Actions against Defendants, a pastor, a self-described financial planner, and an attorney, in connection with an alleged scheme to defraud investors by selling them interests in defunct, pre-Revolutionary Chinese bonds. According to the SEC, Defendants pastor and planner falsely stated that the bonds were worth millions of dollars to generate investment and then used investor funds for personal expenses. The SEC alleges that Defendant attorney aided and abetted the scheme by drafting participation agreements in ... Continue Reading
Actions against Respondents, a registered broker-dealer, its CEO, and two former AML compliance officers, for alleged failure to file required Suspicious Activity Reports (“SARs”). According to the SEC, Respondents failed to submit SARs related to potential market manipulation despite numerous red flags indicating potential money laundering activity that were brought directly to the attention of Respondents compliance officers and CEO. Respondent broker-dealer has agreed to pay a civil penalty of $750,000 and retain a compliance ... Continue Reading
Action against Respondents, an energy storage and power delivery products company, its former Senior Vice President of Sales & Marketing, its former CEO, and its former Corporate Controller, in connection with an alleged accounting fraud scheme that improperly recognized revenue from future quarters in violation of GAAP. According to the SEC, Respondent company issued false and misleading statements regarding its revenue, growth, and gross margins, and inflated its reported financial results. The SEC further alleges ... Continue Reading
Action against Respondent, a registered representative, in connection with an alleged pump-and-dump trading scheme. According to the SEC, the scheme involved manipulative trading using the stocks of several microcap issuers. The SEC alleges that Respondent bought these stocks for her customers’ accounts, received material benefits paid to her husband, and engaged in matched trading with another participant in the scheme. Respondent has agreed to pay a civil penalty of $50,000 and to an industry and ... Continue Reading
Action against Respondents, a broker-dealer and its founder and CEO, for alleged failure to properly compute and report net capital. According to the SEC, as a result of computation errors, Respondent broker-dealer operated with a net capital deficiency and violated net capital reporting and books and records provisions. The SEC alleges that Respondent CEO caused the violations by failing to properly compute and report Respondent broker-dealer’s net capital. Respondent broker-dealer has agreed to pay a ... Continue Reading
Action against Respondent, a broker-dealer and investment adviser, for alleged failure to reasonably supervise one of its registered representatives engaged in manipulative trading activity of penny stocks. According to the SEC, Respondent was aware of aspects of its representative’s activities and failed to take appropriate action.
Action against Respondent, a gold mining company, for alleged violations of the books and records and internal controls provisions of the FCPA. According to the SEC, Respondent paid vendors and consultants without reasonable assurance that the transactions were consistent with their stated purpose and were not improper payments to government officials. In addition, Respondent allegedly used petty cash to make certain of these payments, which it failed to accurately describe in its books and records. ... Continue Reading
Action against Defendants, a pharmaceutical company, its former CEO, and its former Controller, in connection with alleged financial reporting, books and records, and internal accounting controls violations by Defendant company. According to the SEC, Defendant company failed to maintain internal controls over financial reporting related to controls on the company’s gross-to-net reserve accounts and estimates and overstated net revenue and income from continuing operations before income taxes, both issues disclosed in Defendant company’s restatement of ... Continue Reading
Action against Defendants, an investment advisory entity, its founder and owner, its accounting manager, and the founder and owner’s brother and son, in connection with alleged misuse of investor funds. According to the SEC, Defendants falsely stated to investors that investments in their private real estate investment fund were secure and earned high returns, and misused portions of the fund for Defendant owner’s personal expenses and the fund’s operational expenses. The SEC alleges that the ... Continue Reading
Action against Respondent, a broker-dealer, for alleged violations of the Customer Protection Rule, hypothecation rules, and the financial reporting rule. According to the SEC, Respondent moved cash customers’ fully paid securities to its omnibus margin account maintained at another clearing firm to meet the in-house margin requirements of that clearing firm. The SEC further alleges that Respondent delivered fully paid securities of two cash customers to another clearing firm’s depository trust company in exchange for ... Continue Reading
Action against Defendant, the former CIO of Equifax’s U.S. business unit, for allegedly trading on material nonpublic information regarding a data breach that was disclosed in September 2017. The SEC alleges that, prior to Equifax’s public announcement of the breach, Defendant exercised his vested stock options and then immediately sold the shares, avoiding $117,000 in losses.
