Blog Posts Tagged With Enforcement Action

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SEC v. Thomas Carter Ronk (S.D.N.Y. Sept. 28, 2018, Contested)

SEC v. Thomas Carter Ronk (S.D.N.Y. Sept. 28, 2018, Contested) – Action against Defendant individual for alleged market manipulation schemes in connection with unregistered offerings of securities in two microcap companies.  According to the SEC, Defendant made false statements about the companies’ business prospects and potential revenue projections as part of a scheme to increase the companies’ share prices and induce investors to purchase shares.  The SEC also alleges that Defendant misled investors about trading
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SEC v. Russell Craig and OneStep Financial Services, LLC (N.D. Ga. Sept. 28, 2018, Contested)

Action against Defendants, a financial planning company and its president, for alleged fraud on investors and misappropriation of investor funds.  The SEC has additionally named two corporations and their presidents as relief defendants.  According to the SEC, Defendants promised investors that money deposited in escrow accounts would be used for real estate investments but instead misappropriated these funds.

SEC Litigation Release
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SEC v. Bryan B. Long (N.D. Cal. Sept. 28, 2018, Contested)

Action against Defendant, a former Director of SEC Reporting for an e-commerce company, for alleged insider trading.  The SEC alleges that Defendant acquired material non-public information about a pending acquisition by a subsidiary of his company and purchased call options in the target company while in possession of that information.

SEC Litigation Release
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In re Unal Patel and Amish Patel (A.P. Sept. 28, 2018, Settled)

Action against Respondents, a CPA and a doctor, for allegedly trading while in possession of confidential information regarding an impending acquisition. According to the SEC, Respondent CPA received material nonpublic information from a friend who learned of an acquisition through his employer. The SEC alleges that Respondent CPA shared the confidential information with Respondent doctor, and both Respondents purchased call options in the target company while in possession of the confidential information. Respondent CPA has
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SEC v. Bryan R. Ziegenfuse (E.D. Pa. Sept. 28, 2018, Settled)

Action against Defendant, a former mortgage loan servicing company vice president, for alleged insider trading. The SEC alleges that Defendant learned of his employer’s planned acquisition of another company and received emails regarding the merger prior to the public announcement. According to the SEC, Defendant used a family member’s account to purchase shares and options before the announcement of the acquisition and while in possession of the material nonpublic information. The SEC further alleges that
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CFTC v. Lucrative Pips Corporation and Kevin Perry (N.D. Ga. Sept. 28, 2018, Contested)

Action against Defendants, a company and its founder and CEO, for alleged commodity fraud and misappropriation related to a scheme in certain off-exchange forex contracts.  According to the CFTC, Defendants falsely represented their trading strategy and returns while soliciting customers and lost or misappropriated the funds obtained from investors.

CFTC Press Release
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In re Credit Suisse Securities (USA) LLC (A.P. Sept. 28, 2018, Settled)

Action against Respondent, a broker-dealer, for alleged misrepresentations and omissions related to the handling of orders by Respondent’s now defunct Retail Execution Services business.  According to the SEC, despite advertising its access to “dark pool” liquidity in marketing materials, Respondent executed few held orders in “dark pools”. The SEC further alleges that Respondent failed to disclose that retail customers would not receive price improvement on non-reportable orders and, contrary to claims to customers, Respondent routed
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CFTC v. John Doe 1 a/k/a Morgan Hunt dba Diamonds Trading Investment House and John Doe 2 aka Kim Hecroft dba First Options Trading (N.D. Tex. Sept. 28, 2018, Contested)

Action against Defendants for alleged fraudulent scheme to solicit Bitcoin.  According to the CFTC, Defendants misappropriated customer funds after making false or misleading representations or omissions about their planned investment of funds in forex contracts, binary options, and diamonds. The CFTC further alleges that Defendants forged account statements and documents and impersonated a CFTC investigator.

