Archive

December 12, 2017

The Commodity Futures Trading Commission (CFTC) announced that Judge Ronnie Abrams of the U.S. District Court for the Southern District of New York entered a Consent Order against Defendants Kevin Michael Symons of Foothill Ranch, California, and his California company, FTS Financial, Inc. (FTS), and a Consent Order against Jerry Austin Simmons of Charlotte, North Carolina. The Orders find that the Defendants fraudulently promoted Simmons’ "Real Time Trade Room" (the Room), an online futures "trading" forum marketed by the Defendants as a way to observe Simmons as he purported to trade futures contracts “live” and that Simmons solicited clients to open managed futures trading accounts without being registered as required with the CFTC as an Associated Person (AP) of a Commodity Trading Advisor (CTA). CFTC

December 8, 2017

Louisiana-based Iberiabank Corporation, Iberiabank and Iberiabank Mortgage Company agreed to pay roughly $11.7 million to resolve allegations they violated the False Claims Act by falsely certifying they were complying with Federal requirements in order to obtain insurance on mortgage loans from the Federal Housing Administration.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Iberiabank employees Kelley R. Shackleford and Karen Mills.  They will receive a whistleblower award of roughly $2.2 million from the proceeds of the government's recovery.  DOJ

October 31, 2017

Investment advisory firm Millennium Management LLC has agreed to pay more than $630,000 to settle charges that it shorted U.S. stocks in companies planning follow-on offerings and then illegally bought shares in the follow-on offerings.    An SEC investigation found that Millennium violated an anti-manipulation provision of the federal securities laws known as Rule 105 on four occasions in 2012.  Rule 105 prohibits short selling an equity security during a restricted period (generally five business days before a covered public offering) and then purchasing that same security through the offering.  By illegally purchasing shares in the follow-on offerings, Millennium reaped $286,889 in illicit profits. SEC

October 30, 2017

The Securities and Exchange Commission today charged Joseph P. Willner with participating in a scheme to access the brokerage accounts of more than 100 unwitting victims and make unauthorized trades to artificially affect the stock prices of various companies. The SEC alleges that Willner generated at least $700,000 in illicit profits by trading in the same securities in his own accounts and taking advantage of the artificial stock prices that resulted from the unauthorized trades placed in the victims’ accounts. Willner’s activities were detected despite his efforts to disguise his real identity while communicating with at least one other individual through online direct messaging applications using a pseudonym, according to the SEC’s complaint.  “Legal trading too hard” is among the online messages noted in the SEC’s complaint.  To mask his payments to the other individual as part of a profit-sharing arrangement, Willner allegedly transferred proceeds of profitable trades to a digital currency company that converts U.S. dollars to Bitcoin and then transmitted the bitcoins as payment. SEC

October 25, 2017

The Securities and Exchange Commission today charged Mohammed Ali Rashid, a former senior partner at Apollo Management L.P., with defrauding his fund clients by secretly billing them for approximately $290,000 in personal expenditures, including his family vacations, visits to a hair salon, and purchases of designer clothing and high-end electronics. The SEC’s complaint alleges that Rashid falsely claimed that certain individuals accompanied him to dinners to make it appear various personal expenses had a business purpose, and he doctored a receipt in an effort to justify his purchase of a $3,500 suit for his father as a business expense. SEC

October 3, 2017

The Securities and Exchange Commission today charged Rockey “Roc” G. Hatfield, Steve E. Lovern, and NanoSave Technologies Inc  with defrauding investors in penny stock companies that claimed to have valuable patents.  One of those charged had been barred from the penny stock business based on his role in another securities scheme and neither he nor his companies had ever been issued any patents by the U.S. Patent and Trademark Office, the SEC alleged. Hatfield is a repeat offender whose prior securities schemes resulted in a criminal conviction, injunctions, a contempt of court finding, and broker-dealer, investment adviser, and penny-stock bars.  The SEC’s complaint alleges Hatfield controlled the two companies but concealed his role in them by having his wife and Lovern named as corporate officers and directors. According to the SEC’s complaint, the defendants hired unregistered brokers to cold call investors and pitch investments in “patent units,” using scripts written by Hatfield, including one that falsely claimed N1 Technologies had patented a cure for staph infections. SEC

