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Regulatory Violations

This archive displays posts tagged as relevant to violations of rules and regulations government the financial markets and its participants. You may also be interested in the following pages:

Page 37 of 44

September 16, 2014

The SEC announced d the latest sanctions in a continuing enforcement initiative uncovering certain hedge fund advisers and private equity firms that have illegally participated in an offering of a stock after short selling it during a restricted period.  The following firms and individual trader have agreed to settle the SEC’s charges and pay a combined total of more than $9 million in disgorgement, interest, and penalties: Advent Capital Management; Antipodean Advisors; BlackRock Institutional Trust Company; East Side Holdings II; Explorador Capital Management; Formula Growth; Great Point Partners; Indaba Capital Management; Ironman Capital Management; James C. Parsons; Midwood Capital Management; Nob Hill Capital Management; RA Capital Management; Rockwood Investment Management (also known as Rockwood Partners LP); Seawolf Capital; Solus Alternative Asset Management; SuttonBrook Capital Management; Troubh Partners; Vinci Partners Investimentos; Whitebox Advisors.  SEC

September 10, 2014

The SEC charged Massachusetts-based biotech company Advanced Cell Technology and its former CEO Gary H. Rabin with defrauding investors by failing to report his sales of company stock as federal securities laws require to give investors the opportunity to evaluate whether the purchases and sales by an insider could be indicative of the prospects of the company.  Rabin, who left the company earlier this year, agreed to settle the SEC’s charges by paying a $175,000 penalty.  ACT agreed to pay a $375,000 penalty.  SEC

September 10, 2014

The SEC announced charges against 28 officers, directors, or major shareholders for violating federal securities laws requiring them to promptly report information about their holdings and transactions in company stock.  Six publicly-traded companies were charged for contributing to filing failures by insiders or failing to report their insiders’ filing delinquencies.  A total of 33 of the 34 individuals and companies named in the SEC’s orders agreed to settle the charges and pay financial penalties totaling $2.6 million as follows:  Paul D. Arling, CEO and chairman of the board of directors of Universal Electronics Inc. (agreed to pay a $60,375 penalty); Paul C. Cronson, a director of eMagin Corporation (agreed to pay a $47,250 penalty); Bradley S. Forsyth, CFO and chief accounting officer of Willis Lease Finance Corporation (agreed to pay a $25,000 penalty); Stephen Gans, a director and beneficial owner of Digital Ally Inc. (agreed to pay a $100,000 penalty); Sidney C. Hooper, CFO and principal accounting officer of Sutron Corporation (agreed to pay a $34,125 penalty); Edgar W. Levin, a director of Dorman Products Inc. (agreed to pay a $46,300 penalty); Raul S. McQuivey, CEO, chairman of the board of directors, and a beneficial owner of Sutron Corporation (agreed to pay a $60,000 penalty); Donald A. Nunemaker, president of Willis Lease Finance Corporation (agreed to pay a $25,000 penalty); Thomas C. Nord, general counsel and senior vice president of Willis Lease Finance Corporation (agreed to pay a $78,500 penalty); Alan M. Schnaid, principal accounting officer and corporate controller of Starwood Hotels & Resorts Worldwide(agreed to pay a $25,000 penalty); Justin Tang, a director of ChinaCast Education Corporation (agreed to pay a $100,000 penalty); Charles F. Willis IV, CEO, chairman of the board of directors, and a beneficial owner of Willis Lease Finance Corporation(agreed to pay a $75,000 penalty); Stephen Adams, a beneficial owner of Solar Senior Capital Ltd. shares (agreed to pay a $100,000 penalty); Thomas J. Edelman, a beneficial owner of BioFuel Energy Corporation shares (agreed to pay a $64,125 penalty); Neil Gagnon, a beneficial owner of General Finance Corporation and NTS Inc. shares (agreed to pay a $75,000 penalty); Peter R. Kellogg, a beneficial owner ofMercer International Inc., TRC Companies Inc., Evans & Sutherland Computer Corp., and MFC Industrial Ltd. shares (agreed to pay a $100,000 penalty); Gregory M. Shepard, a beneficial owner of Donegal Group Inc.’s Class A common stock (agreed to pay an $80,000 penalty); Brown Brothers Harriman & Co. (agreed to pay a $120,000 penalty); Del Mar Asset Management LP (agreed to pay a $66,000 penalty);Lazarus Management Company LLC (agreed to pay a $60,000 penalty); P.A.W. Capital Partners LP (agreed to pay a $68,000 penalty); Ridgeback Capital Management LP (agreed to pay a $104,500 penalty); RIMA Senvest Management LLC (agreed to pay a $64,000 penalty); The Royal Bank of Scotland Group plc(agreed to pay a $120,000 penalty); Sankaty Advisors LLC (agreed to pay a $68,000 penalty); Security Capital Research & Management (agreed to pay an $88,000 penalty); Trinad Management LLC (agreed to pay a $95,000 penalty); Jones Lang LaSalle Incorporated (agreed to pay a $150,000 penalty); KMG Chemicals Inc.(agreed to pay a $150,000 penalty); Starwood Hotel & Resorts Worldwide Inc.(agreed to pay a $75,000 penalty); Tel-Instrument Electronics Corp. (agreed to pay a $75,000 penalty); Universal Electronics Inc. (agreed to pay a $75,000 penalty); and Willis Lease Finance Corporation (agreed to pay a $150,000 penalty).  SEC

