Action against Defendant, an investment banking executive, for alleged insider trading. The SEC alleges that Defendant used a brokerage account under another name to place trades regarding 12 different companies prior to the announcement of market-moving events about which he had material nonpublic information through his employment, raising approximately $140,000 in illicit profits.
Action against Defendant, a registered broker-dealer, for alleged retail fraud. The SEC alleges that Defendant offered a nonexistent secure investment vehicle with guaranteed monthly interest. The SEC further alleges that Defendant used the funds for personal expenses and created fictitious account statements.
Action against Defendant, a self-described blockchain expert, for an alleged fraudulent initial coin offering scheme. The SEC alleges that Defendant misrepresented his business connections, fabricated testimonials from corporate customers, and misled investors regarding the performance of the ICO.
Action against Respondent, the sole member of an LLC promoting penny stocks, for alleged publication of an offer for sale without disclosing the consideration he was paid by the issuer. Respondent has agreed to pay $25,000 in disgorgement, $332 in prejudgment interest, and a $20,000 civil penalty.
Action against Defendants, the CEO of a microcap company and its treasurer, for allegedly defrauding investors in a penny stock scheme. The SEC alleges that Defendants entered a series of sham contracts and made material misstatements to investors regarding the company’s activities. Defendants have agreed to permanent injunctions and to bars from serving as officers or directors of public companies.
Action against Respondents, an investment adviser and its managing member, for alleged misrepresentations regarding the assets and performance of a hedge fund. The SEC alleges that Respondent manager inflated performance metrics in order to increase performance fee payouts. Respondent manager has agreed to a bar with the right to reapply, and Respondent investment adviser has agreed to pay a $160,000 civil penalty.
Action against Respondent, assistant to the sole officer and director of a microcap company, for participation in an alleged fraudulent private offering. The SEC alleges that Respondent recruited participants for sham private offerings and facilitated the transfer of shares controlled by his principal. The SEC further alleges that after covertly gaining a controlling share of a microcap company, Respondent inflated trading volume and price before exiting his position. Respondent agreed to cease and desist from ... Continue Reading
Actions against Defendants, a medical marijuana company, its CEO, and its statutory underwriters, for allegedly making misleading claims regarding the company’s business operations and financial condition, including a partnership with comedian Tommy Chong. The SEC further alleges that Defendants falsified financial statements and made an unregistered offering of securities. Defendant CEO has agreed to disgorgement and prejudgment interest of $158, 829. Defendant statutory underwriters agreed to pay, jointly and severally, disgorgement and prejudgment interest of ... Continue Reading
Action against Defendant, a real estate developer, in connection with an alleged scheme to raise money for construction of an airport by over-pledging collateral on secured promissory notes. According to the SEC, Defendant used approximately $5.98 million of $21.9 million of investor funds on personal expenses. The SEC further alleges that Defendant used collateral that was pledged to prior investors to recruit new ones. Parallel criminal charges have been filed.
Action against Respondents, a registered transfer agent and its former principal, for their alleged role in enabling public trading of shares of undisclosed “blank check” companies. According to the SEC, undisclosed control persons, who manufactured undisclosed blank check companies, hired Respondents to facilitate the sale of purportedly unrestricted shares of the blank check companies by reverse merger. The SEC alleges that despite red flags that the shares were illegal distributions, Respondents removed restrictive legends and ... Continue Reading
Action against Defendants, owners of a medical billing company, in connection with alleged misrepresentations related to a “go-private” sale of a publicly traded company. The SEC alleges that Defendants induced an investor to buy the company based on misrepresentations regarding historical and projected revenues. The SEC further alleges that Defendants created paper subsidiaries and reported income and revenue from these subsidiaries to increase the value of the company.
