Archive

November 25, 2014

The SEC charged HSBC’s Swiss-based private banking arm HSBC Private Bank (Suisse) with violating federal securities laws by failing to register with the SEC before providing cross-border brokerage and investment advisory services to U.S. clients.  The bank admitted wrongdoing and agreed to pay $12.5M to settle the SEC’s charges.  SEC

November 21, 2014

The SEC charged father-and-son executives Robert and Marc Benou at New Jersey-based penny stock company Conolog Corporation for issuing false and misleading press releases while secretly selling thousands of their own stock shares into the market.  They agreed to pay nearly $325,000 and accept officer-and-director bars to settle the SEC’s charges.  SEC

November 21, 2104

The SEC announced charged William E. Redmond Jr., former CEO and board member of engineering and chemical company GenTek Inc., with passing on insider trading to his close friend Stefano Signorastri.  GenTek’s nonpublic negotiations to find suitors for a company sale were among the topics that Redmond shared with Signorastri.  Redmond and Signorastri agreed to pay more than $324,000 to settle the SEC’s charges.  SEC

November 20, 2014

The SEC announced that Los Angeles-based broker-dealer Wedbush Securities agreed to settle a pending SEC case for market access violations by admitting wrongdoing, paying a $2.44M penalty.  The SEC’s order finds that Wedbush violated the market access rule by failing to have adequate risk controls in place before providing customers with access to the market, including some customer firms with thousands of essentially anonymous overseas traders.  SEC

November 20, 2014

The SEC suspended trading in four companies that claim to be developing products or services in response to the Ebola outbreak, citing a lack of publicly available information about the companies’ operations.  The SEC simultaneously issued an investor alert warning about the potential for fraud in microcap companies purportedly involved in Ebola prevention, testing, or treatment, noting that scam artists often exploit the latest crisis in the news cycle to lure investors into supposedly promising investment opportunities.  The companies whose trading was suspended were Bravo Enterprises Ltd., Immunotech Laboratories Inc.,Myriad Interactive Media Inc. and Wholehealth Products Inc.  SEC

November 17, 2014

The SEC charged three penny stock promoters Anthony Thompson, Jay Fung, and Eric Van Nguyen with conducting pump-and-dump schemes involving stocks they were touting in their supposedly independent newsletters for Blast Applications Inc., Smart Holdings Inc., Blue Gem Enterprise Inc., Lyric Jeans Inc.and Mass Hysteria Entertainment Company Inc.  According to the SEC, the defendants worked in coordinated fashion to gain control of a large portion of shares in the stock of these microcap companies and then hyped those stocks in newsletters they distributed to prospective investors.  After creating demand for the stock and increasing the value, they sold their holdings at the higher prices and earned significant profits.  Once they stopped their promotional efforts, the demand for the stocks subsided and the prices dropped, leaving investors who had purchased the promoters’ shares with significant losses.  The defendants allegedly conducted five separate schemes that resulted in more than $10M in ill-gotten gains.  SEC

November 17, 2014

The SEC charged Joseph A. Noel, CEO of San Francisco-based penny stock company YesDTC Holdings, with defrauding investors by issuing false and misleading press releases portraying his purported marketing and infomercial company as a successful venture in order to drive the stock price up while he covertly sold millions of shares into the public market for more than $300,000 in illicit profits. SEC

November 14, 2014

The SEC charged Wilfred T. Azar III, the owner of a Maryland-based real estate company Empire Corporation, with conducting an offering fraud and spending investor money on such personal expenses as his mortgage, country club dues, and season tickets to the Baltimore Ravens.  SEC

November 12, 2014

The SEC charged Pankaj Srivastava and Nataraj Kavuri, two India-based operators of an alleged high-yield investment scheme, with seeking to exploit investors through pervasive social media pitches on Facebook, YouTube, and Twitter.  According to the SEC, the two individuals offered “guaranteed” daily profits as they anonymously solicited investments for their purported investment management company called Profits Paradise, but the guaranteed returns were allegedly false and the investments being offered bore the hallmark of a fraudulent high-yield investment program.  SEC

November 6, 2014

The SEC charged California attorney Richard Weed behind a pump-and-dump scheme that defrauded investors in the Boston-based ticket brokering business CitySide Tickets, Inc.  According to the SEC, Weed created backdated promissory notes and authored false legal opinion letters that enabled Thomas Brazil and Coleman Flaherty to obtain millions of purportedly unrestricted shares of stock in the company.  Investors were then blitzed with a false and misleading promotional campaign touting CitySide Tickets as a budding national leader on the verge of acquiring smaller ticket firms across the country and positioning itself as an attractive takeover target for Ticketmaster.  As the company’s stock price increased on the false hype, Brazil and Flaherty sold their shares to unsuspecting investors for illicit proceeds of approximately $3M.  Shortly thereafter, the market for CitySide Tickets stock collapsed and the company eventually went out of business.  SEC