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

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SEC v. Gil Beserglik, et al. (C.D. Cal. Sept. 26, 2019, Contested)

Action against Defendants, binary option brokerage firms and their owners, for alleged fraud.  The SEC alleges that Defendants solicited investor funds for binary option trading based on false claims about their identities, compensation, and investing track record.  The SEC further alleges that Defendant brokerage firms did not honor client withdrawal requests.

SEC Complaint

SEC Litigation Release
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In re Harold Minsky (A.P. Sept. 25, 2019, Settled); In re Chip Hackley (A.P. Sept. 25, 2019, Settled); In re George Martin (A.P. Sept. 25, 2019, Settled)

Actions against Respondents, three financial-services professionals, for alleged price manipulation.  The SEC alleges that Respondents planned to manipulate the stock price of a company they owned by entering matched trades. Respondents agreed to bars against trading or promoting penny stocks.

SEC Order (Martin)

SEC Order (Hackley)

SEC Order (Minsky)
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SEC v. Andres Fernandez and Edison Denizard (M.D. Fla. Sept. 25, 2019, Contested)

Action against Defendants, principals of a music entertainment company, for alleged fraud. The SEC alleges that Defendants solicited investments in music concert venues and used the proceeds to make Ponzi-like payments to earlier investors and to pay personal expenses.

SEC Complaint

SEC Litigation Release
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In re Gary F. Pryor and The Pinnacle Companies, LLC (A.P. Sept. 25, 2019, Settled)

Action against Respondents, an adviser to a bond-collecting company and his purported shell company, for alleged fraud.  The SEC alleges that Respondent sold defaulted Chinese bonds based on misrepresentations about their prices and other matters and used investor funds to pay personal expenses.  Respondent has agreed to pay disgorgement of $1,112,000, prejudgment interest of $189,427, and a civil penalty of $189,427.

SEC Order

SEC Administrative Summary
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SEC v. Hologram USA Networks Inc. and Alkiviades David (S.D.N.Y., Sept. 24, 2019, Contested)

Action against Defendants, a performing-arts company and its owner, for an alleged unregistered offering and fraud.  The SEC alleges that Defendants offered securities based on misleading claims regarding the company’s ownership rights of celebrity images and theater arrangements.  The SEC further alleges the Defendants misled state financial regulators during the securities registration application process.

SEC Complaint

SEC Litigation Release
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SEC v. Benjamin Conde, et al. (E.D.N.Y. Sept. 23, 2019, Contested)

Action against Defendants, an individual and his two companies, for alleged fraud. The SEC alleges that Defendants hired a team to promote an energy company’s stock while manipulating its price by, coordinating matched trades.  The SEC further alleges that Defendant individual sold shares of the stock after manipulating the stock’s price.  Parallel criminal charges have been filed.

SEC Complaint

SEC Litigation Release
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SEC v. Gerald C. Parker (S.D. Fla. Sept. 23, 2019, Contested)

Action against Defendant for alleged offering fraud. The SEC alleges that Defendant solicited investment in a digital coupon company based on false claims that the funds would be used to develop and launch a mobile application. The SEC further alleges that Defendant misappropriated investor funds to pay personal expenses.  

SEC Complaint

SEC Litigation Release
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In re Marcos Tamayo and Bored at Work Retirement Services, LLC. (A.P. Sept. 20, 2019, Settled)

Action against Respondents, an airport bag handler and his limited liability company, for allegedly acting as an unregistered investment adviser and offering misleading information.  The SEC alleges the Respondent managed fellow employees’ retirement accounts by making misleading claims of investment success.  Respondent agreed to pay disgorgement of $144,485, prejudgment interest of $9,803, and a civil penalty of $50,000.

SEC Order

SEC Administrative Summary
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SEC v. Jonathan C. Lucas (S.D.N.Y. Sept. 20, 2019, Settled)

Action against Defendant, an individual, for allegedly making misrepresentations in connection with offering unregistered securities that were subject to registration. The SEC alleges that Defendant misrepresented the development of the product, the purported company’s management team, and the Defendant’s own experience. Defendant has agreed to a civil penalty of $15,000, a five-year officer and director bar, and a conduct injunction from business participation in offering unregistered securities.

SEC Complaint

SEC Litigation Release
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CFTC v. Tate Street Trading, Inc., and Leonard J. Cipolla (E.D. Va. Sept. 19, 2019, Contested)

Action against Defendants, a commodity-trading corporation and its owner, for misappropriation and fraud.  According to the CFTC, Defendants solicited funds for a futures and options trading pool and used the proceeds to make Ponzi-like payments to earlier investors and to pay personal expenses.

CFTC Complaint

CFTC Press Release
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SEC v. Ruben James Rojas (C.D. Cal. Sept. 19, 2019, Contested); In re Montebello Unified School District and Anthony James Martinez (A.P. Sept. 19, 2019, Settled)

Action against Respondents, a public school district and its superintendent, and Defendant, the district’s former Chief Business Officer, for alleged fraud in connection with a municipal bond offering. According to the SEC, Respondents and Defendants concealed an auditor’s concerns regarding fraud and internal controls, including by falsifying offering documents.  Respondent superintendent has agreed to pay a civil penalty of $10,000.   