Actions against Respondents, a registered broker-dealer, its AML Officer, and a registered broker-dealer specializing in business clearing equity securities, for alleged reporting violations. The SEC alleges that Respondents Chardan and Basmagy neglected to file Suspicious Activity Reports (“SARs”) despite having reason to suspect that certain penny stock transactions that they executed were associated with fraudulent activity. The SEC alleges that Respondent ICBC cleared some of these suspicious trades and contacted Chardan regarding the suspicious activity, ... Continue Reading
Action against Defendant, an investment adviser, in connection with an alleged scheme to misappropriate investor funds. According to the SEC, Defendant used the money in various private funds as one pool of money, regularly moving money between funds to meet cash flow needs. The SEC further alleges that Defendant made misrepresentations to clients regarding fund performance, management fee arrangements, and use of investor funds and overpaid himself in violation of investor agreements. The court will ... Continue Reading
Action against Respondents, a registered broker-dealer and a former registered representatives, for allegedly engaging in distribution of unregistered securities. The SEC alleges that Respondent representative offered and sold approximately 6 million unregistered securities and that Respondent broker-dealer failed to reasonably supervise its registered representative and maintain business records. Respondent representative has agreed to a bar and to pay disgorgement of $67,089.03, prejudgment interest of $7,313.01, and a civil penalty of $20,000.
Action against Respondent, a former registered representative at a broker-dealer, for allegedly engaging in distribution of unregistered securities. According to the SEC, Respondent offered and sold approximately 8.2 million unregistered securities and ignored red flags indicating an unregistered distribution of securities. Respondent has agreed to a five year bar with a right to reapply. SEC Order
Action against Defendants, multiple individuals, in connection with a scheme to effect unregistered sales of and manipulate the market for shares of a nonpublic microcap company. According to the SEC, Defendants conducted private sales of unregistered securities and made them appear to be available for sale to the public. The SEC further alleges that Defendants used shell brokerage accounts to conduct illegal trades that moved the price of the securities upwards and created the impression ... Continue Reading
Action against Respondents, an attorney and his law firm, for allegedly making solicitations in connection with EB-5 immigrant visa investment securities without registering as required. Respondents have agreed to pay disgorgement of $275,000, prejudgment interest of $25,800, and a civil penalty of $37,500.
Action against Defendants, a company specializing in the management of event centers and its CEO, for allegedly making material misrepresentations to investors concerning Defendant company’s profitability. Defendant CEO has agreed to settle the SEC’s charges and to pay a civil penalty of $150,000.
Action against Defendants, an investment adviser, its CEO, a former partner, and a former trader for allegedly inflating the value of private funds the firm advised by secretly sending trades to a broker-dealer in return for inflated quotes on mortgage-backed securities. The SEC also alleges that Defendant used “imputed” mid-point valuations in a manner that inflated the value of securities and further exaggerated returns.
Action against Defendant for allegedly misappropriating investor funds in connection with a fraudulent IPO. According to the SEC, Defendant solicited individuals for a “pre-IPO” sale of securities in a privately owned company that was not planning an IPO and in which the Defendant did not own any interest. The SEC alleges that Defendant raised approximately $2.4 million through the scheme.
Action against Respondents, a municipal advisor and its principal, for allegedly misrepresenting Respondent principal’s experience and qualifications and failing to disclose conflicts of interest. The SEC alleges that Respondents failed to disclose that Respondent principal had no advisory experience and that he had recently been employed by the advisory client’s bond counsel. Respondents have agreed to pay, jointly and severally, disgorgement of $362,606.91 and prejudgment interest of $19,514.37. The corporate Respondent has agreed to pay ... Continue Reading
Action against Respondent, an investment adviser, in connection with an alleged mismarking scheme involving two of its portfolio managers. According to the SEC, the managers used sham broker quotes to inflate the value of securities held by a credit fund advised by Respondent, causing the credit fund to falsely report inflated returns, overstate its net asset value, misclassify certain distressed assets, and overpay performance and management fees. The SEC further alleges that Respondent issued statements ... Continue Reading
Action against Respondent, the Chief Financial Officer of a registered investment adviser, for alleged failure to reasonably supervise portfolio managers with respect to valuation of securities owned by a credit fund. The SEC alleges that Respondent failed to respond appropriately to red flags in the course of monitoring two employees who engaged in a mismarking scheme to inflate securities valuations, including with respect to the employees’ frequent use of price overrides. Respondent has agreed to ... Continue Reading
Action against Defendant, the friend of an investment banker, for allegedly trading while in possession of confidential information regarding the 2013 acquisition of a pork company by a China-based meat and food processing company. The SEC alleges that Defendant learned about the acquisition from the investment banker, who was working on the deal, and purchased shares of the target before selling them after the public announcement of the deal, realizing profits of $560,000. The SEC ... Continue Reading