Blog Posts Tagged With Enforcement Action

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SEC v. James T. Booth (D. Conn. Sept. 30, 2019, Contested)

Action against Defendant, an investment adviser and broker, for alleged fraud. The SEC alleges that Defendant solicited funds for alternative investments and used the proceeds to make Ponzi-like payments to earlier investors and to pay personal expenses.  Defendant has been charged in a parallel criminal proceeding.

 SEC Complaint

SEC Litigation Release
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In re Outset Global, LLP (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a United Kingdom-based financial services company, for alleged registration failures.  The SEC alleges that Respondent executed transactions on behalf on U.S. institutional clients without registering as a broker-dealer.  Respondent agreed to pay disgorgement of $135,000, prejudgment interest of $22,409.97, and a civil penalty of $50,000.

SEC Order

SEC Administrative Summary
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In re Independent Financial Group, LLC (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 $1,250,386.58 and prejudgment interest of $175,764.06.

SEC Order
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In re Bill Few Associates, 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 $2,201,454.07 and prejudgment interest of $191,850.74.

SEC Order
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In re Saxony Capital Management, LLC (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 $212,324.53 and prejudgment interest of $17,896.31.

SEC Order
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In re Hilltop Securities, Inc., and Hilltop Securities Independent Network, 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 $736,497.48 and prejudgment interest of $74,287.92.

SEC Order
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In re Schulman Lobel Zand Katzen Williams & Blackman, LLP (A.P. Sept. 30, 2019, Contested); In re Marla P. Manowitz, Thomas R. Vreeland, and Kenneth J. Gralak (A.P. Sept. 30, 2019, Settled)

Actions against Respondents, an auditing firm and three CPAs, for alleged violation of auditing standards. The SEC alleges that Respondents failed to adequately investigate and perform due diligence concerning the audited company’s assertions and records.  One Respondent has agreed to a three-year accounting suspension and to pay a civil penalty of $25,000.  Another Respondent has agreed to a two-year accounting suspension and to pay a civil penalty of $15,000.  A third Respondent has agreed to
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In re Block.one (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a blockchain company, for an alleged unregistered offering.  The SEC alleges that Respondent sold electronic tokens through an initial coin offering without registering or securing an exemption from registration.  Respondent has agreed to pay a civil penalty of $24,000,000.

SEC Order
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CFTC v. Jon Barry Thompson (S.D.N.Y. Sept. 30, 2019, Contested)

Action against Defendant, the principal of a Bitcoin escrow company, for alleged fraud. According to the CFTC, Defendant induced customers to send him funds for the purchase of Bitcoin based on false representations that he already had the Bitcoin in hand.  The CFTC further alleges that Defendant misappropriated the customers’ funds and failed to deliver the promised Bitcoin.

CFTC Press Release

CFTC Complaint
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In re Virtu Americans, LLC (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a “dark pool” trading company, for alleged violation of Regulation SCI.  According to the SEC, Respondent operated an alternative trading system subject to Regulation SCI but failed to establish policies and procedures, file annual and quarterly reports, conduct an annual compliance review, comply with business-continuity and disaster-recovery plan requirements, and maintain books and records as required by the regulation.  Respondent has agreed to pay a civil penalty of $1,500,000.

SEC Order

SEC
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In re HSBC Bank USA, N.A. (A.P. Sept. 30, 2019, Settled); In re Société Générale International Limited (A.P. Sept. 30, 2019, Settled); In re The Northern Trust Company (A.P. Sept. 30, 2019, Settled); In re NatWest Markets Plc (A.P. Sept. 30, 2019, Settled); In re The Bank of New York Mellon (A.P. Sept. 30, 2019, Settled); In re PNC Bank, National Association (A.P. Sept. 30, 2019, Settled)

Actions against Respondents, registered swap dealers, for alleged failures to report data in connection with swap trades.  According to the CFTC, Respondents’ reporting failures varied, but include, for example, failure to report life-cycle events, primary economic terms, and collateralization indicators.  Respondents have agreed to pay respective civil penalties of $650,000, $2,500,000, $1,000,000, $850,000, $750,000, and $300,000.

CFTC Order (HSBC)

CFTC Order (Société Générale)

CFTC Order (Northern Trust)   

CFTC Order (NatWest)

CFTC Order (New York Mellon)
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In re RBC Capital Markets (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a registered futures commission merchant, for alleged failures to supervise.  According to the CFTC, Respondent’s employees were able to execute wash trades due to Respondent’s inadequate supervisory controls.  Respondent has agreed to pay a civil penalty of $5,000,000.

CFTC Order

CFTC Press Release

 
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In re Comprehensive Capital 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 has agreed to pay disgorgement of $83,401.41 and prejudgment interest of $10,230.70.

SEC Order
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In re Michigan Advisors, 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 $295,580.55 and prejudgment interest of $32,396.17.

SEC Order
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In re BGC Financial, LP (A.P. Sept. 30, 2019, Settled); In re GFI Securities, LLC (A.P. Sept. 30, 2019, Settled)

Actions against Respondents, interdealer brokers, for alleged fraud.  According to the CFTC, Respondents made false representations to clients about whether certain prices were executable and whether certain trades had already occurred to create the perception of greater liquidity and tighter spreads in foreign exchange options.  One Respondent has agreed to pay a civil penalty of $15,000,000.  Another Respondent has agreed to pay a civil penalty of $10,000,000.

CFTC Order (BGC)

CFTC Order (GFI)

CFTC Press
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In re Classic Energy LLC and Mathew D. Webb (A.P. Sept. 30, 2019, Settled)

Action against Respondents, a trader and his employer, for alleged misuse of order information, failure to supervise, and recordkeeping violations. According to the CFTC, Respondent trader misused order information to take the other side of customer trades, rather than matching the orders to those of other market participants as the customers expected.  Respondents have agreed to pay, jointly and severally, a civil penalty of $1,500,000. Respondent trader has agreed to pay disgorgement of $413,065.

CFTC
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In re Coby Tresner (A.P. Sept. 30, 2019, Settled)

Action against Respondent, a commodities floor broker, for alleged unauthorized trading and misappropriation.  According to the CFTC, Respondent falsely represented to clients that he was a registered commodity trading adviser and associated person of a registered introducing broker.  The CFTC further alleges that Respondent misappropriated client funds to pay personal expenses.  Respondent has agreed to pay a civil penalty of $250,000, restitution of $55,000, and post-judgment interest, and to permanent trading and registration bars.

CFTC
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In re Equity Services, 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 $535,240.67 and prejudgment interest of $51,777.05.

SEC Order
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In re IC Advisory Services, 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 $1,052,473.03 and prejudgment interest of $142,713.17.  

SEC Order
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SEC v. Michael J. Starkweather and Andiamo Corporation (E.D.N.Y. Sept. 30, 2019, Contested); SEC v. William White (E.D.N.Y. Aug. 22, 2019, Contested)

Actions against Defendants, a technology company and two former CEOs, for allegedly aiding and abetting manipulative trading in the company’s stock and issuing a press release containing false statements. According to the SEC, Defendant former CEO received kickbacks from a stock promoter in connection with sales designed to artificially increase the price of Defendant corporation’s stock.  The SEC further alleges that the other Defendant former CEO knowingly announced the distribution and development of a smartphone
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In re Mid Atlantic Financial 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 $900,069 and prejudgment interest of $126,933.

SEC Order
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