Misrepresentations

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  

November 6, 2014

The SEC charged the City of Allen Park, Michigan and two former city leaders, former mayor Gary Burtka and former city administrator Eric Waidelich, in connection with a municipal bond offering to support a movie studio project within the city.  An SEC investigation found that offering documents provided to investors during the Detroit suburb’s sale of $31 million in general obligation bonds contained false and misleading statements about the scope and viability of the movie studio project as well as Allen Park’s overall financial condition and its ability to service the bond debt.  SEC

November 3, 2014

The SEC charged Canadian citizens Bruce D. Strebinger and Brent Howard Chapman with conducting an international microcap fraud scheme by stockpiling shares in the coal mining company Americas Energy Company and funding a multi-million dollar promotional campaign to hype the stock while simultaneously dumping their shares and routing the proceeds through offshore accounts.  According to the SEC, as the scheme was attracting new investors and Americas Energy’s share price was significantly increasing, Strebinger and Chapman were secretly selling their shares through an intricate web of offshore corporations, foreign accounts, and financial institutions located in Canada, Nevis, Panama, Switzerland, and the Turks and Caicos Islands.  Strebinger and Chapman generated proceeds of more than $17M through their elaborate scheme.  SEC

October 31, 2014

The SEC announced securities fraud charges against New York businessman Gregory Rorke and his software company Navagate Inc. for making false statements to investors while raising more than $3M to fund operations.  According to the government, Rorke falsely told investors that he possessed millions of dollars in liquid assets to personally guarantee their purchase of promissory notes issued by Navagate Inc.  However, virtually all of the liquid assets and real estate he claimed as his own actually belonged solely to his wife who did not pledge any of her assets in connection with the securities offering and had no obligation to make good on Rorke’s personal guarantee.  Ultimately, Navagate defaulted on the notes and Rorke did not adhere to his promise to pay investors under his personal guarantee.  SEC

October 15, 2014

The SEC announced an enforcement action against former Wells Fargo Advisors compliance officer Judy K. Wolf for allegedly altering a document before it was provided to the SEC during an investigation and then lying about it.  The SEC previously charged Wells Fargo in the case, and the firm agreed to pay $5M settle the charges.  Prior to the enforcement action, Wells Fargo placed Wolf on administrative leave and ultimately terminated her employment.  SEC

September 29, 2014

The SEC charged former Vision Broadcast Network CEO Erick Laszlo Mathe and consultant Ashif Jiwa with defrauding investors in a purported startup television network and production company by providing false information about its revenues and future prospects, including that former basketball star Michael Jordan planned to invest in the company.  Specifically, the SEC alleges the two raised at least $5.7 million in startup capital from approximately 100 investors by  misrepresenting that Vision Broadcast owned low-power television stations as well as 70 broadcast licenses to operate additional low power television stations estimated to be worth $400 million once the television stations became operational.  Vision Broadcast meanwhile funneled hundreds of thousands of dollars in investor funds to companies controlled by Mathe or Jiwa in the form of purported professional and consulting services that were never provided.  SEC

September 26, 2014

The SEC charged Charles S. Wang, Qian Cathy Zhang and Francis Y. Yuen, operators of Hong Kong-based eAdGear Holdings Limited and California-based eAdGear, Inc., with running an international pyramid scheme that raised more than $129 million from investors worldwide, primarily in the U.S., China, and Taiwan.   According to the SEC, even though eAdGear claimed to be a successful Internet marketing company, nearly all of its revenue was generated by investors, not its products or services and eAdGear’s operators used money from new investors to pay earlier investors as well as to repay a personal loan and purchase million-dollar homes for themselves. SEC