SEC Complaint

SEC Order

SEC Litigation Release
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SEC v. Zvi Feiner, et al. (N.D. Ill. Sept. 19, 2019, Contested)

Action against Defendants, healthcare companies and their principals, for alleged fraud. According to the SEC, Defendants solicited investor funds, purportedly for use in the healthcare industry, but used the proceeds to make Ponzi-like payments to earlier investors, to pay personal expenses, and for other improper purposes.

SEC Complaint

SEC Litigation Release
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SEC v. ICOBox and Nikolay Evdokimov (C.D. Cal. Sept. 18, 2019, Contested)

Action against Defendants, a digital currency platform and its founder, for alleged fraud and registration failure.  According to the SEC, Defendants publicly offered digital tokens and made false claims that the tokens would appreciate and could be swapped for other tokens.  The SEC further alleges that Defendant company facilitated initial coin offerings without registering as a broker.

SEC Complaint

SEC Litigation Release

SEC Press Release
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SEC v. Christopher Fulco, et al. (E.D.N.Y. Sept. 18, 2019, Contested)

Action against Defendants, an investment fund and its principal, and Relief Defendant, Defendant principal’s ex-fiancé, for alleged fraud.  According to the SEC, Defendants solicited funds for purported investments in private companies that he falsely claimed would soon go public, but instead used the proceeds to pay personal expenses.

SEC Complaint

SEC Litigation Release
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SEC v. John Henderson and Global Resources Leadership LLC (N.D. Ill. Sept. 17, 2019, Contested)

Action against Defendants, an oil-trading company and its principal, for alleged offering fraud.  The SEC alleges that Defendants solicited investor funds based on misrepresenations, including false claims that the venture was backed by a Nigerian tribe that had vast gold reserves, and used investor funds to pay personal expenses.

SEC Complaint

SEC Litigation Release
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SEC v. Mediatrix Capital Inc., et al. (N.D. Ill. Sept. 17, 2019, Contested)

Action against Defendants, individuals and numerous investment funds, for alleged fraud. The SEC alleges that Defendants made material misrepresentations in soliciting investor funds for an unregistered offering, falsified account statements, used investor funds to make Ponzi-like payments to earlier investors, and used investor funds to pay personal expenses.

SEC Complaint

SEC Litigation Release

SEC Press Release
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In re Britt J. Haughland (A.P. Sept. 17, 2019, Settled); In re Tyler T. Tysdal, et al. (A.P. Sept. 17, 2019, Settled); In re Michael A. Dejager (A.P. Sept. 17, 2019, Settled)

Actions against Respondents, a portfolio manager for a purported loan company, investment advisers, and affiliated entities, for alleged fraud.  The SEC alleges that Respondents raised funds for the stated purpose of financing an athletic-loan company but used the proceeds to finance private investment funds.  The SEC further alleges that Respondent investment advisers engaged in transactions that impermissibly concentrated equity ownership of the LLC.  One Respondent has agreed to pay a civil penalty of $15,000.  A
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CFTC v. Jared J. Davis (N.D. Ohio Sept. 17, 2019, Contested)

Action against Defendant, owner of a binary options trading company, for alleged fraud. According to the CFTC, Defendant solicited customers for trades in binary options on commodities and foreign currencies while trading against customer positions and utilizing the trading platform to favor his trades over those of his customers.

CFTC Complaint

CFTC Press Release
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SEC v. Jan Atlas (S.D. Fla. Sept. 17, 2019, Contested)

Action against Defendant, an outside attorney of an investment company, for alleged offering fraud.  The SEC alleges that Defendant made misrepresentations and omissions in drafting advisory opinion letters stating that the investments being offered were not “securities” and not subject to registration.

SEC Complaint

SEC Litigation Release
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SEC v. Brian D. Barrilleaux (S.D. Tex. Sept. 17, 2019, Settled)

Action against Defendant, a penny-stock promoter, for alleged fraud. The SEC alleges that Defendant prepared and distributed misleading promotional information in connection with a penny-stock pump-and-dump scheme.  According to the SEC, Defendant failed to disclose that the members of the scheme intended to sell their shares as prices and volume rose in response to Defendant’s promotional campaigns.  Defendants have agreed to pay disgorgement and prejudgment interest of $157,075.08 and a civil penalty of $50,000. Defendant
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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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SEC v. Jay Daniel Seinfeld et al. (W.D. Tex. Sept. 16, 2019, Settled)

Action against Defendants, including a social worker, a charity, and an associated firm, for alleged fraud.  According to the SEC, Defendants used the charity to gain access to terminally ill investors who were then asked to purchase corporate bonds that pay out upon death while also relinquishing most of the proceeds to the charity.  The SEC further alleges that when purchasers passed away, Defendants split most of the profits from the bonds with other investors.
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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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