Action against Defendants, a medical device manufacturer, its founder and CEO, and its former President, for allegedly raising more than $700 million from investors on the basis of false or misleading claims. The SEC alleges that Defendants misrepresented the effectiveness of their key product, a portable blood analyzer, and made misrepresentations to potential investors regarding a contract with the Department of Defense. Defendant Holmes has agreed to pay a $500,000 penalty, to be barred from ... Continue Reading
Action against Respondent, a Canadian public accounting firm, for alleged improper professional conduct in the course of its audits of an issuer. The SEC alleges that Respondent stated that it performed its audits in accordance with PCAOB standards but used the work of another independent auditor, and thus failed to comply with PCAOB auditing standards. Respondent has agreed to pay a civil penalty of $50,000.
Emergency action against Defendants, a New Jersey company and its owner, in connection with an alleged Ponzi scheme. According to the SEC, Defendant owner raised funds from investors by misrepresenting his success as a trader, how he intended to use investors’ money, and his company’s returns, including by altering financial statements to make the funds appear profitable. The SEC further alleges that Defendant owner misused investor money for his own benefit and that when investors ... Continue Reading
Action against Respondent, a pre-IPO internet-based financial technology company, for allegedly failing to properly register employee equity grants and associated distributions. The SEC alleges that Respondent issued approximately $13.8 million in stock options to its employees without registering the offering. Respondent has agreed to pay a civil penalty of $160,000.
Action against Respondent, the principal of a purported investment fund, for alleged misrepresentations in connection with solicitations to potential investors. The SEC alleges that Respondent authorized inaccurate statements to potential investors on his website and blog regarding his investment management experience and his criminal history. Respondent has agreed to officer or director and penny stock bars and to pay a civil penalty of $50,000 and post-order interest.
Action against Respondent, an Israeli holding company, for allegedly tolerating violations of the books and records and internal accounting controls provisions of the FCPA. The SEC alleges that Respondent made payments to third-party consultants and sales agents for purported services related to a Romanian real estate development project and the sale of U.S. real estate assets without evidence that the consultants and sales agents provided the contracted-for services. The SEC further alleges that Respondent failed ... Continue Reading
Action against Respondent, a registered broker-dealer, for allegedly effecting an unregistered distribution of a China-based issuer’s shares. The SEC alleges that Respondent negligently facilitated a purported gift of shares to the issuer’s Chairman that was an unregistered distribution, despite red flags that the gift was an unregistered sale being made by or on behalf of an affiliate of the issuer. Accordingly, the SEC found that Respondent failed to make a reasonable inquiry and therefore the ... Continue Reading
Action against Respondents, two investment advisers, for alleged failure to disclose conflicts of interest. The SEC alleges that Respondents periodically recalled portfolio securities of mutual funds they advised in order to enable the record holders of the loans to take dividend-received deductions, resulting in an undisclosed conflict of interest. Respondents have agreed to pay, jointly and severally, disgorgement of $2,635,490.25, prejudgment interest of $511,978.89, and a civil penalty of $500,000.
Action against Respondents, an investment management company and its principal, for an alleged “cherry-picking” scheme. The SEC alleges that Respondents disproportionately allocated profitable trades from the corporate Respondent’s omnibus trading account to the individual Respondent’s personal accounts, while disproportionately allocating unprofitable or less profitable trades to client accounts. Respondents have agreed to pay, jointly and severally, disgorgement of $505,663 and prejudgment interest of $50,208.57.
Action against Respondents, three stock exchanges, for alleged failure to implement required and effective rules, failure to comply with exchange rules, and failure to comply with Regulation SCI. The SEC alleges that Respondents inaccurately identified stock prices as “automated” during a period of technical difficulties, erroneously implemented a trading halt, applied price collars during unusual market volatility without a rule to permit them, lacked required policies and procedures for backup and disaster recovery capabilities, and ... Continue Reading
Action against Defendant, an investor, as well as his spouse and associated entities, for promoting an Israeli medical marijuana research company without disclosing the true nature of his relationship to the firm. The SEC alleges that Defendant did not disclose to investors that he was compensated in shares of the firm for media and investor relations efforts, and that he ultimately sold his shares for almost $7 million, which he used to fund independent investments ... Continue Reading
Action against Defendant, an employee of UTi Worldwide, Inc. (“UTi”), a transportation and logistics company, for allegedly trading on material nonpublic information regarding his employer’s pending acquisition by DSV Air & Sea Holdings A/V. The SEC alleges that Defendant, who was responsible for helping to publish press releases, learned of the acquisition the day before it was announced, purchased 17,500 shares of UTi, and then sold them at a substantial profit following the announcement.
Action against Respondents, a financial advisory firm and its principal, for alleged failure to disclose conflicts of interest to clients. The SEC alleges that Respondent firm accepted referrals from a wealth management company that also acted as its trustee, without disclosing the relationship to clients. The corporate Respondent has agreed to pay a civil penalty of $40,000. The individual Respondent has agreed to pay a civil penalty of $20,000.