Archive

July 5, 2016

The U.S. District Court for the Middle District of Florida ordered Dorian Garcia and his companies, DG Wealth Management, Macroquantum Capital LLC, UKUSA Currency Fund, and Quanttra LP, all of Naples, Florida, to pay nearly $17.5 million in restitution, disgorgement, and penalties for fraud, misappropriation, and operating a Ponzi scheme.  CFTC

June 28, 2016

The CFTC filed a lawsuit against Alvin Guy Wilkinson, of San Juan, Puerto Rico, and his limited partnerships Chicago Index Partners, L.P. and Wilkinson Financial Opportunity Fund, L.P., both located in Sharon, Connecticut, alleging they fraudulently solicited over $6.9 million from at least 30 investors and misappropriated at least $5.2 million of investors funds.  CFTC

June 20, 2016

The U.S. District Court for the Southern District of Florida ordered Harvard Assets LLC, London Assets Inc., and Harvard International Trading, Inc., all based in Florida, and their controlling person, Todd Owen Marshall, with a last known address in Deerfield Beach, Florida, to pay over $2.4 million in disgorgement and penalties for engaging in illegal, off-exchange precious metals transactions and registration violations.  CFTC

June 6, 2016

The CFPB took action against payment processer Intercept Corporation and two of its executives, Bryan Smith and Craig Dresser, for allegedly enabling unauthorized and other illegal withdrawals from consumer accounts by their clients.  The complaint alleges Intercept, Smith, and Dresser processed payments for clients without adequately investigating, monitoring, or responding to red flags that indicated some clients were breaking the law or deceiving customers.  CFPB

June 6, 2016

Michigan filed 33 felony charges against Scott Rookus, 45 of Jenison, for his role in running an alleged Ponzi scheme between 2010 and 2015. Between 2010 and 2013 Rookus allegedly solicited and obtained investments of approximately $1.5 million for his holdings company, New Haven Holdings. His customers many of whom were senior citizens, were allegedly told that earnings from their investments would come from the profits of Rookus’ enterprises, when in fact the money he took resulted in an alleged Ponzi-scheme from which he was the primary beneficiary. To cover his tracks, Rookus allegedly issued fraudulent returns to some investors using money from newer investors. He allegedly used the investor funds to pay personal expenses such as his children’s private school education and to pay of tax liens against him. The alleged scheme was uncovered after Rookus filed for personal bankruptcy in March 2015 and his investors found out that they had lost everything they invested. MI

June 3, 2016

The SEC charged Rhode Islanders Michael J. Maciocio and David P. Hobson with insider trading in the securities of deal targets being pursued by the pharmaceutical company where Maciocio worked.  The SEC alleges that Maciocio obtained confidential clinical and business data about pharmaceutical firms being considered by his company for potential acquisitions and business relationships, and that he used this nonpublic information to trade in their stocks.  Maciocio made approximately $116,000 in illegal profits based on this trading activity.  The SEC also alleges that Maciocio illegally tipped his childhood friend, Hobson, a stockbroker who utilized the nonpublic information to realize at least $187,000 in illicit trading profits for himself and $145,000 for his customers.  SEC

June 2, 2016

The SEC announced fraud charges and an asset freeze against Charles C. Liu, his wife Xin “Lisa” Wang, and their companies Pacific Proton Therapy Regional Center, Pacific Proton EB-5 Fund, and Beverly Proton Center LLC.  The SEC’s complaint alleges that Liu and Wang raised $27 million for a proton therapy cancer treatment center in Southern California from 50 investors in China through the EB-5 immigrant investor program.  They touted in promotional materials that the project would create more than 4,500 new jobs and have a substantial impact on the local economy while giving foreign investors an opportunity for future U.S. residency.  But presently there is no construction at the proposed site after more than 18 months of collecting investments.  Meanwhile, Liu has transferred $11 million in investor funds to three firms in China and diverted another $7 million to his and his wife’s personal accounts.  SEC

June 2, 2016

North Carolina-based investment adviser Richard W. Davis, Jr. has agreed to settle charges of defrauding investors by secretly steering portions of real estate-related investments into deals with companies he owned or operated.  The SEC further alleges that Davis made false and misleading statements to investors before and after they made their investments, failed to inform investors of their losses as his companies failed to pay the loans, and improperly received at least $1.5 million from bank accounts which commingled investor funds when he was only entitled to less than $150,000 in management fees.  Davis has agreed to a settlement subject to court approval with disgorgement plus interest and penalties to be determined by the court at a later date.  SEC

June 1, 2016

Wall Street-based brokerage firm Albert Friend & Company (AF&Co) will pay $300,000 to settle charges it failed to sufficiently evaluate or monitor customers’ trading for suspicious activity.  Specifically, an SEC investigation found that AF&CO failed to file Suspicious Activity Reports with bank regulators for more than five years despite red flags tied to its customers high-volume liquidations of low-priced securities.  SEC

June 1, 2016

Maryland-based private equity firm Blackstreet Capital Management and its owner, Marry N. Gunty, will pay $3.1 million to settle charges that they engaged in brokerage activity and charged fees without registering as a broker-dealer and committed other securities law violations.  Blackstreet and Gunty performed in-house brokerage services rather than using investment banks or broker-dealers to handle the acquisition and disposition of portfolio companies for a pair of private equity funds they advise.  Blackstreet fully disclosed that it would provide brokerage services in exchange for a few, but failed to comply with the registration requirements to operate as a broker-dealer.  An SEC investigation further found that Blackstreet and Gunty engaged in conflicted transactions and inadequately disclosed fees and expenses.  SEC