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

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In re Fieldstone Financial Management Group, LLC and Kristofor R. Behn (A.P. July 1, 2019, Settled)

Action against Respondents, an investment advisor and its principal, for alleged fraud.  According to the SEC, Respondents defrauded retail investors by failing to disclose conflicts of interest related to their investment recommendations and misusing investor funds for personal expenses.  Respondents have agreed to pay disgorgement and prejudgment interest of $1,047,971, as well as a penalty of $275,000.

SEC Order

SEC Press Release
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In re Edward Dean Goss (A.P. July 1, 2019, Contested), In re Kenneth S. Goss (A.P. July 1, 2019, Contested); In re Jonathan E. Shoucair (A.P. July 1, 2019, Contested)

Actions against Respondents, employees of a consulting firm, for allegedly offering unregistered securities in that firm.  According to the SEC, Respondents raised investor funds through the unregistered offer and sale of securities in the consulting firm and failed to disclose transaction-based compensation paid to the firm’s solicitors.

SEC Order (Edward Dean Goss)

SEC Order (Kenneth S. Goss)

SEC Order (Jonathan E. Shoucair)
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SEC v. Thomas V. Conwell and Kerry L. Hoffman (N.D. Ill. July 1, 2019, Contested); In re GT Media, Inc. (A.P. July 1, 2019, Settled)

Actions against Defendants, an investment-advisor representative and his business associate, and Respondent, a mothers’ lifestyle media company for whom Defendants worked, for fraud and registration failures, respectively. According to the SEC, Defendants falsely represented to investors that Respondent would soon conduct an IPO and misappropriated investor funds for personal expenses. The SEC further alleges that Respondent offered and sold unregistered common stock. Respondent has agreed to pay a civil money penalty of $173,436.

SEC Complaint
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CFTC v. John Doe 1 a/k/a Morgan Hunt d/b/a Diamonds Trading Investment House, and John Doe 2 a/k/a Kim Hecroft d/b/a First Options Trading (N.D. Tex. June 28, 2019, Contested)

Action against Defendants, traders and portfolio managers, for an alleged fraudulent investment scheme.  According to the CFTC, Defendants solicited Bitcoin from investors and falsely claimed they would use the funds for their investors’ benefit.  The CFTC also alleges that Defendants misrepresented their experience and track records and misappropriated investor funds.  The court ordered that Defendant Hunt pay restitution of $3,941.35 plus post-judgment interest and a civil monetary penalty of $180,000.  The court also ordered that
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SEC v. Robert F.X. Sillerman (S.D.N.Y. June 28, 2019, Settled)

Action against Defendant, the former CEO of an online media company, for alleged offering fraud.  According to the SEC, Defendant misappropriated funds raised during his company’s public securities offering.  The SEC also alleges that Defendant misled investors by, among other things, falsely representing that two celebrities were among the investors in the company.  Defendant agreed to pay a civil penalty of $179,000 and to an officer-and-director bar.

SEC Complaint

SEC Litigation Release
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SEC v. Johnny R. Thomas, et al. (D. Nev. June 28, 2019, Contested); In re R. Gordon Jones, CPA (A.P. June 28, 2019, Settled); In re S. Jeffrey Jones, CPA (A.P. June 28, 2019, Settled)

Actions against Defendants, four former executives of an energy services company, and Respondents, two accountants, for alleged fraud and professional misconduct.  According to the SEC, Defendants misled investors by, among other misrepresentations, inflating the number of power plants that the company was building.  The SEC alleges that one Respondent accountant aided Defendants in perpetrating the fraud, and that the other Respondent accountant failed to audit the company in accordance with PCAOB standards.  Respondents have agreed
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In re Eagle Market Makers, Inc. (A.P. June 28, 2019, Settled)

Action against Respondent, a commodities trading firm, for alleged noncompetitive wash sales.  According to the CFTC, Respondent circumvented the “lockdown” period before market open, during which pre-open orders cannot be modified or cancelled.  The CFTC alleges that Respondent improperly placed additional, offsetting orders to cancel its pre-open orders, which resulted in noncompetitive wash sales upon market open.  Respondent has agreed to pay a civil penalty of $350,000.

