Blog Posts Tagged With Financial Institutions and Regulated Entities

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In re R.J. O’Brien & Associates, LLC (July 30, 2018, Settled)

Action against Respondent, a registered Futures Commission Merchant, in connection with alleged failure to supervise a client’s alleged misallocation of executed bunched orders.  The CFTC alleges that, despite various red flags, Respondent failed to monitor its client’s use of Respondent’s trading platform to execute bunched orders and improperly allocated the bunched orders post-execution.  Respondent has agreed to pay a civil penalty in the amount of $600,000.

CFTC Order

CFTC Press Release ... Continue Reading

CFTC v. JAFX, Ltd. (July 27, 2018, Contested)

Action against Defendant, an unregistered retail foreign exchange dealer, in connection with alleged failure to register as a forex dealer.  The CFTC alleges that Defendant failed to register as a retail forex dealer as required and did not provide U.S. customers with Risk Disclosure Statements as required.

CFTC Complaint

CFTC Press Release ... Continue Reading

SEC v. John A. Paulsen (S.D.N.Y. July 26, 2018, Contested)

Action against Defendant, managing director of a registered broker-dealer, in connection with an alleged “pay-to-play” scheme involving a senior employee of the New York State Common Retirement Fund.  The SEC alleges that Defendant provided gifts and entertainment in exchange for the Fund’s bond trading business.  The SEC further alleges the Defendant and related parties made material misrepresentations to internal investigators regarding expenses and the relationship.  Parallel criminal actions have been announced against related parties.

SEC ... Continue Reading

In re Sycamore Lane Partners LLC (A.P. July 23, 2018, Settled)

Action against Respondent, an investment manager, in connection with allegedly mismarking of transactions.  The SEC alleges that Respondent mismarked “short” positions as “long” positions when conducting trades.  Respondent has agreed to pay $100,429 in disgorgement, $8,613 in prejudgment interest, and a $25,000 civil penalty.

SEC Order ... Continue Reading

In re Mizuho Securities USA LLC (A.P. July 23, 2018, Settled)

Action against Respondent, a registered broker-dealer, in connection with alleged failures to adequately safeguard material, non-public information.  The SEC alleges that Respondent shared material, non-public information regarding issuer share buyback trades with its customers.  Respondent has agreed to pay a civil penalty of $1,250,000.

SEC Order ... Continue Reading

In re Beverly Hills Wealth Management LLC and Margaret Mulligan Black (A.P. July 20, 2018, Settled)

Action against Respondents, a registered investment adviser and its CEO, in connection with alleged failure to reimburse departed clients for unearned advisory fees.  The SEC alleges the Respondents refused to recognize termination requests that were made in accordance with the terms set forth in the firm Respondent’s Form ADV, Part 2A.  Respondent investment adviser has agreed to pay a civil penalty of $100,000.

SEC Order ... Continue Reading

In re Melanie Ryan (A.P. July 20, 2018, Settled)

Action against Respondent, the Chief Compliance Officer of a broker-dealer, in connection with Respondent’s contribution to the broker-dealer’s violation of Section 17(a)(3) in connection with its practices related to pre-release of American Depository Receipts (ADRs).  The SEC alleges that Respondent failed to ensure that the broker-dealer took adequate steps to satisfy its obligations in connection with pre-release of ADRs by failing to verify that ordinary shares backed the pre-released ADRs.  Respondent has agreed to pay ... Continue Reading

SEC v. Charles Schwab & Co., Inc (N.D. Cal. July 2, 2018, Settled)

Action against Defendant, a registered broker-dealer, for alleged failure to file Suspicious Activity Reports (SARs), as required by the Bank Secrecy Act, in connection with transactions executed by independent investment advisers after Defendant terminated its custodian relationship.  The SEC alleges that Defendant terminated its relationship with the investment advisers after it found their activity was in violation of Defendant’s policies and posed a risk.  The SEC further alleges, however, that the Defendant failed to file ... Continue Reading

In re Deutsche Bank Trust Company Americas (A.P. July 20, 2018, Settled)

Action against Respondent, a financial services firm, in connection with its practices related to the pre-release of American Depository Receipts (ADRs).  The SEC alleges that Respondent provided pre-released ADRs to brokers that did not hold the supporting ordinary shares as required by the agreements entered into between Respondent and the brokers and that it should have known, based on the characteristics of the pre-release transactions, that the brokers were not complying with the requirements of ... Continue Reading

SEC v. Kimberly Pine Kitts (D. Mass. July 19, 2018, Contested)

Action against Defendant, a registered investment adviser representative, in connection with an alleged scheme to misappropriate client funds.  The SEC alleges that Defendant misappropriated funds by making unauthorized withdrawals, forging client signatures on withdrawals, and making material representations to clients to gain consent to make withdrawals.  The SEC further alleges that Defendant used these funds for personal expenses and attempted to conceal this conduct by altering client statements.

SEC Complaint

SEC Litigation Release ... Continue Reading

SEC v. Temnos Advisory, Inc., and George L. Taylor (D. Conn. July 18, 2018, Contested)

Action against Defendants, an investment advisory firm and its founder, majority owner, and CEO, in connection with failure to disclose conflicts of interest that resulted in risky investment advice.  The SEC alleges that the Defendants recommended investments in privately offered securities without conducting proper due diligence and suitability analyses and without disclosing the extra fees and commissions they received as a result of the recommended investments.  The SEC further alleges that Defendants made material misrepresentations ... Continue Reading

In re Jay C. Lake (A.P. July 17, 2018, Settled)

Action against Respondent, a certified public accountant, in connection with alleged failure to conduct adequate audits.  The SEC alleges that Respondent failed to properly audit companies, allowing a fraudulent scheme involving shell blank check companies to continue.  Respondent has agreed to pay $10,500 in disgorgement, $1,620.71 in prejudgment interest, and a $25,000 civil penalty.

