SEC v. Gina Champion-Cain and ANI Development, LLC (S.D. Cal. Aug. 29, 2019, Contested)

Action against Defendants, a specialty lender and its principal, in connection with alleged fraud. According to the SEC, Defendants raised money from investors by claiming to offer investors an opportunity to make short-term, high-interest loans, and then misappropriated investor funds.

SEC Complaint

SEC Litigation Release
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In re Omega Protein Corporation (A.P. Aug. 29, 2019, Settled)

Action against Respondent, a manufacturer of fish oil and fish meal products, for allegedly misrepresenting in its annual and quarterly reports that it was in compliance with all the covenants related to loan agreements with the federal government.  According to the SEC, Respondent had violated its covenants, a default that required payment of accelerated interest under its outstanding loan agreements.  Respondent has agreed to pay a civil penalty of $400,000.

SEC Order
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In re Howard C. Burns (A.P. Aug. 29, 2019, Settled)

Action against Respondent, a former registered representative associated with a broker-dealer, for alleged participation as an unregistered broker-dealer in the offer and sale of securities. According to the SEC, Respondent solicited investors to purchase notes in a company, advised investors on the merits of the investment, and acted as a liaison between investors and the company, but was not registered as a broker-dealer or associated with a registered broker-dealer during the relevant period. Respondent has
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SEC v. William Hutchinson a/k/a William Cluxton (M.D. Fla. Aug. 29, 2019, Contested)

Action against Defendant, an individual, for the alleged fraudulent sale of securities. According to the SEC, Defendant misrepresented the nature and scale of his company’s business, inflated sales and income figures, and falsely claimed that his company had been audited by a multinational accounting firm.  The SEC further alleges that Defendant used a significant portion of investor funds to pay for personal expenses.

SEC Complaint  

SEC Litigation Release
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In re Wendy Katz (A.P. Aug. 29, 2019, Settled)

Action against Respondent, who worked on the securities lending desk of a registered broker-dealer, in connection with alleged improper practices involving the pre-release of ADRs. According to the SEC, Respondent failed to take reasonable steps to confirm that counterparties borrowing pre-released ADRs owned the underlying ordinary shares. Respondent has agreed to pay a civil penalty of $20,000.

SEC Order
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SEC v. Cetera Advisors, LLC (D. Colo. Aug. 29, 2019, Contested)

Action against Defendant, a registered investment adviser and broker-dealer, for alleged failure to disclose conflicts of interest. According to the SEC, Defendant invested and held clients in mutual fund share classes that charged 12b-1 fees, even when it knew these clients were eligible to invest in lower-cost shares of the same funds. The SEC alleges that Defendant also participated in a program offered by its clearing broker to share revenues and service fees it received
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SEC v. Bitqyck, Inc., et al. (N.D. Tex. Aug. 29, 3019, Settled)

Action against a company and its two founders in connection with alleged fraud against investors in securities offerings of digital assets and operation of an unregistered digital asset exchange. According to the SEC, Defendants misrepresented a daily deals platform as a global online marketplace and falsely claimed that digital tokens provided fractional shares of stock.  The SEC further alleges that Defendants falsely told investors that the tokens provided an interest in a cryptocurrency mining facility
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SEC v. Live Well Financial, et al. (S.D.N.Y. Aug. 29, 2019, Partially Settled and Partially Contested)

Action against Defendants, a reverse-mortgage company and its CEO, CFO, and Executive Vice President, for their alleged roles in a bond mismarking scheme. According to the SEC, Defendant company fraudulently inflated the value of its portfolio of reverse-mortgage bonds by submitting inflated bond prices to a pricing service.  The SEC alleges that, as a result, Defendant company borrowed more from lenders than it would have been able to had the bonds been priced accurately, and
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SEC v. Cambridge Capital Group Advisors, LLC (f/k/a Cambridge Capital Advisors, LLC), et al. (N.D. Fla. Aug. 29, 2019, Contested)

Action against Defendants, an investment adviser firm and its two former principals, for alleged investor fraud. According to the SEC, Defendants advertised that certain funds would invest in a variety of instruments but instead invested in settlement advance loans to several of one Defendant principal’s class-action clients. The SEC also alleges that Defendants failed to disclose one of Defendant principal’s criminal history and investment adviser bar, and that one of Defendant principals defrauded investors by
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In re Juniper Networks, Inc. (A.P. Aug. 29, 2019, Settled)

Action against Respondent, a networking equipment product and service company, for alleged violations of the books and records and internal controls provisions of the FCPA.  According to the SEC, sales employees of Respondent’s foreign subsidiaries agreed with third-party channel partners to increase the incremental discount provided to customers through those partners without passing the discounts on to customers.  The SEC alleges that the channel partners diverted the discounts for personal and marketing expenses, including trips
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In re EMS Capital LP (A.P. Aug. 27, 2019, Settled)

Action against Respondent, an investment adviser, for allegedly causing violations of Regulation SHO. According to the SEC, Respondent mismarked sell orders as long, rather than short, which caused its broker to likewise mismark the orders and accept short sale orders without satisfying Regulation SHO’s locate requirement. The SEC also alleges that because Respondent mismarked the orders, it failed to make and keep true and accurate order memoranda and copies of written communications related to orders.
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SEC v. Brenda Smith, et al. (D.N.J. Aug. 27, 2019, Contested)

Action against Defendants, an investment adviser and her fund, in connection with operating an investment advisory fraud. According to the SEC, Defendants represented to investors that Defendant adviser would invest their money in publicly traded securities through trading strategies that provided consistent high returns. The SEC alleges that Defendant adviser made very few investments in those trading strategies, and instead used investor money to repay other investors and for personal expenses. The SEC further alleges
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In re RSM US LLP (A.P. Aug. 27, 2019, Settled)

Action against Respondent, an accounting and advisory firm, for alleged violations of the SEC’s auditor independence rules. According to the SEC, Respondent failed to identify and avoid prohibited non-audit services and a prohibited employment relationship with several audit clients. The SEC alleges that Respondent represented that it was independent in audit reports that were included or incorporated by reference in public filings with the SEC or provided to private fund investors for the purpose of
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SEC v. Hartman Wright Group, LLC and Tytus W. Harkins (D. Colo. Aug. 26, 2019, Contested)

Action against Defendants, a real estate company and its founder, for alleged unregistered real estate offering fraud. According to the SEC, Defendants solicited investors through paid finders, mailing lists, seminars, and the company’s website, and told investors that Defendant company purchased mobile home parks, made capital improvements, and then sold them for a profit.  The SEC also alleges that Defendants promised investors a specified rate of return and, in some cases, equity ownership.  The SEC
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In re Joseph C. Buchanan (A.P. Aug. 26, 2019, Settled)

Action against Respondent, an investment adviser representative, for alleged cherry-picking.  According to the SEC, Respondent placed orders in his omnibus account to buy securities for allocation to his client or personal accounts, but delayed the allocation of securities until after the trades were executed, and then allocated a disproportionate number of profitable trades to his personal accounts.  Respondent has agreed to pay disgorgement of $56,227.00 and prejudgment interest of $15,284.03.

SEC Order

Related Coverage
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