Blog Posts Tagged With Ponzi Schemes, Offering Frauds, and Other Scams

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SEC v. Jared Gabriel Forrester (S.D. Ga. Nov. 30, 2018, Settled)

Action against Defendant, the purported president and CEO of an energy company, for an alleged fraudulent offering and sale of securities in the energy company. According to the SEC, Defendant failed to disclose to investors that two individuals with previous felony convictions were actually in charge of the energy company. According to the SEC, Defendant also misrepresented that he had a substantial background in oil and gas development. The SEC further alleges that Defendant assisted
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In re Khaled Khaled (A.P. Nov. 29, 2018, Settled)

Action against Respondent, a celebrity music producer, for alleged touting violations in connection with initial coin offerings. According to the SEC, Respondent promoted three initial coin offerings on his social media accounts without disclosing that the issuers were compensating him for the publicity.  Defendant has agreed to pay disgorgement of $50,000, prejudgment interest of $2,725.72, and a civil penalty of $100,000.

SEC Order

SEC Press Release
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SEC v. Eric T. Landis and Ridgeview Capital Partners LLC (D. Mass. Nov. 29, 2018, Contested)

Action against Defendants, a self-described penny stock promoter and an entity that he controlled, for alleged manipulative trading in microcap stocks. According to the SEC, Defendant promoter falsely claimed that he would distribute promotional materials for stocks in microcap companies. The SEC alleges that Defendant promoter instead traded microcap shares himself using multiple accounts in order to appear to be generating business.

SEC Litigation Release

SEC Press Release

SEC Complaint
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In re Floyd Mayweather Jr. (A.P. Nov. 29, 2018, Settled)

Action against Respondent, a professional boxer, for alleged touting violations in connection with initial coin offerings.  According to the SEC, Respondent promoted three initial coin offerings on his social media accounts without disclosing that the issuers were compensating him for the publicity.  Respondent has agreed to pay disgorgement of $300,000, prejudgment interest of $14,775.67, and a civil penalty of $300,000.

SEC Order

SEC Press Release
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SEC v. Morrie Tobin, et al. (D. Mass. Nov. 27, 2018, Contested)

Action against Defendants, two attorneys, the head of a financial services company, and the owner of an environmental packaging company and pharmaceutical company, for their alleged role in a scheme to manipulate and illegally sell stock in the Defendant owner’s companies. According to the SEC, Defendants concealed the Defendant owner’s control of the companies and his sale of company shares. The SEC also alleges that Defendants made hidden payments to a promoter to encourage investment
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SEC v. Giga Entertainment Media, Inc., et al. (E.D.N.Y. Nov. 15, 2018, Partially Settled, Partially Contested)

Action against Defendants, a software development company and five of its former officers and directors, for alleged fraud against investors. According to the SEC, Defendants purchased sham downloads in order to improve the rating of their app and made false statements to investors about the reasons for the rating increase. The SEC alleges that Defendants also concealed from investors an individual Defendant’s prior mail fraud conviction. Two individual Defendants have agreed to pay penalties of
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SEC v. Mark Burnett, et al. (E.D.N.Y. Nov. 15, 2018, Contested)

Action against Defendants, an alleged boiler room and five individuals, for alleged fraudulent manipulation of stock prices. According to the SEC, the five individual Defendants engaged in manipulative and concealed trading practices and hired the Defendant corporation to solicit investors. Four of the individual Defendants have been charged in a parallel criminal action. A related action by the SEC against the Defendant corporation and 14 other defendants is pending.

SEC Litigation Release
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SEC v. Giga Entertainment Media, Inc., et al. (E.D.N.Y. Nov. 15, 2018, Partially Settled, Partially Contested)

Action against Defendants, a software development company and five of its former officers and directors, for alleged fraud against investors.  According to the SEC, Defendants purchased sham downloads in order to improve the rating of their app and made false statements to investors about the reasons for the rating increase.  The SEC alleges that Defendants also concealed from investors an individual Defendant’s prior mail fraud conviction.  Two individual Defendants have agreed to pay penalties of
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SEC v. Gaylen D. Rust and Rust Rare Coin, Inc. (D. Utah Nov. 15, 2018, Contested) and CFTC and Utah Division of Securities v. Rust Rare Coin Inc. and Gaylen Dean Rust (D. Utah Nov. 13, 2018, Contested)

Actions against Defendants, a trader and a rare coin company, for an alleged fraudulent investment scheme. According to the SEC and CFTC, Defendants misled investors by making false statements about a silver trading program. The SEC and CFTC allege that Defendants used investor funds to make Ponzi-like payments to earlier investors and to pay for Defendant trader’s personal and business expenses.

SEC Litigation Release

SEC Complaint 

CFTC Press Release 

CFTC Complaint
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SEC v. SeeThruEquity, LLC, et al. (S.D.N.Y. Nov. 8, 2018, Contested)

Action against Defendants, a stock research firm and its co-founders, for alleged fraud against investors. According to the SEC, Defendants published reports on issuers while falsely claiming that they had not been compensated by the issuers and did not trade in the issuers’ stocks. The SEC alleges that Defendants did in fact trade in the issuers’ stocks and had been paid by the issuers to publish the reports.

SEC Litigation Release 

SEC Complaint
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SEC v. Ricardo H. Goldman (S.D. Fla. Nov. 7, 2018, Settled)

Action against Defendant, a trader, for alleged operation of a fraudulent, unregistered brokerage. According to the SEC, Defendant informed investors that he would use their funds to open individual day trading accounts but instead commingled the funds in a single concealed account. The SEC also alleges that Defendant charged investors trading commissions and misrepresented his background and disciplinary history. Defendant has agreed to pay disgorgement of $470,000, prejudgment interest of $53,497, and a civil penalty
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SEC v. Douglas P. Simanski (W.D. Pa. Nov. 2, 2018, Settled)

Action against Defendant, a former investment adviser, for alleged offering fraud. According to the SEC, Defendant operated a Ponzi scheme, raising over $3.9 million from his customers. Instead of investing the funds, Defendant used the money to reimburse other investors and for personal use. Defendant has agreed to pay disgorgement and interest and to a lifetime securities industry bar. Defendant has pleaded guilty in a parallel criminal action.

