Archive

July 13, 2015

The SEC announced a settlement with Frank Tamayo, a Brooklyn man who cooperated with the SEC’s investigation of an insider trading scheme.  Tamayo served as the intermediary between a law firm clerk and stockbroker.  The clerk would give Tamayo non-public information about the pending corporate transactions of his law firm’s clients and Tamayo would pass this on post-its or napkins to the stockbroker who would trade on this information for Tamayo, himself, and others.  The SEC previously brought charges against the clerk and the broker.  Under the terms of Tamayo’s settlement, he agreed to disgorge $1 million in ill-gotten gains, but this is deemed satisfied by orders of forfeiture or restitution from a parallel criminal case in which he pled guilty.  SEC

July 6, 2015

The SEC charged Bay Area oil and gas company, Luca International Group, and its CEO, Bingqing Yang, with running a $68 million Ponzi-like scheme and affinity fraud that targeted the Chinese-American community in California and investors in Asia, including some solicited as part of the EB-5 Immigrant Investor Program.  SEC

June 23, 2015

The SEC charged Gregg R. Mulholland, a microcap promoter, with illegally selling more than 83 million penny stock shares that he secretly obtained through at least 10 different offshore front companies.  Mulholland was previously charged by the SEC in 2011 for the fraudulent pump-and-dump manipulation of a sports drink company founded by Daniel “Rudy” Ruettiger, known for having inspired the motion picture “Rudy.”  In 2013, the SEC obtained a monetary judgment against Mulholland for more than $5.3 million. SEC

June 23, 2015

The SEC charged Ireeco LLC and Ireeco Limited with illegally brokering more than $79 million of investments by foreigners seeking U.S. residency through the EB-5 Immigrant Investor Program.  The companies are charged with acting as unregistered brokers for more than 150 EB-5 investors.  SEC

June 18, 2015

The SEC charged Norstra Energy, a Texas-based oil company, and its CEO, Glen Landry, with defrauding investors by making false and misleading claims about reserve estimates and drilling campaigns.  The SEC also charged Eric Dany, the author of a stock-picking newsletter, for his role in a fraudulent promotional campaign encouraging readers to buy Norstra’s penny stock shares.  SEC

June 18, 2015

The SEC announced enforcement actions against 36 municipal underwriting firms for violations in municipal bond offerings.  The cases are the first brought against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.  The SEC’s actions allege that between 2010 and 2014, the 36 firms violated federal securities laws by selling municipal bonds using offering documents that contained materially false statements or omissions about the bond issuers’ compliance with continuing disclosure obligations.  Under the terms of the MCDC initiative, each firm will pay civil penalties based on the number and size of fraudulent offerings identified, up to $500,000.  The firms and penalty amounts are as follows: The Baker Group, LP ($250,000), B.C. Ziegler and Company ($250,000), Benchmark Securities, LLC ($100,000), Bernardi Securities, Inc. ($100,000), BMO Capital Markets GKST Inc. ($250,000), BNY Mellon Capital Markets, LLC ($120,000), BOSC, Inc. ($250,000), Central States Capital Markets, LLC ($60,000), Citigroup Global Markets Inc. ($500,000), City Securities Corporation ($250,000), Davenport & Company LLC ($80,000),Dougherty & Co. LLC ($250,000), First National Capital Markets, Inc. ($100,000),George K. Baum & Company ($250,000), Goldman, Sachs & Co. ($500,000),Hutchinson, Shockey, Erley & Co. ($220,000), J.P. Morgan Securities LLC ($500,000), L.J. Hart and Company ($100,000), Loop Capital Markets, LLC ($60,000), Martin Nelson & Co., Inc. ($100,000), Merchant Capital, L.L.C. ($100,000), Merrill Lynch, Pierce, Fenner & Smith Incorporated ($500,000),Morgan Stanley & Co. LLC ($500,000), The Northern Trust Company ($60,000),Oppenheimer & Co. Inc. ($400,000), Piper Jaffray & Co. ($500,000), Raymond James & Associates, Inc. ($500,000), RBC Capital Markets, LLC ($500,000),Robert W. Baird & Co. Incorporated ($500,000), Siebert Brandford Shank & Co., LLC ($240,000), Smith Hayes Financial Services Corporation ($40,000), Stephens Inc. ($400,000), Sterne, Agee & Leach, Inc. ($80,000), Stifel, Nicolaus & Company, Inc. ($500,000), Wells Nelson & Associates, LLC ($100,000), William Blair & Co., L.L.C. ($80,000).  SEC

June 17, 2015

The SEC announced an enforcement action against Silicon Valley-based Sand Hill Exchange for illegally offering complex derivatives products to retail investors.  The violations were detected shortly after the offering process began, and with cooperation from the company the platform was shut down before any investor harm occurred.  Sand Hill and two associated individuals agreed to pay a $20,000 penalty to settle the SEC’s charges.  SEC

June 15, 2015

Swiss trader, Helmut Anscheringer, agreed to pay the SEC more than $2.8 million to settle charges that he purchased stock and call options in AuthenTec, Inc. upon learning from a longtime friend related to an AuthenTec executive that Apple proposed to buy the company.  Through his unlawful trading, Anschreinger garnered more than $1.8 million in illicit profits.  SEC

June 10, 2015

The SEC brought fraud charges against Nicholas Lattanzio claiming he posed as a hedge fund manager and defrauded small companies out of more than $4 million.  According to the SEC, Lattanzio falsely promised small businesses he would arrange project financing for them and generate substantial returns on money they invested in his Black Diamond Capital Appreciation Fund when instead he simply took investor money and spent it on himself and his family.  SEC

June 9, 2015

The SEC charged three men living in California with insider trading in the stock and options of a biotechnology company where one of them worked.  Specifically, the SEC alleges Michael J. Fefferman learned material nonpublic information as senior director of information technology at Ardea Biosciences Inc. and tipped off his brother-in-law in advance of major public announcements related to two pharmaceutical trials, a licensing agreement for a cancer drug, and eventually the acquisition of the company by AstraZeneca PLC.  SEC