CFTC Press Release
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CFTC v. TFS-ICAP, LLC, et al. (S.D.N.Y. Sept. 28, 2018, Contested)

Action against Defendants, an interdealer broker joint venture, its Global Head of Emerging Markets FX Options, and its CEO, in connection with alleged deception of clients through the use of fake bids, offers, and trades in the forex options market.  The CFTC alleges that senior managers encouraged or knowingly allowed the misconduct to continue and that Defendant CEO knew or had reason to know of the practices but failed to take steps to prevent them.
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In re Michael Leibowitz (A.P. Sept. 28, 2018, Settled)

Action against Respondent, Chairman of the Board of an interdealer foreign exchange options broker, for alleged failure to diligently supervise forex options trades by the emerging options desk.   According to the CFTC, brokers engaged in fake bids, offers, and trades to misrepresent the level of liquidity and encourage customers to trade.  The CFTC further alleges that senior managers had reason to know that this practice was ongoing and that Respondent failed to implement any policies
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CFTC v. EOX Holdings LLC and Andrew Gizienski (S.D.N.Y. Sept. 28, 2018, Contested)

Action against Defendants, an introducing broker and one of its associated persons, for alleged misuse of material nonpublic information related to their customers.  According to the CFTC, Defendant associated person provided a friend with confidential customer information and executed trades for his friend’s account while in possession of that information.  The CFTC also alleges that Defendant broker failed to maintain certain required records, diligently supervise its employees, and institute policies and procedures to monitor trading
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SEC v. Carlos I. Uresti and Stanley P. Bates (W.D. Tex. Sept. 28, 2018, Partially Settled and Partially Contested)

Action against Defendants, a former CEO and former state senator who served as counsel, broker, and escrow agent to the CEO’s company, in connection with alleged securities fraud.  According to the SEC, Defendant CEO founded a company to buy and sell sand for hydraulic fracking.  The SEC alleges that Defendants misrepresented to investors the potential profits and security of investments in the  company and showed investors an altered and inflated bank statement.  The SEC further
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In re LendingClub Asset Management, LLC, f/k/a LC Advisors, LLC, et al. (A.P. Sept. 28, 2018, Settled)

Action against Respondents, an investment adviser, its former CEO, and its former CFO, for alleged Investment Advisers Act violations in connection with the fraudulent use of money from private funds. According to the SEC, Respondent adviser, through Respondent CEO, caused one of its private funds to purchase interests in risky loans in order to benefit Respondent adviser. The SEC alleges that these purchases did not comply with the procedures provided in Respondent adviser’s Form ADV.
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In re Putnam Investment Management, LLC and Zachary Harrison (A.P. Sept. 27, 2018, Settled)

Action against Respondents, an investment adviser and a former portfolio manager and RMBS trader, in connection with alleged preferential treatment of select advisory clients.  According to the SEC, Respondent manager executed prearranged RMBS cross trades with broker-dealers, informing some clients that the securities would be repurchased the next day at a slightly higher price.  The SEC alleges that Respondent manager’s arrangement was preferable for some clients over others and that Respondent adviser failed to supervise
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SEC v. Goldsky Asset Management, LLC and Kenneth Grace (S.D.N.Y. Sept. 27, 2018, Contested)

Action against Defendants, an investment adviser and its owner, for alleged false and misleading statements on its website and in SEC filings.  According to the SEC, Defendant adviser’s hedge fund did not employ an auditor, prime broker, or custodian, despite Defendant adviser’s representations on its Forms ADV.  The SEC also alleges that Defendant adviser falsely represented that it managed more in discretionary assets than it actually did and Defendant adviser’s website misstated its past returns.
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SEC v. Salix Pharmaceutical, Ltd. (S.D.N.Y. Sept. 27, 2018, Settled); SEC v. Adam C. Derbyshire (S.D.N.Y. Sept. 27, 2018, Settled)

Actions against Defendants, a pharmaceutical company and its former CFO, for alleged material misstatements and omissions to investors and analysis.  According to the SEC, Defendants provided misleading information on inventory levels of Defendant company’s drugs and failed to disclose the effect of the excess supply on future earnings.  Defendant CFO has agreed to pay $558,534 in disgorgement and prejudgment interest and a civil penalty of $494,836.  Defendant company has agreed to be enjoined from future
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 SEC v. Elon Musk (S.D.N.Y. Sept. 27, 2018, Settled); SEC v. Tesla, Inc. (S.D.N.Y. Sept. 29, 2018, Settled)