September 9, 2014

The SEC charged Belize residents Robert Bandfield and Andrew Godfrey, who manage IPC Corporate Services, with helping clients evade U.S. securities laws by concealing their ownership of certain microcap stocks.  SEC

September 8, 2014

The SEC charged Minneapolis-based hedge fund manager Steven R. Markusen and his investment advisory firm Archer Advisors LLC with bilking investors in two hedge funds out of more than $1 million under the guise of research expenses and fees.  According to the SEC, Markusen routinely caused the funds to reimburse Archer for fake research expenses, and he eventually routed much of that money to his personal checking account and spent it on country club dues, boarding school tuition, and a Lexus among other luxury items.  SEC

September 3, 2014

The SEC charged Los Angeles-based immigration attorney Justin Moongyu Lee along with his wife Rebecca Taewon Lee and law firm partner Thomas Edward Kent with conducting an investment scheme to defraud foreign investors trying to come to the U.S. through the EB-5 Immigrant Investor Program.  According to the SEC, they raised nearly $11.5 million from two dozen investors seeking to participate in the EB-5 program, which provides immigrants an opportunity to apply for U.S. residency by investing in a domestic project to create jobs for U.S. workers.  The Lees and Kent informed investors that they would be EB-5 eligible if they invested in an ethanol production plant they would build and operate in Ulysses, Kansas.  However, investors’ money was misappropriated for other uses and the plant was never built and the promised jobs never created.  SEC

September 2, 2014

The SEC charged Houston-based investment advisory firm Robare Group Ltd. with recommending that clients invest in particular mutual funds without disclosing a key conflict of interest:  the firm was in turn receiving compensation from the broker offering the funds.  Therefore, unbeknownst to investors, Robare Group and its co-owners Mark L. Robare and Jack L. Jones Jr. had an incentive to recommend these funds to clients over other investment opportunities and generate additional revenue for the firm.  SEC

August 14, 2014

The SEC charged New York-based brokerage firm Linkbrokers Derivatives LLC with unlawfully taking secret profits of more than $18M from customers by adding hidden markups and markdowns to their trades.  According to the SEC, Linkbrokers defrauded customers by purporting to charge them very low commission fees, but in reality extracting fees that in some cases were more than 1,000 percent greater than represented.  The scheme was difficult for customers to detect because the brokers charged the markups and markdowns during times of market volatility in order to conceal the false prices they were reporting to customers.  Linkbrokers agreed to pay $14M to settle the SEC’s charges.  SEC

August 8, 2014

The SEC charged Bahamas-based brokerage firm Alliance Investment Management Limited (AIM) and its president Julian R. Brown with misrepresenting themselves as the “custodian” for assets under the management of hedge fund manager Nikolai Battoo when they did not have such custody.  They also allowed Battoo to create false account statements on AIM letterhead that vastly overstated the value of investors’ assets by more than $150 million.  Brown and AIM then routinely provided the false account statements to auditors and others acting on behalf of Battoo’s investors.  SEC

August 8, 2014

The SEC charged New York-based brokerage firm Crucible Capital Group and its founder Charles “Chuck” Moore for allegedly violating net capital requirements and falsifying books and records to conceal the capital deficiencies.  According to the SEC, they attempted to disguise the firm’s extensive net capital insufficiencies by improperly off-loading its liabilities onto the books of an affiliated firm and improperly treating non-marketable stock as an allowable asset.  Moore went so far as to try to hide Crucible’s true financial condition from SEC examiners by providing them doctored invoices that sought to mask the extent of those liabilities.  SEC
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