CFTC Order

CFTC Press Release
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SEC v. Henry Sargent, et al. (D. Mass. June 27, 2019, Contested)

Action against Defendants, four attorneys and a real estate agent, for alleged microcap fraud.  According to the SEC, Defendants formed a microcap company and issued shares to friends, family, and co-workers.  The SEC alleges that Defendants then filed a Form S-1 that falsely stated that the shareholders had acquired the shares for investment purposes and that Defendants did not control the shares.  According to the SEC, Defendants subsequently sold shares of the microcap firm to
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SEC v. Mark Allen Plumber (N.D. Tex. June 26, 2019, Settled)

Action against Defendant, the principal of an oil company, for alleged misappropriation.  According to the SEC, Defendant solicited investor funds to be used in oil well projects and then used a portion of the funds to pay personal expenses.  Defendant has agreed to pay disgorgement of $399,011, prejudgment interest of $33,008, and a civil penalty of $75,000.

SEC Complaint

SEC Litigation Release
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SEC v. Jason Sugarman, et al. (S.D.N.Y. June 26, 2019, Contested)

Action against Defendant, a former director of a broker-dealer and investment adviser, for alleged fraud.  According to the SEC, Defendant and his associate perpetrated a complex fraudulent scheme in which they gained control of certain investment advisers, used the funds managed by the advisers to buy Native American tribal bonds, and misappropriated the proceeds of the bond sales from the tribe.  The SEC also alleges that Defendant and his associate acquired and misappropriated funds from
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SEC v. Worldwide Markets, Ltd., et al. (D.N.J. June 25, 2019, Contested)

Action against Defendants, a broker, its CEO, and its affiliate, for alleged offering fraud.  According to the SEC, Defendants offered foreign investors the opportunity to trade in U.S. stocks but instead provided the investors with singe-security contracts for difference, misappropriated investor funds, and failed to fulfill any withdrawal requests from customers.  The SEC also alleges that Defendants failed to transact on a registered national exchange and register as a broker.

SEC Complaint

SEC Litigation Release
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In re Merrill Lynch Commodities, Inc. (A.P. June 25, 2019, Settled)

Action against Respondent, a provisionally registered swap dealer, for alleged spoofing.  According to the CFTC, Respondent placed orders for futures contracts with the intent to cancel the orders before execution in order to manipulate prices.  Respondent has agreed to pay restitution of $2,364,585, disgorgement of $11,100,000, and a civil penalty of $11,500,000.

CFTC Order

CFTC Press Release
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SEC v. Donald S. LaGuardia, Jr. (S.D.N.Y. June 24, 2019, Contested)

Action against Defendant, the principal of an investment adviser, for alleged fraud.  According to the SEC, Defendant misappropriated money from funds managed by the investment adviser  and then falsified entries in the funds’ books, statements, and other documents to conceal the misappropriation and inflate the funds’ values.

SEC Complaint

SEC Litigation Release
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SEC v. Landon M. Smith (D. Utah June 23, 2019, Contested)

Action against Defendant, the principal of a real-estate firm, for alleged fraud.  According to the SEC, Defendant solicited investor funds for a supposed property-flipping business.  Instead of buying properties, the SEC alleges that Defendant used the funds to pay personal expenses and to make Ponzi-like payments to earlier investors.  The SEC further alleges that Defendant forged signed real-estate contracts to conceal the scheme.

