Blog Posts Tagged With Enforcement Action

Subscribe to Enforcement Action RSS Feed

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

Follow-on APs, Suspensions, and Bars (Oct. 2019)

  • In re Moez Ben Mohamed Hedri (A.P. Oct. 1, 2019, Settled)
  • In re Portfolio Advisors Alliance, Inc. (A.P. Oct. 7, 2019, Contested)
  • In re Howard J. Allen III (A.P. Oct. 7, 2019, Contested)
  • In re Kerri L. Wasserman (A.P. Oct. 7, 2019, Contested)
  • In re Michael Silva (A.P. Oct. 8, 2019, Settled)
  • In re Harold Wasserman (A.P. Oct. 9, 2019, Settled)
  • In re Lek Securities Corporation and Samuel Lek (A.P. Oct. 10, 2019, Settled)
  • In

Continue Reading

In re Cargile Investment Management, Inc. (A.P. Sept. 30, 2019, Settled)

Action against Respondent, an investment adviser, for alleged failure to disclose conflicts of interest. According to the SEC, Respondent advised clients to purchase higher-cost mutual fund shares without disclosing the financial benefits Respondent received as a result.  Respondent agreed to pay disgorgement of $67,553.86 and prejudgment interest of $2,587.61.

SEC Order
Continue Reading

In re Hard Eight Futures, LLC (A.P. Sept. 30, 2019, Settled); In re Igor Chernomzav (Sept. 30, 2019, Settled)

Actions against Respondents, a trading firm and its principal, for alleged spoofing.  According to the CFTC, Respondents placed orders for E-mini futures contracts with the intent to cancel them before execution to manipulate prices.  Respondent trading firm has agreed to pay a civil penalty of $1,750,000.  Respondent principal has agreed to pay a civil penalty of $750,000 and to a nine-month trading bar.

CFTC Press Release

CFTC Order (Hard Eight)

CFTC Order (Chernomzav)
Continue Reading

In re Wedbush Securities, Inc. (A.P. Sept. 30, 2019, Settled)

Action against Respondent, an investment adviser, for alleged failure to disclose conflicts of interest.  According to the SEC, Respondent advised clients to purchase higher-cost mutual fund shares without disclosing the financial benefits Respondent received as a result.  Respondent agreed to pay disgorgement of $1,703,194.38 and prejudgment interest of $149,346.59.

SEC Order
Continue Reading

In re Henley & Company Wealth Management (A.P. Sept. 30, 2019, Settled)

Action against Respondent, an investment adviser, for alleged failure to disclose conflicts of interest.  According to the SEC, Respondent advised clients to purchase higher-cost mutual fund shares without disclosing the financial benefits Respondent received as a result.  Respondent agreed to pay disgorgement of $32,657 and prejudgment interest of $4,209.

SEC Order
Continue Reading

In re Nebulous, Inc. (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a cloud services company, for an alleged unregistered offering.  The SEC alleges that Respondent issued and publicly sold convertible electronic notes without registering or securing an exemption from registration.  Respondent has agreed to pay disgorgement of $120,000, prejudgment interest of $24,601.85, and a civil penalty of $80,000.

SEC Order

SEC Administrative Summary
Continue Reading

SEC v. Christopher J. Spencer and John Busshaus (S.D.N.Y. Sept. 30, 2019, Settled)

Action against Defendants, a CEO and CFO of a digital media download kiosk company, for alleged fraud.  According to the SEC, Defendants misrepresented the functionality, profitability, and number of installations of the company’s kiosks in press releases, public filings, and earnings calls.  Defendants have agreed to pay disgorgement, prejudgment interest, and civil penalties to be determined by the court.

SEC Complaint

 SEC Litigation Release
Continue Reading

SEC v. Dana J. Bradley, et al. (W.D.N.C. Sept. 30, 2019, Contested)

Action against Defendants, real estate development companies and their owners, for alleged fraud. The SEC alleges that Defendants solicited investments for real estate developments but instead used the proceeds to make Ponzi-like payments to earlier investors and to pay the debts of other business ventures.

SEC Complaint

SEC Litigation Release
Continue Reading

In re Folger Nolan Fleming Douglas Capital Management, Inc. (A.P. Sept. 30, 2019, Settled)

Action against Respondents, two investment advisers, for alleged failure to disclose conflicts of interest. According to the SEC, Respondent advised clients to purchase higher-cost mutual fund shares without disclosing the financial benefits Respondent received as a result.  Respondent agreed to pay disgorgement of $58,477.87 and prejudgment interest of $1,001.40.

SEC Order
Continue Reading

SEC v. Yellowstone Partners, LLC, David H. Hansen, and Cameron G. High (D. Idaho. Sept. 30, 2019, Contested)

Action against Defendants, an investment adviser and its principals, for allegedly overbilling clients for services performed and billing for services not performed.  The SEC further alleges that Defendants failed to keep adequate books and records.

SEC Complaint

SEC Litigation Release
Continue Reading

LexBlog