Archive

July 12, 2018

Darren Goodrich, a former registered stock broker, was sentenced to two concurrent 41-month terms in prison for his role in two securities schemes.  In the first, along with his co-conspirators, Goodrich had controlled the trading of stock in Cubed, Inc., to manipulate the price and trading volume to their advantage.  In the second, Goodrich helped engineer several pump-and-dump schemes that generated almost $35 million in profits for the conspirators.  USAO EDNY

July 12, 2018

The CFTC issued an Order filing and settling charges against Lansing Trade Group, LLC (Lansing), a commodity merchandising firm with headquarters in Overland Park, Kansas, for the attempted manipulation of the price of certain wheat futures and options contracts that were traded on the Chicago Board of Trade (CBOT) and for aiding and abetting the attempted manipulation of the cash price for yellow corn from Columbus, Ohio (Columbus Corn). The CFTC Order requires Lansing to pay a $3.4 million civil monetary penalty, to undertake remedial measures to implement and strengthen its internal controls and procedures relating to compliance with the anti-manipulation provisions of the Commodity Exchange Act (CEA) and CFTC Regulations, and to cease and desist from further violations of the CEA and CFTC Regulations, as charged. CFTC

June 4, 2018

The CFTC issued an order against Société Générale S.A. settling charges of manipulation of Yen LIBOR, attempted manipulation and false reporting of Euribor and U.S. Dollar, Yen and Euro LIBORs, and aiding and abetting traders at another bank in their attempts to manipulate Euribor. The bank engaged in this misconduct to make money on its trading positions and to protect its reputation from speculation that it was having more difficulty borrowing unsecured funds than other banks. Société Générale will pay a civil monetary penalty of $475 million, cease and desist from further violations, and adhere to specific undertakings to ensure the integrity of its LIBOR, Euribor, and other benchmark interest rate submissions in the future. CFTC

June 18, 2018

The CFTC has ordered JPMorgan Chase to pay $65M as a penalty for attempted manipulation of the USD ISDAFIX benchmark swap rate. The CFTC found that between January 2012 and January 2017, the bank made false reports in an attempt to manipulate the USD International Swaps and Derivatives Association Fix (ISDAFIX), a benchmark in a range of interest rate products, to benefit its own positions. Banks are supposed to accurately report their relevant benchmark every day at 11AM. According to the CFTC, JPMorgan would make bids, offers, and execute transactions immediately before 11AM to manipulate what rate was reported. CFTC

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

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

January 18, 2018

UK-based financial services company HSBC Holdings plc agreed to pay a $63.1 million criminal penalty and $38.4 million in disgorgement and restitution, for a total payout of roughly $100 million, to resolve charges that it engaged in a scheme to defraud two bank clients through a multi-million dollar scheme commonly referred to as “front-running.” 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 11, 2017

The Securities and Exchange Commission today James M. Schneider and Andrew H. Wilson alleging they helped facilitate a microcap fraud scheme involving undisclosed “blank check” companies secretly bound for reverse mergers. In complaints filed in the U.S. District Court for the Southern District of Florida, the SEC alleges that Schneider of Hillsboro Beach, Florida, and Wilson of Nevada City, California, contributed to a fraud involving at least 22 undisclosed blank check companies. Such companies have no operations, making them attractive targets for those seeking reverse mergers for use in pump-and-dump schemes.  Despite claims of legitimate business plans, separate management, and independent shareholders, the 22 companies and their securities were secretly controlled by Steven Sanders, along with Daniel P. McKelvey or Alvin S. Mirman, and sold in reverse mergers.  The SEC previously filed an enforcement action against Sanders, McKelvey, and Mirman, who were separately convicted of related criminal charges and sentenced to prison. SEC

August 18, 2017

The Securities and Exchange Commission today announced that broker Banca IMI Securities Corp. (BISC), an indirect, wholly-owned U.S. subsidiary of Italian bank Intesa Sanpaolo SpA, has agreed to pay more than $35 million to settle charges that it violated federal securities laws when it requested the issuance of and received American Depositary Receipts (ADRs) without possessing the underlying foreign shares. The SEC’s order finds that BISC obtained pre-released ADRs and lent them to counterparties without satisfying the proper requirements.  BISC’s improper handling of ADRs, which lasted from at least January 2011 to August 2015, made it possible for such ADRs to be used for inappropriate short selling or inappropriate profiting around dividend record dates. SEC