Archive

April 14, 2015

The SEC announced fraud charges and an asset freeze against central Texas-based Leroy Brown Jr. accused of telling false tales about his stockbroking experience to lure current and former US military personnel into investing with him.  According to the government, Brown through his firm LB Stocks and Trades Advice LLC falsely assured investors, including some stationed at nearby Fort Hood, that he had many years of experience in the securities markets when in fact he is not a licensed securities professional and his firm is not registered with the SEC, Financial Industry Regulatory Authority, or any state regulator, and they have no evident experience with investments.  SEC

April 9, 2015

Katsuichi Fusamae, a senior accounting officer at Molex Japan Co. Ltd., agreed to settle SEC charges he cost his company millions of dollars in trading losses and manipulated accounting records to avoid detection.  Specifically, the SEC alleged Fusamae engaged in unauthorized equity trading in the company’s brokerage accounts that resulted in losses of more than $110 million and then concealed the losses by taking out unauthorized and undisclosed company loans with Japanese banks and brokerage firms to replenish account balances.  Fusamae admitted wrongdoing and accepted a permanent bar from serving as an officer or director of a publicly traded company with possible monetary sanctions to come.  SEC

April 9, 2015

The SEC announced fraud charges and an asset freeze against the operators of a South Florida-based microcap scheme spearheaded by Dean A. Esposito, Joseph DeVito, and Frederick Birks, all hired by the CEO of eCareer Holdings, Inc. Joseph J. Azzata.  According to the SEC, more than $11 million were raised from more than 400 investors by telling them their money would be used as working capital to develop eCareer’s online job staffing business when in reality much of it was diverted to pay exorbitant fees to the brokers and sales agents.  SEC

April 7, 2015

The SEC charged Los Angeles-based Pacific West Capital Group Inc. and its owner Andrew B. Calhoun IV with fraud in the sale of “life settlement” investments.  The SEC’s complaint alleges since at least 2012, Pacific West and Calhoun defrauded investors by using proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier to make life settlement investments appear successful.  SEC  

April 7, 2015

The SEC announced fraud charges against former professional football player William D. Allen and his business partner Susan C. Daub and others, alleging they operated a Ponzi scheme that raised more than $31 million from investors who were promised profits from loans to professional athletes.  SEC

April 6, 2015

The SEC charged 12 companies and six individuals with defrauding investors in a scheme involving applications to the Federal Communications Commission (FCC) for cellular spectrum licenses.  According to the SEC’s complaint, David Alcorn and Kent Maerki orchestrated the offering fraud through their Arizona-based company Janus Spectrum LLC. and raised more than $12.4 million, much of which they and their co-conspirators kept for personal use.  Those alleged to be involved in the scheme include Daryl G. Bank and his companies Dominion Private Client Group LLC, Janus Spectrum Group LLC, Spectrum Management LLC, Spectrum 100 LLC, Spectrum 100 Management LLC, Prime Spectrum LLC and Prime Spectrum Management LLC; Bobby D. Jones and his company Premier Spectrum Group PMA; Terry W. Johnson and Raymon G. Chadwick Jr. and their companies Innovative Group PMA, Premier Group PMA and Prosperity Group PMA.  SECv

April 2, 2015

The SEC charged two longtime friends, Amit Kanodia and Iftikar Ahmed, with insider trading on news of a proposed acquisition of Cooper Tire and Rubber Company by Apollo Tyres Ltd.  The SEC also named Rakitfi Holdings LLC, a company owned by Ahmed, and Lincoln Charitable Foundation, a supposed charity operated by Kanodia, as relief defendants.  SEC

April 1, 2015

Timothy Scronce agreed to settle charges of defrauding Illinois-based telecommunications company PCTEL Inc. and its shareholders during and after its acquisition of his business TelWorx Communications LLC and his three related telecommunications companies.  According to the SEC, Scronce used false accounting entries to inflate TelWorx’s quarterly revenues and earnings in the months leading up to the purchase to inflate the price PCTEL paid for the companies.  He also allegedly falsified PCTEL’s books and records and circumvented the company’s internal controls by recording bogus transactions.  Scronce consented to the SEC’s order requiring him to return his allegedly ill-gotten gains with interest, pay a civil penalty, and be barred for 10 years from serving as a public company officer or director.  SEC

April 1, 2015

Houston-based global technology and engineering firm KBR Inc.agreed to pay a $130,000 penalty to settle SEC charges of violating whistleblower protection Rule 21F-17 under the Dodd-Frank Act which prohibits confidentiality agreements that discourage protected whistleblowing activity.  It is the SEC’s first enforcement action against a company for using improperly restrictive language in confidentiality agreements with the potential to stifle the whistleblowing process.  At issue was KBR’s requirement that witnesses in certain internal investigations sign confidentiality statements with language warning that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department.  As part of the settlement, KBR amended its confidentiality statement by adding language making clear that employees are free to report possible violations to the SEC and other federal agencies without KBR approval or fear of retaliation.  Whistleblower Insider

March 31, 2015

The SEC charged Andrew Miller, the former CEO of Silicon Valley-based technology firm Polycom Inc., with using nearly $200,000 in corporate funds for personal perks that were not disclosed to investors.  The SEC separately charged Polycom in an administrative order finding the company had inadequate internal controls and failed to report Miller’s perks to investors.  Polycom agreed to pay $750,000 to settle the SEC’s charges.  SEC