SEC Complaint

SEC Litigation Release
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The Kane Capital Investment Group, LLC, and Amrit Jaswant Singh Chahal (E.D.V.A. June 20, 2019, Settled)

Action against Defendants, a commodity pool operator and its principal, for alleged fraud.  According to the CFTC, Defendants solicited investor funds based on false claims about the pool’s trading profits and size, among other misrepresentations.  The CFTC further alleges that Defendants misappropriated investor funds and made Ponzi-like payments to earlier investors.  Defendants have agreed to pay restitution of $1,232,510.41. Defendant principal has pleaded guilty to fraud charges in a parallel criminal action and has been
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SEC v. Anatoly Hurgin, et al. (S.D.N.Y. June 18, 2019, Contested); In re Benjamin H. Gordon (A.P. June 20, 2019, Settled)

Action against Defendants, an intelligence communications company, its subsidiary, its CEO, and its CTO, and Respondent, former CEO of a Special Purpose Acquisition Company (SPAC), for alleged fraud in connection with an acquisition.  According to the SEC, Respondent formed a SPAC to acquire Defendant company.  The SEC alleges that Defendants misled the SPAC’s shareholders about Defendant company’s new products and customer orders and that Respondent negligently failed to verify the information that shareholders received.  Respondent
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SEC v. Equal Earth, Inc., et al. (S.D. Cal. June 17, 2019, Settled)

Action against Defendants, an energy company and two of its executives, for alleged offering fraud.  According to the SEC, Defendants solicited investor funds based on misrepresentations about the company’s finances and contracts.  The SEC also alleges that one Defendant executive sold his stock in the company at the time of the misrepresentations and misappropriated investor funds.  Defendant company has agreed to pay disgorgement and prejudgment interest of $6.8 million and a civil penalty of $855,000. 
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CFTC v. Control-Finance Limited and Benjamin Reynolds (S.D.N.Y. June 17, 2019, Contested)

Action against Defendants, a U.K-based Bitcoin trading and investment company and its principal, for an alleged $147 million Ponzi and pyramid scheme.  According to the CFTC, Defendants made false guarantees of daily trading profits and other misrepresentations to induce investors to purchase Bitcoin and transfer the Bitcoin to Defendants.  The CFTC alleges that Defendants made no trades on investors’ behalf and instead misappropriated investor funds to, for example, make Ponzi-like payments to earlier investors.  The
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In re David Vogel, CPA (A.P. June 14, 2019, Settled)

Action against Respondent, a former senior vice president of finance at a software company, for alleged accounting fraud.  According to the SEC, Respondent improperly recognized revenue, resulting in an understatement of the company’s liabilities and an overstatement of stockholder equity.  Respondent has agreed to pay a civil penalty of $15,000.

SEC Order
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SEC v. David Wagner, et al. (S.D.N.Y. June 14, 2019, Contested)

Action against Defendants, an investment adviser, his partner, and their three companies, for an alleged fraudulent investment scheme.  According to the SEC, Defendants operated funds that purportedly invested in healthcare and healthcare technology companies and provided false information regarding available fund reserves to solicit new investors.  The SEC also alleges that Defendant investment adviser caused the fund to pay him undisclosed management fees.  A parallel criminal case has been brought against Defendant investment adviser and
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SEC v. Richard Vu Nguyen, et al. (C.D. Cal. June 13, 2019, Contested)

Action against Defendants, an investment firm and its principal, and Relief Defendant, the principal’s girlfriend, for alleged fraud.  According to the SEC, Defendant principal solicited investor funds by misrepresenting his investing experience, concealing his criminal record, and falsely promising high returns.  The SEC also alleges that Defendant misappropriated investor funds to pay personal expenses.

SEC Complaint

SEC Litigation Release
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SEC v. Alton Perkins, et al. (E.D.N.C. June 13, 2019, Contested)

Action against Defendants, an owner of export companies and two of those companies, for alleged fraud.  According to the SEC, Defendant exporter misappropriated investor funds and misrepresented the intended use of those funds to investors.  The SEC also alleges that Defendants hid Defendant exporter’s criminal background, violated securities registration requirements, and made false representations in public filings.

SEC Complaint

SEC Litigation Release
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