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

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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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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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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 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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SEC v. NL Technology, LLC, et al. (S.D. Cal. Sept. 27, 2018, Partially Settled and Partially Contested)

Action against Defendants, an electronics sale and repair company, its president, and his business partner, in connection with an alleged Ponzi scheme.  According to the SEC, Defendants raised funds from investors by falsely informing them that the money would be used for an electronics import business and promising high returns in a short period of time.  The SEC alleges that the wholesale business did not exist and that Defendants used the money for  personal expenses
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SEC v. William C. Skelley and Sohin S. Shah (S.D.N.Y. Sept. 26, 2018, Contested)

Action against Defendants, co-founders of a crowdfunding portal, for alleged misappropriation of investor funds.  According to the SEC, Defendants made fraudulent claims about their company’s plans to build an online crowdfunding portal in order to raise funds from investors.  The SEC alleges that Defendants instead used this money for personal use.  The SEC further alleges that one of the Defendants made materially false and misleading oral statements and, with the company, written statements to investors
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In re Peter Grady (A.P. Sept. 26, 2018, Settled); In re Adam Flavin (A.P. Sept. 26, 2018, Settled)

Actions against Respondents, two traders at a commodity merchandising firm, for alleged attempts to manipulate the price of wheat futures and options contracts.  According to the CFTC, Respondents and others attempted to manipulate the price of particular wheat futures and options contracts through the purchase and cancellation of wheat shipping certificates.  The first Respondent trader has agreed to pay a civil penalty of $125,000, and the second Respondent trader has agreed to pay a civil
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In re Kooima Kaemingk, et al. (A.P. Sept. 26, 2018, Settled)

Action against Respondents, a registered introducing broker, its Vice President and co-owner, and its President and co-owner, in connection with Respondent Vice President’s alleged fraud, unauthorized trading, and false and misleading statements to a financial market company; a former employee’s fraud, unauthorized trading, and violation of the financial market company’s position limits in certain futures contracts; and for Respondents’ supervision failures.  Respondents have agreed to pay, jointly and severally, restitution of $11,920,857.50 and a civil
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SEC v. James Thomas Bramlette, et al. (D. Utah Sept. 26, 2018, Partially Settled and Partially Contested)

Action against Defendants, four individuals and their associated entities, in connection with alleged fraud on investors.  According to the SEC, Defendants promised investors unrealistically high returns on investments on a resort that was, in reality,  uninhabitable and suffering losses.  The SEC alleges that Defendants had lost their ownership of the resort when they defaulted on loans, but continued to raise money from investors without disclosing the loss.  The SEC further alleges that one Defendant diverted
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CFTC v. Yehuda L. Belsky and Y Trading, LLC (E.D.N.Y. Sept. 26, 2018, Contested)

Action against Defendants, a company and its sole owner, for alleged fraudulent solicitations, false statements to the CFTC about this trading, and failure to register with the CFTC as a Commodity Trading Advisor.  According to the CFTC, Defendant owner solicited funds from customers to trade binary options on their behalf by making false and misleading claims that he was an experienced and successful trader.  The CFTC also alleges that Defendant owner violated a 2008 CFTC
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In re Mizuho Bank, Ltd. (A.P. Sept. 21, 2018, Settled)

Action against Respondent, a Japanese corporation that engages in proprietary futures trading in the United States, for alleged spoofing.  The CFTC alleges that one of Respondent’s employees placed orders in Treasury and Eurodollar futures contracts intending to cancel them before execution.  Respondent has agreed to pay a civil penalty of $250,000 and post-judgment interest.

CFTC Press Release 

CFTC Order
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In re Geneva Trading USA, LLC (A.P. Sept. 20, 2018, Settled)

Action against Respondent, a proprietary trading firm, for alleged spoofing in markets for gold, heating oil, RBOB gasoline, platinum, crude oil, and various food products.  The CFTC alleges that three of Respondent’s employees regularly placed larger orders on one side of the market, intending to cancel those orders before execution of smaller orders also placed by Respondent.  Respondent has agreed to pay a civil penalty of $1.5 million and post-judgment interest.

CFTC Press Release   

CFTC
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In re Victory Asset, Inc. (A.P. Sept. 19, 2018, Settled); In re Michael D. Franko (A.P. Sept. 19, 2018, Settled)

Action against Respondents, a commodity pool operator and commodity trading advisor and one of its former directors, for alleged cross-market spoofing.  The CFTC alleges that Respondents’ practice was to repeatedly place bids or offers for futures contracts in copper and gold on COMEX and crude oil  on NYMEX with the intent to cancel larger orders before execution of smaller orders.  The Corporate Respondent has agreed to pay a civil penalty of $1.8 million and post-judgment
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In re Michael L. LaPenna (A.P. Sept. 19, 2019, Settled)

Action against Respondent, the sole member of a credit repair and loan brokerage firm, in connection with alleged fraudulent promotion of unregistered securities.  According to the SEC, Respondent falsely advertised an investment program to clients, claiming they would receive a return worth several times their principal in less than 60 days.  The SEC also alleges that Respondent falsely claimed that investors’ money would be held in an escrow account when money was instead transferred to
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In re Phillip R. Grogan, Esq. (A.P. Sept. 19, 2018, Settled)

Action against Respondent lawyer in connection with an alleged fraudulent investment scheme.  According to the SEC, Respondent transferred investor funds from his account to the account of another participant in the scheme in order to falsely represent to investors that their funds were in escrow.  Respondent has agreed to pay disgorgement of $3,050, prejudgment interest of $248, and a civil penalty of $3,050.

SEC Litigation Release 

SEC Order
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SEC v. Leroy “Lee” Young and Young Capital Management, LLC (S.D. Cal. Sept. 19, 2018, Settled)

Action against Defendants, a hedge fund and its sole member and owner, in connection with alleged fraudulent sales of unregistered securities. According to the SEC, Defendants raised funds from investors while falsely representing that investors would receive high returns and that their money would be used to initiate the fund. The SEC further alleges that Defendant owner instead used the funds for personal expenses. Defendant individual has agreed to pay disgorgement of $336,450, prejudgment interest
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