Blog Posts Tagged With Financial Institutions and Regulated Entities

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In re Barclays PLC (A.P., Sept. 27, 2019, Settled)

Action against Respondent, a bank holding company, for alleged violations of the books and records and internal controls provisions of the FCPA.  The SEC alleges that Respondent hired relatives and close friends of government officials throughout Asia to acquire business and failed to devise and maintain sufficient controls with respect to its hiring practices.  Respondent has agreed to pay disgorgement of $3,824,686, prejudgment interest of $984,040, and a civil penalty of $1,500,000.

SEC Order

SEC
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In re Amadeus Wealth Advisors, LLC (A.P. Sept. 27, 2019, Settled); In re Three Bridge Wealth Advisors, LLC (A.P. Sept. 27, 2019, Settled)

Actions against Respondents, registered investment advisers, for allegedly violating their own policies regarding proxy voting.  The SEC alleges that Respondents stated in their Form ADV that they did not accept proxy voting authority on behalf of clients, but voted proxy shares.  Respondents have agreed to pay civil penalties of $40,000 and $60,000, respectively.  SEC Order (Amadeus)  SEC Order (Three Bridge)  SEC Administrative Summary
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In re Omgeo Matching Services US, LLC (A.P. Sept. 27, 2019, Settled)

Action against Respondent, a trade matching company, for alleged failure to comply with registration requirements. The SEC alleges Respondent failed to comply with certain conditions imposed as a requirement of registration exemption.  Respondents have agreed to pay a civil penalty of $2,000,000.

SEC Order

SEC Administrative Summary
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In re GFI Securities, LLC (A.P. Sept. 27, 2019, Settled)

Action against Respondent, an interdealer broker, for alleged failure to maintain client confidentiality. The SEC alleges that Respondent promised its clients confidentiality in trades, but disclosed material and identifying information about some clients to other firms without client consent.  Respondent has agreed to pay a civil penalty of $4,300,000.

SEC Order

SEC Administrative Summary
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In re BMO Harris Financial Advisors, Inc., and BMO Asset Management Corp. (A.P. Sept. 27, 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.  Respondents agreed to pay disgorgement of $25,000,000, prejudgment interest of $4,733,542, and a civil penalty of $8,250,000.   

SEC Order
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In re BrixInvest (A.P. Sept. 26, 2019, Settled)

Action against Respondent, a real estate investment trust (REIT) investment adviser, for allegedly acting as an unregistered broker-dealer. The SEC alleges that Respondent utilized direct-to-consumer trades of REIT shares without registering as a broker-dealer.  Respondent agreed to pay a civil penalty of $300,000.

SEC Order

SEC Administrative Summary
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In re Mahesh Agarwal (A.P. Sept. 26, 2019, Settled)

Action against Respondent, a bond trader, for alleged fraud. The SEC alleges that Respondent engaged in bond transactions that exceeded his authority and mismarked bond trade values to conceal the resulting losses.  Respondent has agreed to one-year collateral, penny-stock, and investment-company suspensions, and to pay a civil penalty of $80,000.

SEC Order

SEC Administrative Summary
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In re Cetera Investment Advisers LLC (A.P. Sept. 26, 2019, Settled)

Action against Respondent, a registered investment adviser, for alleged violation of solicitation activity rules.  The SEC alleges that Respondent gave cash payments to banks who solicited clients without requiring the solicitors to disclose this fact.  Respondent agreed to pay a civil penalty of $185,000.

SEC Order
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In re ECP Manager LP (A.P. Sept. 26, 2019, Settled)

Action against Respondent, a registered investment adviser, for allegedly overbilling clients for investment management fees.  According to the SEC, Respondent had warrants that expired valued at $0, but included their full, pre-expiration value when calculating net assets for charging fees.  Respondent has agreed to pay disgorgement of $102,304, prejudgment interest of $20,352, and a civil penalty of $75,000.

SEC Order
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In re Hefren-Tillotson, Inc. (A.P. Sept. 25, 2019, Settled)

Action against Respondent, a registered investment adviser, for alleged overbilling.  The SEC alleges that Respondent initially passed the cost of certain trades along to its clients, but when costs fell, failed to pass along savings.  Respondent has agreed to pay disgorgement of $254,060, prejudgment interest of $45,905.29, and a civil penalty of $80,000.

SEC Order

SEC Administrative Summary
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In re Leonardo Cornide and Jorge Falcon (A.P. Sept. 25, 2019, Settled)

Action against Respondents, registered investment advisers, for alleged failure to disclose conflicts of interest.  The SEC alleges that Respondents did not disclose their ownership and other interests in a company in which Respondents invested client money. Respondents have agreed to pay disgorgement of $2,786,925 and prejudgment interest of $274,107.19, and to pay a civil penalty of $100,000 each.