Action against Defendants, a car company and its CEO and former Chairman, in connection with a series of allegedly false and misleading Twitter communications by Defendant CEO.  According to the SEC, Defendant CEO tweeted to followers that, subject to a shareholder vote, Defendant company had secured sufficient funding to go private at a higher price than its trading price.  The SEC alleges that Defendant CEO knew that the transaction was not definite and that he
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In re Petróleo Brasileiro S.A. – Petrobras (A.P. Sept. 27, 2018, Settled)

Action against Respondent, an oil and gas company, for misleading investors in connection with an alleged corruption scheme.  According to the SEC, some of Respondent’s former senior executives, in conjunction with Respondent’s contractors and suppliers, raised the cost of infrastructure projects in order to receive kickbacks which were then paid to foreign politicians and political parties who had helped the senior executives obtain their titles with Respondent.  The SEC further alleges that the former executives
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In re Davis Ramsey (A.P. Sept. 27, 2018, Settled)

Action against Respondent, a futures trader, for alleged scheme to influence the prices of futures contracts on two exchanges.  According to the CFTC, Respondent engaged in futures market transactions to improve binary contracts positions he held that were traded on Nadex.  Respondent has agreed to pay disgorgement of $250,636.25 and a civil penalty of $325,000.

CFTC Press Release 

CFTC Order
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CFTC v. 1pool Ltd. and Patrick Brunner (D.D.C. Sept. 27, 2018, Contested)

Action against Defendants, an online trading platform company and its CEO and owner, in connection with alleged illegal retail commodity transactions, failure to register as a Futures Commission Merchant, and failure to implement procedures to prevent money laundering.  According to the CFTC, Defendants failed to conduct certain transactions in compliance with the Commodity Exchange Act, and Defendant company, through Defendant CEO and others, acted as a Futures Commission Merchant by soliciting or taking orders for
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SEC v. 1pool Ltd. a/k/a 1Broker and Patrick Brunner (D.D.C. Sept. 27, 2018, Contested)

Action against Defendants, a securities dealer and its CEO, in connection with alleged illegal offer and sale of security-based swaps funded with bitcoins.  According to the SEC, customers did not need to meet thresholds required by the securities laws to purchase security-based swaps on Defendant’s dealer’s platform.  The SEC alleges that Defendant also failed to register as a security-based swaps dealer and did not execute transactions on a registered national exchange.

SEC Press Release
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CFTC v. Timothy J. Atkinson, et al. (S.D.N.Y. Sept. 27, 2018, Contested); et al.

CFTC v. Timothy Joseph Atkinson, et al. (S.D.N.Y. Sept. 27, 2018, Contested); CFTC v. Ronald Montano, et al. (S.D.N.Y. Sept. 27, 2018, Contested); In re Grayson Brookshire (A.P. Sept. 27, 2018, Settled); In re Antonio Giacca (A.P. Sept. 27, 2018, Settled); In re Travis Stephenson (A.P. Sept. 27, 2018, Settled); In re Justin Blake Barrett (A.P. Sept. 27, 2018, Settled); In re Shmuel Pollen (A.P. Sept. 27, 2018, Settled); In re William Earl Berry and
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SEC v. Timothy J. Atkinson, et al. (S.D. Fla. Sept. 27, 2018, Partially Settled and Partially Contested); SEC v. Ronald C. Montano, et al. (M.D. Fla. Sept. 27, 2018, Partially Settled and Partially Contested); SEC v. Justin Blake Barrett and Grayson Brookshire (W.D.N.C. Sept. 27, 2018, Settled)

Actions against Defendants, ten individuals and two companies, in connection with alleged scheme to entice investors to create brokerage accounts and invest in binary options.  According to the SEC, Defendants’ marketing videos promised large returns to investors who opened binary options accounts using certain software.  The SEC alleges, however, that these videos were false and that marketers were paid for each new funded account.  Seven defendants have agreed to pay a combined $4.1 million in
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