Blog Posts Tagged With SEC

In re LendingClub Asset Management, LLC, f/k/a LC Advisors, LLC, et al. (A.P. Sept. 28, 2018, Settled)

Action against Respondents, an investment adviser, its former CEO, and its former CFO, for alleged Investment Advisers Act violations in connection with the fraudulent use of money from private funds.  According to the SEC, Respondent adviser, through Respondent CEO, caused one of its private funds to purchase interests in risky loans in order to benefit Respondent adviser.  The SEC alleges that these purchases did not comply with the procedures provided in Respondent adviser’s Form ADV. 
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In re Credit Suisse Securities (USA) LLC (A.P. Sept. 28, 2018, Settled)

Action against Respondent, a broker-dealer, for alleged misrepresentations and omissions related to the handling of orders by Respondent’s now defunct Retail Execution Services business.    According to the SEC, despite advertising its access to “dark pool” liquidity in marketing materials, Respondent executed few held orders in “dark pools”.  The SEC further alleges that Respondent failed to disclose that retail customers would not receive price improvement on non-reportable orders and, contrary to claims to customers, Respondent routed
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In re COR Clearing, LLC (A.P. Sept. 28, 2018, Settled)

Action against Respondent, a clearing firm, in connection with alleged failure to file Suspicious Activity Reports (SARs) for sales of penny stock shares. The SEC alleges that some customers of Respondent’s introducing broker-dealers deposited significant amounts of penny stocks, sold them into the market, and withdrew the proceeds from their accounts.  According to the SEC, Respondent did not file SARs with respect to some of these transactions.  Respondent has agreed to pay an $800,000 civil
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In re Walgreens Boots Alliance, Inc., et al. (A.P. Sept. 28, 2018, Settled)

Action against Respondents, a corporation, its former CEO and Director, and its former CFO, for alleged failure to disclose an increased risk that Respondent company may not meet a financial projection.  Respondent company has agreed to pay a civil penalty of $34.5 million.  Respondents former CEO and former CFO have each agreed to pay a civil penalty of $160,000.

SEC Order 

SEC Press Release
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In re Stryker Corporation (A.P. Sept. 28, 2018, Settled)

Action against Respondent, a medical technology corporation, for alleged violations of the FCPA’s books and records and internal accounting controls provisions.  According to the SEC, Respondent was unable to detect improper transactions and potential improper payments for sales in China, India, and Kuwait due to inadequate internal accounting controls, and Respondent’s Indian subsidiary maintained incomplete and inaccurate books and records.  Respondent has agreed to pay a civil penalty of $7.8 million.

SEC Order 

SEC Press
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SEC v. Nutra Pharma Corp., et al. (E.D.N.Y. Sept. 28, 2018, Contested)

Action against Defendants, a microcap issuer, its CEO, and one of its consultants, for alleged material misstatements, sales of unregistered securities, manipulative trading, and failure to submit required filings.  According to the SEC, Defendant issuer and Defendant CEO published several press releases falsely implying that Defendant issuer was selling its product internationally and expanding and improving its facilities.  The SEC further alleges that Defendant CEO’s manipulative trading created the illusion of active trading and inflated
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In re Mota Group, Inc. and Mota “Michael” Faro (A.P. Sept. 28, 2018, Settled)

Action against Respondents, a drone company and its founder, for the alleged filing of inaccurate financial statements in connection with Respondent company’s planned IPO.  The SEC alleges that information given by Respondents to an auditing firm about a distribution agreement was inaccurate, which caused the recognition of excessive revenue.  Respondent company has agreed to withdraw and certify the withdrawal the registration statement at issue.  Respondent founder has agreed to pay a civil penalty of $10,000.
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In re COR Clearing, LLC (A.P. Sept. 28, 2018, Settled)

Action against Respondent, a clearing firm, in connection with alleged failure to file Suspicious Activity Reports (SARs) for sales of penny stock shares. The SEC alleges that some customers of Respondent’s introducing broker-dealers deposited significant amounts of penny stocks, sold them into the market, and withdrew the proceeds from their accounts. According to the SEC, Respondent did not file SARs with respect to some of these transactions. Respondent has agreed to pay an $800,000 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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In re Unal Patel and Amish Patel (A.P. Sept. 28, 2018, Settled)

Action against Respondents, a CPA and a doctor, for allegedly trading while in possession of confidential information regarding an impending acquisition. According to the SEC, Respondent CPA received material nonpublic information from a friend who learned of an acquisition through his employer. The SEC alleges that Respondent CPA shared the confidential information with Respondent doctor, and both Respondents purchased call options in the target company while in possession of the confidential information. Respondent CPA has
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SEC v. Bryan R. Ziegenfuse (E.D. Pa. Sept. 28, 2018, Settled)