SEC Order

SEC Administrative Summary
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In re TMC Bonds, LLC (A.P. Sept. 24, 2019, Settled)

Action against Respondent, a registered broker-dealer, for alleged failure to maintain client confidentiality.  The SEC alleges that Respondent promised its clients confidentiality in bond trades, but then disclosed identifying information about clients to other firms without receiving client consent.  Respondent agreed to pay a civil penalty of $2,100,000.

SEC Order
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In re Strategic Planning Group, Inc., et al. (A.P. Sept. 24, 2019, Settled)

Action against Respondents, a registered investment adviser and its principal officers, for alleged failure to disclose conflicts of interest.  The SEC alleges that Respondents invested client funds into a company in which Respondents had financial interests and failed to disclose this to clients.  Respondent investment adviser has agreed to pay a civil penalty of $200,000.  Respondent individuals have agreed to pay civil penalties of $75,000 each.

SEC Order

SEC Administrative Summary
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In re PricewaterhouseCoopers LLP (A.P. Sept. 23, 2019, Settled); In re Brandon Sprankle (A.P. Sept. 23, 2019, Settled)

Actions against Respondents, an accounting firm and its partner, for an alleged violation of auditor-independence rules.  The SEC alleges that Respondents violated auditor independence rules by providing prohibited non-audit services to one SEC-registered audit client.  Additionally, the SEC alleged that Respondent firm violated PCAOB Rule 3525 for that same SEC-registered audit client and fourteen others.  Respondent firm has agreed to pay disgorgement of $3,830,213, prejudgment interest of $613,842, and a civil penalty of $3,500,000.  Respondent
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In re Sigma Planning Corp. (A.P. Sept. 17, 2019, Settled)

Action against Respondent, an investment adviser, for alleged failure to disclose conflicts of interest.  The SEC alleges that Respondent advised clients to purchase higher-cost mutual shares and failed to disclose its financial gain in doing so.  Respondent agreed to pay disgorgement of $1,920,809, prejudgment interest of $225,909, and a civil penalty of $400,000.

SEC Order

SEC Administrative Summary
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In re Morgan Stanley Smith Barney (A.P. Sept. 17, 2019, Settled)

Action against Respondent, a registered broker-dealer and municipal securities dealer, for alleged violations of suitability regulations promulgated by the Municipal Securities Rulemaking Board.  The SEC alleges that Respondent encouraged clients to “swap” municipal bonds for near-identical bonds, without any corresponding benefit, and without a satisfactory suitability basis.  Respondent has agreed to pay a civil penalty of $225,000.

SEC Order

SEC Administrative Summary
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In re Raymond James & Associates, et al. (A.P. Sept. 17, 2019, Settled)

Action against Respondents, a registered broker-dealer and its affiliated entities, for allegedly failing to perform periodic investment suitability reviews, implement sufficient suitability compliance, and to recommend suitable investments.  Respondents have agreed to pay disgorgement of $11,098,349.01, prejudgment interest of $1,072,764.80, and a civil penalty of $3,000,000.

SEC Order

SEC Press Release
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In re John Lawrence (A.P. Sept. 16, 2019, Settled); In re Heraeus Metals New York LLC (A.P. Sept. 16, 2019, Settled)

Actions against Respondents, a commodities trader and his employer, for alleged spoofing. According to the CFTC, Respondent placed orders for precious metals futures contracts with the intent to cancel them before execution to manipulate prices and encourage execution of orders Respondent wanted filled. Respondent trader has agreed to a four-month trading bar and to pay a $130,000 civil monetary penalty, and Respondent employer has agreed to pay a $900,000 civil monetary penalty.

CFTC Order (Trader)
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In re AST Investment Services, Inc., and PGIM Investments LLC (A.P. Sept. 16, 2019, Settled)

Action against Respondents, two investment advisers, for alleged failure to disclose conflicts of interest.  The SEC alleges that Respondents allowed a change in the fund’s securities lending practices that would benefit the client fund’s parent company at the expense of fund shareholders and issued misleading information to fund shareholders about this practice.  Respondents have agreed to pay, jointly and severally, disgorgement of $27,632,560 and a civil penalty of $5,000,000.

SEC Order

SEC Press Release
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In re Christian Trunz (A.P. Sept. 16, 2019, Settled)

Action against Respondent, a precious metals trader, for alleged spoofing.  According to the CFTC, Respondent placed orders for precious metals futures contracts with the intent to cancel them before execution to manipulate prices.  The CFTC has reserved decision on sanctions against Respondent pending fulfillment of his cooperation agreement with the CFTC. Respondent previously pleaded guilty in a parallel criminal action in the Eastern District of New York.

CFTC Order 

CFTC Press Release
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CFTC v. Michael Nowak and Gregg Smith (N.D. Ill. Sept. 16, 2019, Contested)

Action against Defendants, two traders at a bank, for alleged spoofing.  According to the CFTC, Defendants placed orders for precious metals futures contracts with the intent to cancel them before execution to manipulate prices and encourage execution of orders Defendants wanted filled.  A parallel criminal action has been brought against Defendants in the Northern District of Illinois.

CFTC Complaint 

CFTC Press Release
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