SEC Litigation Release

SEC Press Release
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SEC v. Brian Weber and Bebida Beverage Co. (E.D.N.Y. Oct. 31, 2018, Partially Settled, Partially Contested)

Action against Defendants, a beverage company and its CEO and president, for an alleged fraudulent offering of Defendant company’s shares. According to the SEC, Defendants sold restricted shares derived from a fictitious convertible note, inflated the number of outstanding shares to avoid certain limitations, and issued press releases falsely claiming that the company was buying back shares in order to inflate the share price. Defendant CEO has agreed to pay $208,000 in disgorgement, $23,436 in
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SEC v. Sean Kelly, et al. (N.D. Ga. Oct. 26, 2018, Contested)

Action against Defendants, a stockbroker and his associated entities, for alleged investment fraud. According to the SEC, Defendant stockbroker solicited investments from consumers, including many elderly individuals, stating that the money would be invested in various products. The SEC alleges that Defendant stockbroker instead used the funds for personal expenses. Parallel criminal charges have been announced against Defendant stockholder.

SEC Litigation Release
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SEC v. Mark E. Fisher and Joseph F. Capuozzo (S.D. Fla. Oct. 22, 2018, Settled)

Action against Defendants, an attorney and a businessman, for their alleged participation in a “pump and dump” scheme. The SEC alleges that Defendants acquired penny stock shares, launched a marketing campaign to boost the stock’s liquidity and price, and then sold the shares.  Defendants have agreed to lifetime bars from participating in penny stock offerings and will pay disgorgement, interest, and civil penalties in amounts to be determined by the court. Parallel criminal charges have
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SEC v. Jean Danhong Chen, et al. (N.D. Cal. Oct. 18, 2018, Contested)

Action against Defendants, an immigration attorney, her husband, her law firm, a family friend, a family employee, and two of the couple’s owned entities, for alleged facilitation of an EB-5 visa offering fraud.  According to the SEC, Defendants received over $10 million in undisclosed commissions from sales of securities to Defendant attorney’s clients. The SEC also alleges that Defendant attorney and Defendant husband advised clients to invest in an EB-5 immigrant investor regional center that
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SEC v. Alexander C. Burns and Andrew B. Scherr (S.D.N.Y. Oct. 16, 2018, Partially Settled, Partially Contested)

Action against Defendants, owners of a defunct private equity fund, for alleged schemes to defraud advisory clients and misappropriation of client assets. According to the SEC, Defendants acquired five insurance companies and seven reinsurance trusts and caused the companies and trusts to enter into investment management agreements with registered investment advisers owned by Defendants. The SEC alleges that Defendants then caused the companies and trusts to transfer money in exchange for securities that Defendants knew
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SEC v. Bruce J. Fixelle, et al. (D.N.J. Oct. 16, 2018, Contested)

Action against Defendants, an investment adviser, his investment fund, and the fund’s unregistered investment adviser, for alleged fraud on investors. According to the SEC, Defendant investment adviser solicited funds from friends with the understanding that he would use the money to day trade. The SEC alleges that Defendant investment adviser instead misappropriated the funds for personal use.

SEC Litigation Release

SEC Press Release
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SEC v. Mitchell J. Stein (9th Cir. Oct. 11, 2018, Contested)

Action against Defendant, outside counsel to a medical device company, for allegedly engaging in a series of frauds designed to inflate the company’s stock price for his benefit.  The SEC alleges that Defendant falsified purchase orders with fictitious companies in order to increase sale numbers in SEC filings and press releases.  The Ninth Circuit affirmed the district court’s grant of summary judgment in favor of the SEC, finding that Defendant’s conviction in a parallel criminal
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SEC v. Todd Elliott Hitt, et al. (E.D. Va. Oct. 5, 2018, Settled)

Action against Defendants, a real estate developer and his asset management firms, for alleged fraud on investors. According to the SEC, Defendants misrepresented that investor money would be used for real estate projects. The SEC alleges that Defendants instead misappropriated and commingled the funds by spending the money on Ponzi-like payments to earlier investors and personal expenses. Defendants have agreed to pay civil penalties and disgorgement to be determined by the court. Parallel criminal charges
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SEC v. Eric. J. “EJ” Dalius, et al. (C.D. Ca. Oct. 3, 2018, Contested)

Action against Defendants, seven corporate entities and their owner, for an alleged Ponzi and pyramid scheme. According to the SEC, Defendants fraudulently sold securities that they purported would return 20 percent cash back on shopping purchases. The SEC alleges that Defendants paid the promised returns with funds received from other investors and used investor funds for personal expenses. The SEC further alleges that Defendants marketed their scheme by employing a pyramidal structure of affiliates.

SEC
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SEC v. Susan Werth, a.k.a. Susan Worth, et al. (C.D. Cal. Oct. 1, 2018, Contested)

Action against Defendants, a CEO, sole owner, and operator and three of her corporations, for alleged operation of an offering fraud.  According to the SEC, Defendants promised to put investor funds toward short-term, high-interest loans related to real estate projects but instead used those funds for personal expenses and to make Ponzi-like payments to earlier investors.  The SEC further alleges that Defendant CEO falsified bank statements and hid her criminal record and history of civil
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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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