Action against Defendant, a former mortgage loan servicing company vice president, for alleged insider trading. The SEC alleges that Defendant learned of his employer’s planned acquisition of another company and received emails regarding the merger prior to the public announcement. According to the SEC, Defendant used a family member’s account to purchase shares and options before the announcement of the acquisition and while in possession of the material nonpublic information. The SEC further alleges that
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In re Credit Suisse Securities (USA) LLC (A.P. Sept. 28, 2018, Settled)

Action against Respondent, a broker-dealer, for alleged misrepresentations and omissions related to the handling of orders by Respondent’s now defunct Retail Execution Services business.  According to the SEC, despite advertising its access to “dark pool” liquidity in marketing materials, Respondent executed few held orders in “dark pools”. The SEC further alleges that Respondent failed to disclose that retail customers would not receive price improvement on non-reportable orders and, contrary to claims to customers, Respondent routed
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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 LendingClub Asset Management, LLC, f/k/a LC Advisors, LLC, et al. (A.P. Sept. 28, 2018, Settled)

Action against Respondents, an investment adviser, its former CEO, and its former CFO, for alleged Investment Advisers Act violations in connection with the fraudulent use of money from private funds. According to the SEC, Respondent adviser, through Respondent CEO, caused one of its private funds to purchase interests in risky loans in order to benefit Respondent adviser. The SEC alleges that these purchases did not comply with the procedures provided in Respondent adviser’s Form ADV.
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In re Putnam Investment Management, LLC and Zachary Harrison (A.P. Sept. 27, 2018, Settled)

Action against Respondents, an investment adviser and a former portfolio manager and RMBS trader, in connection with alleged preferential treatment of select advisory clients.  According to the SEC, Respondent manager executed prearranged RMBS cross trades with broker-dealers, informing some clients that the securities would be repurchased the next day at a slightly higher price.  The SEC alleges that Respondent manager’s arrangement was preferable for some clients over others and that Respondent adviser failed to supervise
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SEC v. Goldsky Asset Management, LLC and Kenneth Grace (S.D.N.Y. Sept. 27, 2018, Contested)

Action against Defendants, an investment adviser and its owner, for alleged false and misleading statements on its website and in SEC filings.  According to the SEC, Defendant adviser’s hedge fund did not employ an auditor, prime broker, or custodian, despite Defendant adviser’s representations on its Forms ADV.  The SEC also alleges that Defendant adviser falsely represented that it managed more in discretionary assets than it actually did and Defendant adviser’s website misstated its past returns.
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SEC v. Salix Pharmaceutical, Ltd. (S.D.N.Y. Sept. 27, 2018, Settled); SEC v. Adam C. Derbyshire (S.D.N.Y. Sept. 27, 2018, Settled)

Actions against Defendants, a pharmaceutical company and its former CFO, for alleged material misstatements and omissions to investors and analysis.  According to the SEC, Defendants provided misleading information on inventory levels of Defendant company’s drugs and failed to disclose the effect of the excess supply on future earnings.  Defendant CFO has agreed to pay $558,534 in disgorgement and prejudgment interest and a civil penalty of $494,836.  Defendant company has agreed to be enjoined from future
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 SEC v. Elon Musk (S.D.N.Y. Sept. 27, 2018, Settled); SEC v. Tesla, Inc. (S.D.N.Y. Sept. 29, 2018, Settled)

Action against Defendants, a car company and its CEO and former Chairman, in connection with a series of allegedly false and misleading Twitter communications by Defendant CEO.  According to the SEC, Defendant CEO tweeted to followers that, subject to a shareholder vote, Defendant company had secured sufficient funding to go private at a higher price than its trading price.  The SEC alleges that Defendant CEO knew that the transaction was not definite and that he
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In re Petróleo Brasileiro S.A. – Petrobras (A.P. Sept. 27, 2018, Settled)

Action against Respondent, an oil and gas company, for misleading investors in connection with an alleged corruption scheme.  According to the SEC, some of Respondent’s former senior executives, in conjunction with Respondent’s contractors and suppliers, raised the cost of infrastructure projects in order to receive kickbacks which were then paid to foreign politicians and political parties who had helped the senior executives obtain their titles with Respondent.  The SEC further alleges that the former executives
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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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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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In re Thomas Earl Hayden, II, et al. (A.P. Sept. 27, 2018, Settled)

Action against Respondents, a beverage company manager, his father, and a family friend, for allegedly tipping confidential information learned by the manager and trading while in possession of that information. According to the SEC, Respondent manager shared information regarding an impending deal involving his company and another beverage company with his father and family friend. Respondents purchased shares in Respondent manager’s company while in possession of this information. Respondent employee has agreed to pay disgorgement
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In re Gary Bernard Ross (A.P. Sept. 27, 2018, Settled)

Action against Respondent, an investment adviser principal and licensed attorney, for alleged insider trading. According to the SEC, Respondent learned of a forthcoming partnership between two beverage companies from his advisory client and purchased common stock in one of the companies while in possession of the confidential information and prior to the public announcement of the partnership. Respondent has agreed to pay disgorgement of $86,117.82, prejudgment interest of $12,864.41, and a civil penalty of $86,117.82.
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