Archive

July 14, 2015

The SEC charged 15 individuals and 19 entities for their roles in alleged schemes to manipulate the trading of microcap stocks.  The defendants include two microcap issuers (Warrier Girl Corp. and Nature’s Peak, formerly Everock, Inc.), six firms alleged to have acted as unregistered broker-dealers for customers wishing to conceal their stock ownership and manipulate the microcap market, owners and employees at these six firms, customers, and stock promoters.  Defendant Moneyline Brokers is alleged to have unlawfully operated as a broker-dealer for U.S.-based customers who engaged in “pump and dump” schemes.  SEC

June 23, 2015

The SEC charged Gregg R. Mulholland, a microcap promoter, with illegally selling more than 83 million penny stock shares that he secretly obtained through at least 10 different offshore front companies.  Mulholland was previously charged by the SEC in 2011 for the fraudulent pump-and-dump manipulation of a sports drink company founded by Daniel “Rudy” Ruettiger, known for having inspired the motion picture “Rudy.”  In 2013, the SEC obtained a monetary judgment against Mulholland for more than $5.3 million. SEC

June 23, 2015

The SEC charged Ireeco LLC and Ireeco Limited with illegally brokering more than $79 million of investments by foreigners seeking U.S. residency through the EB-5 Immigrant Investor Program.  The companies are charged with acting as unregistered brokers for more than 150 EB-5 investors.  SEC

June 18, 2015

The SEC announced enforcement actions against 36 municipal underwriting firms for violations in municipal bond offerings.  The cases are the first brought against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents.  The SEC’s actions allege that between 2010 and 2014, the 36 firms violated federal securities laws by selling municipal bonds using offering documents that contained materially false statements or omissions about the bond issuers’ compliance with continuing disclosure obligations.  Under the terms of the MCDC initiative, each firm will pay civil penalties based on the number and size of fraudulent offerings identified, up to $500,000.  The firms and penalty amounts are as follows: The Baker Group, LP ($250,000), B.C. Ziegler and Company ($250,000), Benchmark Securities, LLC ($100,000), Bernardi Securities, Inc. ($100,000), BMO Capital Markets GKST Inc. ($250,000), BNY Mellon Capital Markets, LLC ($120,000), BOSC, Inc. ($250,000), Central States Capital Markets, LLC ($60,000), Citigroup Global Markets Inc. ($500,000), City Securities Corporation ($250,000), Davenport & Company LLC ($80,000),Dougherty & Co. LLC ($250,000), First National Capital Markets, Inc. ($100,000),George K. Baum & Company ($250,000), Goldman, Sachs & Co. ($500,000),Hutchinson, Shockey, Erley & Co. ($220,000), J.P. Morgan Securities LLC ($500,000), L.J. Hart and Company ($100,000), Loop Capital Markets, LLC ($60,000), Martin Nelson & Co., Inc. ($100,000), Merchant Capital, L.L.C. ($100,000), Merrill Lynch, Pierce, Fenner & Smith Incorporated ($500,000),Morgan Stanley & Co. LLC ($500,000), The Northern Trust Company ($60,000),Oppenheimer & Co. Inc. ($400,000), Piper Jaffray & Co. ($500,000), Raymond James & Associates, Inc. ($500,000), RBC Capital Markets, LLC ($500,000),Robert W. Baird & Co. Incorporated ($500,000), Siebert Brandford Shank & Co., LLC ($240,000), Smith Hayes Financial Services Corporation ($40,000), Stephens Inc. ($400,000), Sterne, Agee & Leach, Inc. ($80,000), Stifel, Nicolaus & Company, Inc. ($500,000), Wells Nelson & Associates, LLC ($100,000), William Blair & Co., L.L.C. ($80,000).  SEC

June 17, 2015

The SEC announced an enforcement action against Silicon Valley-based Sand Hill Exchange for illegally offering complex derivatives products to retail investors.  The violations were detected shortly after the offering process began, and with cooperation from the company the platform was shut down before any investor harm occurred.  Sand Hill and two associated individuals agreed to pay a $20,000 penalty to settle the SEC’s charges.  SEC

June 9, 2015

Andrew L. Evans, a trader residing in Canada, agreed to pay more than $1 million to settle charges that through his firm Maritime Asset Management he shorted US stocks in companies planning follow-on offerings and then illegally bought shares in the follow-on offerings to lock in significant profits with little to no market risk. SEC

June 1, 2015

Merrill Lynch agreed to admit wrongdoing and pay nearly $11 million to settle charges that two of its entities used inaccurate data in the course of executing short sale orders.  SEC

May 21, 2015

The SEC announced fraud charges against Atlanta-based investment advisory firm Gray Financial Group, its founder and president Laurence O. Gray, and its co-CEO Robert C. Hubbard IV, for allegedly selling unsuitable investments to pension funds for the city’s police and firefighters, transit workers, and other employees.  SEC

May 14, 2014

Nationwide Life Insurance Company agreed to pay an $8 million penalty to settle SEC charges it routinely violated pricing rules in its daily processing of purchase and redemption orders for variable insurance contracts and underlying mutual funds. SEC

May 11, 2015

The SEC charged a self-described retirement planning firm, Novers Financial and its principals Christopher A. Novinger and Brady J. Speers with falsely telling customers that interests in life settlements they offered and sold were “guaranteed,” “safe as CDs,” and “federally insured.” In addition to the charges against Novers Financial and the two principals, the SEC charged ICAN Investment Group LLC and Speers Financial Group LLC for acting as unregistered broker-dealers. SEC