Archive

August 5, 2014

The SEC charged four promoters with ties to the Pacific Northwest with manipulating the securities of several microcap companies, including two marijuana-related companies GrowLife Inc. and Hemp Inc.  SEC

August 4, 2014

The SEC charged Houston-based oil-and-gas exploration and production company Houston American Energy Corp. and its CEO John F. Terwilliger with making fraudulent claims about the company’s oil reserves.  According to the SEC, Terwilliger and his company fraudulently claimed that a Colombian exploration concession in which Houston American only owned a fractional interest held between 1 billion and 4 billion barrels of oil reserves, and that the reserves were worth more than $100 per share to Houston American’s investors.  SEC

August 1, 2014

The SEC obtained a final judgment requiring Richmond, Va.-based financial services holding company AIC Inc., its subsidiary brokerage firm Community Bankers Securities LLC, and their CEO Nicholas D. Skaltsounis to pay nearly $70 million for conducting an offering fraud while selling AIC promissory notes and stock to numerous investors across multiple states, many of whom were elderly or unsophisticated brokerage customers.  SEC

July 31, 2014

Virginia-based broker Donna Jessee Tucker agreed to disgorge $730,000 in ill-gotten gains to settle charges of defrauding elderly customers, including some who are legally blind, by stealing their funds for her personal use and falsifying their account statements to cover up her fraud.  SEC

July 31, 2014

The SEC announced an award, under the whistleblower provisions of the Dodd-Frank Act, of more than $400,000 for a whistleblower who reported a fraud to the SEC after the company failed to address the issue internally.  SEC

July 31, 2014

LA-based broker Michael A. Horowitz agreed to pay more than $850,000 to settle charges he participated in a variable annuities scheme designed to profit from the imminent deaths of the terminally ill.  As part of his scheme, he deceived his own brokerage firm to obtain the approvals he needed to sell the annuities and generate hefty sales commissions.  He also falsified various broker-dealer forms used by firms to conduct investment suitability reviews, causing some insurance companies to unwittingly issue variable annuities they may not have sold otherwise.  SEC

July 30, 2014

The SEC charged CEO Marc Sherman and former CFO Edward L. Cummings of Florida-based computer equipment company QSGI Inc. with violating the Sarbanes-Oxley Act by misrepresenting to external auditors and the investing public the state of the company’s internal controls over financial reporting.  SEC

July 29, 2014

The SEC charged penny stock company MSGI Technology Solutions and its CEO J. Jeremy Barbera with defrauding investors by touting a joint venture to develop and manage solar energy farms across the country on land purportedly owned by an electricity provider operated by Christopher Plummer.  Barbera and Plummer co-authored press releases falsely portraying MSGI as a successful renewable energy company on the brink of profitable solar energy projects.  However, MSGI had no operations, customers, or revenue at the time, and Plummer’s company did not actually possess any of the assets or financing needed to develop the purported solar energy farms.  SEC

July 28, 2014

Peter A. Jensen, former chief operating officer at Harbinger Capital Partners, agreed to pay $200,000 to settle charges he assisted a scheme by the firm and its owner Philip A. Falcone to misappropriate millions of dollars from a hedge fund they managed to pay Falcone’s personal taxes.  Falcone and Harbinger consented to a settlement last year in which they agreed to pay more than $18M and admit wrongdoing.  SEC

July 25, 2014

Citigroup business unit LavaFlow, Inc., which operates an alternative trading system (ATS), agreed to pay $5M to settle charges of failing to protect the confidential trading data of its subscribers.  The payment includes a $2.85M penalty which is the SEC’s largest to date against an ATS.  SEC