Blog Posts Tagged With SEC

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
Continue Reading

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
Continue Reading

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
Continue Reading

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.
Continue Reading

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
Continue Reading

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.
Continue Reading

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
Continue Reading

 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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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
Continue Reading

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.
Continue Reading

In re Voya Financial Advisors, Inc. (A.P. Sept. 26, 2018, Settled)

Action against Respondent, a dually registered broker-dealer and investment adviser, in connection with alleged failure to adopt adequate cybersecurity policies and procedures to protect customer information from compromise.  According to the SEC, Respondent provided access to a web portal that contained personal customer information to some of Respondent’s contractors. The SEC alleges that persons impersonating Respondent’s contractors then requested and received password resets for the contractor’s accounts from Respondent’s support line and used those passwords
Continue Reading

SEC v. William C. Skelley and Sohin S. Shah (S.D.N.Y. Sept. 26, 2018, Contested)

Action against Defendants, co-founders of a crowdfunding portal, for alleged misappropriation of investor funds.  According to the SEC, Defendants made fraudulent claims about their company’s plans to build an online crowdfunding portal in order to raise funds from investors.  The SEC alleges that Defendants instead used this money for personal use.  The SEC further alleges that one of the Defendants made materially false and misleading oral statements and, with the company, written statements to investors
Continue Reading

SEC v. James Thomas Bramlette, et al. (D. Utah Sept. 26, 2018, Partially Settled and Partially Contested)

Action against Defendants, four individuals and their associated entities, in connection with alleged fraud on investors.  According to the SEC, Defendants promised investors unrealistically high returns on investments on a resort that was, in reality,  uninhabitable and suffering losses.  The SEC alleges that Defendants had lost their ownership of the resort when they defaulted on loans, but continued to raise money from investors without disclosing the loss.  The SEC further alleges that one Defendant diverted
Continue Reading

In re SG Americas Securities, LLC, as successor entity to Newedge USA, LLC (A.P. Sept. 25, 2018, Settled)

Action against Respondent broker-dealer for alleged improper practices involving the pre-release of American Depository Receipts (ADRs).  According to the SEC, Respondent traders acted in violation of depositary agreements by obtaining and lending pre-released ADRs without first taking reasonable steps to determine whether the requisite number of ordinary shares was owned and custodied by the customer on whose behalf the ADRs were being obtained.  According to the SEC, Respondent failed to establish and implement effective policies
Continue Reading

SEC v. John Gregory Schmidt (S.D. Ohio Sept. 25, 2018, Contested)

Action against Defendant, a former registered representative, for allegedly operating a fraudulent scheme involving the misappropriation of client funds.  According to the SEC, Defendant transferred the proceeds from his sale of the securities of some customers to the accounts of other customers in order to disguise losses in their accounts.  The SEC alleges that Defendant did so without customer authorization and that he used falsified account statements and letters to authorize the transfers.

SEC Litigation
Continue Reading

In re Lichter, Yu and Associates, Inc., et al. (A.P. Sept. 25, 2018, Settled)

Action against Respondents, a PCAOB-registered accounting firm and its two co-owners, in connection with alleged misstatements made in Respondents’ audit of a corporation’s financial statements.  According to the SEC, after Respondent co-owners witnessed numerous red flags during the audit, Respondent firm’s audit report included misappropriated cash in its calculation of the corporation’s assets.  Respondent firm has agreed to pay disgorgement of $39,900, prejudgment interest of $3,788.49, and a civil penalty of $25,000.  Each Respondent co-owner
Continue Reading

In re Patricio Contesse González (A.P. Sept. 25, 2018, Settled)

Action against Respondent, a former CEO, in connection with alleged FCPA violations.  According to the SEC, Respondent directed improper payments through his company to foreign politicians, political candidates, and related individuals and entities by fabricating documents such as invoices and using fake documents submitted by illegitimate vendors to support the entries.  The SEC alleges that as CEO, Respondent caused internal accounting controls violations, such as incorrect entries and filings.  Respondent has agreed to pay a
Continue Reading

In re TD Ameritrade, Inc. (A.P. Sept. 24, 2018, Settled)

Action against Respondent broker-dealer for alleged failure to file Suspicious Activity Reports (SARs) in connection with transactions executed by independent investment advisers.  The SEC alleges that Defendant terminated its relationship with numerous advisers after determining that the advisers’ activities posted a risk to Respondent and clients.  The SEC further alleges, however, that Defendant failed to file SARs with respect to the suspicious transactions of these advisers and failed to refer the advisers and the transactions
Continue Reading

SEC v. Adam Rentzer (D.N.J. Sept. 24, 2018, Contested)

Action against Defendant stock trader for alleged payment of undisclosed kickbacks to a broker in order to receive greater shares of IPOs marketed by two brokerage firms.  According to the SEC, Defendant shared the profits with his broker after selling the stock.  The SEC alleges that this conduct was in contravention of the policies and procedures of both firms.  Defendant has pled guilty to parallel criminal charges.

SEC Litigation Release
Continue Reading

In re Ophrys, LLC (A.P. Sept. 21, 2018, Settled)

Action against Respondent, an investment adviser, for alleged violation of the Advisers Act in connection with conflicts of interest.  According to the SEC, Respondent was compensated on top of its advisory fee for participating in agency transactions but failed to disclose the conflict or seek consent from its private fund clients.  Respondent has agreed to pay a civil penalty of $500,000.

SEC Order
Continue Reading

LexBlog