SEC Order ... Continue Reading

In re Michael Devlin (A.P. July 17, 2018, Settled)

Action against Respondent, managing partner and Chief Compliance Officer of a private equity adviser, in connection with failure to disclose a conflict of interest.  The SEC alleges the Respondent invested in a venture on the condition that the venture would buy a product that Respondent created and failed to disclose this conflict to the adviser firm.  Respondent has agreed to a bar and to pay an $80,000 civil money penalty.

SEC Order ... Continue Reading

In re New Silk Route Advisors, L.P. (A.P. July 17, 2018, Settled)

Action against Respondent, a registered investment adviser firm, in connection with alleged failure to timely distribute  annual financial statements to investors.  The SEC alleges that Respondent repeatedly failed to timely distribute audited financial statements to investors.  Respondent has agreed to pay a $75,000 penalty.

SEC Order

SEC Press Release ... Continue Reading

In re Normal M.K. Louie and Mount Kellett Capital Management LP (A.P. July 16, 2018, Settled)

Action against Respondents, an investment advisory firm and its managing director, in connection with alleged failure to disclose the provision of personal loans to a client and the associated conflict of interest.  The SEC alleges that Respondents provided undisclosed personal loans to a client in exchange for a seat on the client’s board of directors.  Respondent Louie agreed to pay a $100,000 civil penalty and Respondent Mount Kellett agreed to pay a $160,000 civil penalty. ... Continue Reading

In re BGC Financial L.P. (A.P. July 16, 2018, Settled)

Action against Respondent, a registered broker-dealer, in connection with alleged record-keeping failures.  The SEC alleges that Respondent deleted audio recordings in violation of a litigation hold implemented in response to a document request from the SEC.  The SEC further alleges that Respondent failed to accurately record travel, entertainment, and compensation expenses.  Respondent has agreed to pay a $1,250,000 penalty.

SEC Order ... Continue Reading

In re Lansing Trade Group, LLC (July 12, 2018, Settled)

Action against Respondent, a commodities trading firm, in connection with alleged commodities price manipulation schemes.  The CFTC alleges that Respondent placed and then cancelled a number of “wheat shipping certificates,” to manipulate the appearance of market demand for wheat.  The CFTC further alleges the Respondent also attempted to drive the price of yellow corn by entering into below-market transactions with a counterparty.  Respondent has agreed to pay a $3,400,000 civil penalty.

CFTC Order

CFTC Press ... Continue Reading

In re HBA Advisors, LLC, and Jaime Enrique Biel (A.P. July 10, 2018, Settled)

Action against Respondents, an investment adviser and its representative, in connection with alleged solicitation and distribution of testimonials from clients for advertising purposes.  Respondent adviser has agreed to pay a civil money penalty of $15,000, and Respondent representative has agreed to pay a $10,000 civil penalty.

SEC Order

SEC Press Release

Related Case, William M. Greenfield

Related Case, Brian S. Eyster ... Continue Reading

In re Leonard S Schwartz (A.P. July 10, 2018, Settled)

Action against Respondent, a marketing professional, in connection with alleged violations of Section 206(4) of the Investment Advisers Act of 1940.  The SEC alleges that Respondent sought out customer testimonials for advertising purposes for Respondent’s clients.  Respondent has agreed to pay a $35,000 civil penalty.

SEC Order

SEC Press Release

Related Case, Brian S. Eyster

Related Case, William M. Greenfield ... Continue Reading

In re William M. Greenfield (A.P. July 10, 2018, Settled)

Action against Respondent, a registered representative of an investment adviser firm, in connection with alleged solicition and publically distribution of testimonials from clients for advertising purposes.  Respondent has agreed to pay a $10,000 civil penalty.

SEC Order

SEC Press Release

Related Case, HBA Advisors

Related Case, Brian S. Eyster ... Continue Reading

In re Oaktree Capital Management, L.P. (A.P. July 10, 2018, Settled); In re EnCap Investments, L.P. (A.P. July 10, 2018, Settled); In re Sofinnova Ventures, Inc. (A.P. July 10, 2018, Settled)

Action against Respondents, investment advisers, in connection with alleged “pay-to-play” campaign contributions.  The SEC alleges that Respondents made campaign contributions to elected officials who had influence with respect to the selection of investment advisers to manage government client assets, including public pension fund assets, and provided investment advisory services for compensation within two years of making these contributions.  Respondent Oaktree has agreed to pay a $100,000 civil penalty, Respondent EnCap has agreed to pay a ... Continue Reading

In re Eugene Terracciano (A.P. July 6, 2018, Settled)

Action against Respondent, the AML compliance officer of a registered broker-dealer, in connection with alleged failures to file SARs. The SEC alleges that, in violation of the broker-dealer’s written supervisory procedures, Respondent failed to file SARs on behalf of the broker-dealer dealer with respect to hundreds of transactions in the face of numerous red flags related to market manipulation and other suspicious trading activity. The SEC further alleges that Respondent failed to document any analysis ... Continue Reading

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