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SEC Enforcement Actions

The Securities and Exchange Commission (SEC) is the United States agency with primary responsibility for enforcing federal securities laws. Whistleblowers with knowledge of violations of the federal securities laws can submit a claim to the SEC under the SEC Whistleblower Reward Program, and may be eligible to receive  monetary rewards and protection against retaliation by employers.

Below are summaries of recent SEC settlements or successful prosecutions. If you believe you have information about fraud which could give  rise to an SEC enforcement action and claim under the SEC Whistleblower Reward Program, please contact us to speak with one of our experienced whistleblower attorneys.

March 26, 2015

Chicago-based trading firm Global Fixed Income LLC, its owner Charles Perlitz Kempf and nearly two dozen companies and individuals who regularly bought and sold securities on behalf of Global agreed to pay nearly $5 million in disgorgement of profits and $1 million in penalties to settle SEC charges of failing to properly register with the SEC.  The settling companies included: Florida-based AGS Capital Group, Tennessee-based Banes Capital Management, Florida-based Big Star Capital, California-based Esso Ventures, New Jersey-based Etek Investment Management, New Jersey-based Finmark Resources, Kentucky-based Parker Paschal & Company, Florida-based PMK Capital Management, and Maryland-basedRLJ Fixed IncomeSEC

March 13, 2015

The SEC charged eight officers, directors, or major shareholders for failing to update their stock ownership disclosures to reflect material changes, including steps to take the companies private.  Each of the respondents, which included Berjaya Lottery Management (H.K.) Ltd., The Ciabattoni Living Trust; SMP Investments I, LLC and Shuipan Lin, the Chairman and CEO of China-based Exceed Company LtdSEC

March 4, 2015

The SEC charged Texas-based brokerage firm H.D. Vest Investment Securities with violating key customer protection rules after failing to adequately supervise registered representatives who misappropriated customer funds.  The company agreed to settle the charges by paying a financial penalty and retaining an independent compliance consultant to improve its supervisory controls.  SEC

March 2, 2015

The SEC announced it has suspended trading in 128 inactive penny stock companies to ensure they don’t become a source for pump-and-dump schemes.  The trading suspensions are the latest in a microcap fraud-fighting initiative known as Operation Shell-Expel in which the SEC Enforcement Division’s Office of Market Intelligence utilizes technology to scour the over-the-counter (OTC) marketplace and identify dormant companies ripe for abuse.  SEC

February 27, 2015

The SEC charged purported venture capital fund manager Gregory W. Gray Jr. and his firms Archipel Capital LLC and BIM Management LP with fraudulently using money from three investment funds to pay fictitious returns to investors in a different fund.  SEC

February 24, 2015

Goodyear Tire & Rubber Company agreed to pay more than $16M to settle charges it violated the Foreign Corrupt Practices Act (FCPA) when its subsidiaries paid bribes to land tire sales in Kenya and Angola.  SEC

February 19, 2015

The SEC announced insider trading charges against Scott Zeringue, alleging that while serving as vice president of construction operations at Baton Rouge-based The Shaw Group he traded company securities based on confidential information he learned on the job about an impending acquisition by Chicago Bridge & Iron Company.  SEC

February 19, 2015

New York City-based brokerage firm VCAP Securities and its CEO Brett Thomas Graham agreed to pay nearly $1.5M to settle charges they fraudulently deceived other market participants while conducting auctions to liquidate collateralized debt obligations.  SEC

February 18, 2015

The SEC announced fraud charges and an emergency asset freeze against two operators of a Colorado-based pyramid and Ponzi scheme that promises investors extraordinary returns of 700 percent through a purported “triple algorithm” and “3-D matrix.”  According to the government, Kristine L. Johnson and Troy A. Barnes raised more than $3.8M since April 2014 from investors they enticed into buying positions in their company Work With Troy Barnes Inc. (d/b/a “The Achieve Community”) when their company had no legitimate business operations and they were merely paying purported investment returns to earlier investors.  SEC

February 13, 2015

The SEC charged purported hedge fund manager Moazzam “Mark” Malik with stealing money from his investors.  Specifically, the SEC alleges Malik raised $840,774 from investors but never made real investments and withdrew the cash and spent it as his own.  His fund, which has changed its name several times, has been called Wall Street Creative Partners, then Seven Sages Capital LP, and then American Bridge Investment Group LLC, and most recently Wolf Hedge LLCSEC
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