Contested); SEC v. Jeffrey Auerbach et al. (E.D.N.Y. Oct. 4, 2019, Contested)

Actions against Defendants—the CEO of a security-technology company, two consultants, and a stockbroker—for alleged fraud. According to the SEC, Defendant CEO and Defendant consultants bribed Defendant stockbroker to buy shares of the technology company using client funds.

SEC Complaint (Pereira)

SEC Complaint (Auerbach)

SEC Litigation Release
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