September 29, 2017

The Securities and Exchange Commission today charged Maksim Zaslavskiy and his companies with defrauding investors in a pair of so-called initial coin offerings (ICOs) purportedly backed by investments in real estate and diamonds. The SEC alleges that Zaslavskiy and his companies have been selling unregistered securities, and the digital tokens or coins being peddled don't really exist. According to the SEC's complaint, investors in REcoin Group Foundation and DRC World (also known as Diamond Reserve Club) have been told they can expect sizeable returns from the companies' operations when neither has any real operations. Zaslavskiy allegedly touted REcoin as "The First Ever Cryptocurrency Backed by Real Estate."  Alleged misstatements to REcoin investors included that the company had a "team of lawyers, professionals, brokers, and accountants" that would invest REcoin's ICO proceeds into real estate when in fact none had been hired or even consulted. Zaslavskiy and REcoin allegedly misrepresented they had raised between $2 million and $4 million from investors when the actual amount is approximately $300,000. SEC

September 29, 2017

The Securities and Exchange Commission today charged Leonard Vincent Lombardo, The Leonard Vincent Group (TLVG), and Brian Hudlin  in an alleged real estate investment scheme utilizing high-pressure sales tactics to pilfer $6 million from retirees and other investors while using the proceeds to fund the broker’s lavish lifestyle and start e-cigarette businesses. The SEC alleges that Lombardo, who once worked at Stratton Oakmont and has long since been barred from the brokerage industry by the Financial Industry Regulatory Authority for multiple violations, operated the scheme from behind the scenes at his Long Island-based company TLVG with assistance from the CFO, Hudlin. According to the SEC’s complaint, more than 100 investors were defrauded with false claims that their money would be invested in distressed real estate, and some were told their investments had increased by more than 50 percent in a matter of months when in fact there were no actual earnings on their investments.  Lombardo allegedly invested only a small fraction of investor money in real estate and used the bulk of it for separate business ventures into the cigarette industry and personal expenses such as car payments on his BMW and Mercedes, marina fees on his boat, and visits to tanning salons. SEC

September 28, 2017

The Securities and Exchange Commission today charged three New York-based brokers with making unsuitable recommendations that resulted in substantial losses to customers and hefty commissions for the brokers.  One of the brokers agreed to pay more than $400,000 to settle the charges. Brokers must make recommendations that are compatible with their customers’ financial needs, investment objectives, and risk tolerances.  An SEC examination of the firm Alexander Capital L.P. detected potential misconduct among certain brokers, and the ensuing investigation has led to the filing of an SEC complaint against William C. Gennity and Rocco Roveccio.  The SEC also issued an order against Laurence M. Torres. The SEC’s complaint alleges that Gennity and Roveccio recommended investments that involved frequent buying and selling of securities without any reasonable basis to believe their customers would profit.  According to the complaint, since customers incur costs with every transaction, the price of the security must increase significantly during the brief period it is held in an account for even a minimal profit to be realized. SEC

September 22, 2017

The Securities and Exchange Commission today suspended trading in Grupo Resilient International  amid questions surrounding its statements about sending response teams and equipment to help with Hurricane Harvey disaster recovery efforts in Houston and surrounding areas. The SEC’s trading suspension order says that a recent press release issued by Texas-based Grupo Resilient claimed that the company added a “FEMA approved contractor” to the board of its subsidiary and was deploying workers and preparing to deploy a network of mobile broadband trailers to assist in relief efforts. The SEC’s order also says there are questions regarding the adequacy and accuracy of statements made by the company on other matters in prior press releases.  Grupo was previously known as Paradise Ridge Hydrocarbons and trades under the ticker symbol GRUI. SEC