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Page 27 of 78

June 25, 2018

Wells Fargo Advisors settled charges with the SEC related to improper sales of market-linked investments. Wells Fargo allegedly gained large fees by encouraging its customers to actively trade the market-linked investments when in reality those investments were intended to be held until maturity. This strategy served only to increase Wells Fargo’s fees and reduce the return investors received. As a result of the settlement, Wells Fargo agreed to return the $930,377 in ill-gotten gains, pay $178,064 in interest, and pay a $4 million penalty. SEC

Tagged in: Securities Fraud,

June 19, 2018

The SEC has filed charges to shut down a $102M Ponzi scheme that affected investors throughout the US. According to the complaint, the scheme defrauded over 600 investors though sales of securities that the issuers controlled. The complaint charges five individuals and three companies with wrongdoing; it was filed in federal court in New York. SEC

Tagged in: Ponzi Schemes, Securities Fraud,

June 15, 2018

Adam Hand, a California-based former stock broker, was sentenced to 30 months in prison relating to charges of conspiracy to commit securities fraud. Hand and his brother participated in a “pump and dump” scheme that involved manipulating the price of Crown Marketing, a penny stock. Due to the scheme, investors lost over $1.5M. USAO Massachusetts

Tagged in: Misrepresentations, Securities Fraud,

June 14, 2018

Philadelphia investment adviser Carl Frederic Sealy pleaded guilty to fraud charges in connection with a $1.6 million Ponzi scheme he operated. Sealy told investors their funds would be used to finance real estate deals, but the deals were non-existent. Instead, Sealy used his clients’ investments to fund lavish personal expenditures, including spa services, hotels, and restaurants.  USAO EDPA

Tagged in: Misrepresentations, Ponzi Schemes, Securities Fraud,

June 13, 2018

The founder and former CEO of Alliance Fiber Optic Products, Inc., Peter Chang, was sentenced to two years in prison following his guilty plea on charges of insider trading.  Chang used brokerage accounts in his brother’s and his wife’s name to purchase and sell company stock at times when he was in possession of material nonpublic information about the company.  ND Cal

Tagged in: Insider Trading, Securities Fraud,

May 24, 2018

Former registered broker Louis Petrossi was sentenced to 44 months imprisonment and ordered to pay $8 million in restitution and more than $335 million in forfeiture for his role in the fraudulent market manipulation of publicly-traded, NASDAQ-listed ForceField Energy, Inc.; the manipulation scheme involved (1) the undisclosed purchase and sale of ForceField stock through nominees, (2) orchestrated trades of ForceField stock to create the misleading appearance of genuine trading volume and interest, and (3) secret payments to stock promoters and broker dealers who promoted and sold the stock. USAO EDNY

Tagged in: Market Manipulation and Trading Violations, Securities Fraud,

May 21, 2018

Virginia investment adviser Roger Hudspeth was sentenced to 12.5 years in prison for selling to clients fraudulent, unregistered securities created, offered, and controlled by an associate previously banned by FINRA for prior fraudulent activities; Hudspeth’s clients lost more than $6 million in the scheme. USAO EDVA

Tagged in: Regulatory Violations, Securities Fraud,

May 15, 2018

Colorado attorney Diane Dalmy was sentenced to 3 years in prison and an additional 3 years of supervised release for conspiring with others to perpetrate a “pump and dump” securities fraud scheme in which she and her co-conspirators artificially drove up the price of certain stocks issued by connected shell companies by fraudulently inducing investors to purchase them, then selling their own large positions in the investments at a profit after prices rose. USAO DCT

Tagged in: Market Manipulation and Trading Violations, Misrepresentations, Securities Fraud,

May 15, 2018

Edward Durante was sentenced to 18 years in prison for perjuring himself during an SEC deposition and defrauding at least 100 investors, many of whom were retirees, out of over $15 million in a scheme he began while serving time in prison for a prior securities fraud conviction. USAO SDNY

Tagged in: Misrepresentations, Securities Fraud,

May 14, 2018

Repeat investment fraudster Richard Zieske was sentenced to eight years in prison for wire fraud, securities fraud, and aggravated identity theft for posing as an investment advisor and convincing his victims to allow him to manage their retirement funds. Zieske-who used his victims’ money to pay for a limited-edition Harley Davidson motorcycle, a luxury SUV, and liposuction-was ordered to pay nearly $85,000 in restitution. USAO WDWA

Tagged in: Misrepresentations, Securities Fraud,

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