Weekly Enforcement Action Tracker (Apr 15 – Apr 20)

Financial Enforcement Action Summary

CFPB

Penalties: $500,000,000.00
Respondent: Wells Fargo N.A.
Violation: Wells Fargo violated the Consumer Financial Protection Act (CFPA) in the way it administered a mandatory insurance program related to its auto loans. The Bureau also found that Wells Fargo violated the CFPA in how it charged certain borrowers for mortgage interest rate-lock extensions… Read More

FRS

Penalties: N/A
Respondent: Cease and Desist – Hua Nan Commercial Bank Limited and Hua Nan Commercial Bank Limited New York Agency
Violation: Significant deficiencies in the Agency’s risk management and compliance with applicable federal laws, rules, and regulations relating to anti-money laundering (“AML”) compliance, including the Bank Secrecy Act… Read More

SEC

17 Enforcement Documents

$815,930.33 in Fines

Penalties: TBD
Respondent: Lidingo Holdings, LLC, et al.
Violation: On April 10, 2018, the U.S. District Court for the Western District of Washington entered a final judgment against Vincent Cassano for his role in a fraudulent stock promotion scheme. According to the SEC’s complaint, Lidingo Holdings, LLC hired writers like Cassano to publish hundreds of bullish articles on its clients, which appeared to be independent research pieces but, in fact, were paid advertisements… Read More

Penalties: TBD
Respondent: Amrit J. S. Chahal
Violation: From at least February 2015, Amrit J. S. Chahal, of Fairfax, Va., used his company, Kane Capital Investment Group, LLC, to fraudulently solicit approximately $1.4 million from about 50 individuals, including friends and family members. According to the complaint, Chahal lured investors by falsely claiming to be an experienced and successful trader who could generate above-market returns for clients through a low-risk trading strategy… Read More

Penalties: N/A
Respondent: Jason A. Wallace
Violation: From September 2010 through January 2012, Wallace, directly and through JAW cold callers, fraudulently induced investors to buy shares by, among other things, making baseless predictions about per share price increases and not disclosing that each seller paid a commission of up to 40-50% to JAW, which Wallace distributed to the cold callers and himself in the form of commissions… Read More

Penalties: $32,024.33
Respondent: Douglas Nelson
Violation: Nelson’s relative became aware of material, non-public information that the deal was likely as a result of the relative’s role at Monster working with an executive involved in the negotiations. Nelson misappropriated this information from his relative and, on June 20, 2014, purchased 1,005 shares of Monster stock. His actions resulted in unrealized gains of $15,141.97… Read More

Penalties: N/A
Respondent: SEC Complaint – Amrit J. S. Chahal
Violation: From at least February 2015 through February 2018, Chahal fraudulently solicited approximately $1.4 million from about 50 individuals by falsely claiming to be an experienced and successful trader who could generate above-market returns for clients through a low-risk trading strategy. In reality, Chahal had substantially no experience working in the financial or securities industry or trading securities on behalf of clients… Read More

Penalties: $200,000.00
Respondent: Arlington Capital Management, Inc. and Joseph F. LoPresti
Violation: From at least 2012 to 2015, Arlington, a registered investment adviser, issued misleading advertisements about its investment performance in written communications to clients and prospective clients and in weekly radio broadcasts and video webcasts by Joseph F. LoPresti, Arlington’s President, 80 percent owner, and Chief Compliance Officer (“CCO”)… Read More

Penalties: N/A
Respondent: Scott Newsholme
Violation: Since 2013, Newsholme misappropriated more than $1 million from his investment clients to support his lifestyle and gambling habit. To conceal his scheme, Newsholme made various misrepresentations to his clients, including falsely reassuring them that their investments – including retirement accounts – were faring well… Read More

Penalties: TBD
Respondent: John Jumper and Alluvion Securities, LLC, American Investments Fund II, LLC, Speedee Brakes, LLC, Thousand Hills Capital, LLC, and Evertone Records, LLC
Violation: John S. Jumper stole millions of dollars from Snow Shoe Refractories, LLC’s pension plan. Jumper allegedly forged documents, including fake Board of Directors resolutions, to steal the funds. Jumper allegedly used the stolen funds to capitalize other businesses he owned, to repay personal debts and, in one instance, to invest in another business that paid a significant fee to a broker-dealer that Jumper co-owned… Read More

Penalties: N/A
Respondent: SEC Complaint – John Jumper and Alluvion Securities, LLC, American Investments Fund II, LLC, Speedee Brakes, LLC, Thousand Hills Capital, LLC, and Evertone Records, LLC
Violation: Between March 2015 and February 2016, Defendant John Sherman Jumper (“Jumper”) committed securities fraud by misappropriating approximately $5,700,000 from an employee pension plan. Jumper gained access to the pension funds by forging documents that purported to give him authority over the funds and their placement… Read More

Penalties: $561,406.00
Respondent: Gemini Fund Services, LLC
Violation: From February 2013 to December 2014, the NAV that Gemini gave to NASDAQ was inflated because Gemini included in the NAV fake assets that were purportedly worth over $15 million but were actually worth nothing. Although Gemini did not know that these assets were fake at the time it was calculating the NAV, Gemini did know that, for months at a time, the GL Fund’s custodian bank (a financial institution that holds customers’ securities for safekeeping) did not have adequate proof of the existence of many of these fake assets, and that there were therefore significant discrepancies between Gemini’s own records and those of the custodian bank… Read More

Penalties: N/A
Respondent: Jeremy A. Licht d/b/a JL Capital Management
Violation: By order dated June 30, 2017, the Commission issued the “Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that Establish Distribution Funds” (“Omnibus Order”),1 authorizing the Secretary to issue orders beginning June 2017 and for calendar year 2018 appointing, upon request by the Commission staff, Miller Kaplan Arase LLP… Read More

Penalties: $22,500.00
Respondent: Medifirst Solutions, Inc. and Bruce J. Schoengood
Violation: It is “unlawful for any person that is … barred from being associated with a registered public accounting firm […] willfully to become or remain associated with any issuer […] in an accountancy or a financial management capacity […] without the consent of the [PCAOB] or the Commission.” Section 105(c)(7)(B) also states that it is unlawful for any “issuer […] that knew, or in the exercise of reasonable care should have known, of such suspension or bar, to permit such an association, without the consent of the Board or the Commission.”… Read More

Penalties: TBD
Respondent: Sohrab (“Sam”) Sharma, et al.
Violation: a fraudulent scheme related to Centra’s 2017 ICO, in which the company issued “CTR Tokens” to investors… Read More

Penalties: N/A
Respondent: Steven M. Simmons
Violation: Conspiracy to commit securities fraud and wire fraud in violation of Title 18 United States Code, Section 371… Read More

Penalties: N/A
Respondent: Mark P. French
Violation: Willfully and knowingly devise and intend to devise a scheme and artifice to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations and promises, and for the purpose of executing and attempting to execute the scheme and artifice, did use and cause to be used interstate wire communications… Read More

FINRA

7 Enforcement Documents

$185,000.00 in Fines

Penalties: N/A
Respondent: Dallas York
Violation: Respondent Dallas York violated FINRA Rules 8210 and 2010 by failing to provide information and documents in response to two requests made by FINRA pursuant to FINRA Rule 8210… Read More

Penalties: $100,000.00
Respondent: Potamus Trading, LLC
Violation: The firm made inaccurate reports to the Order Audit Trail System (“OATS”) and the FINRA Trading Reporting Facility (“TRF”)… Read More

Penalties: $7,500.00
Respondent: John S. Galinsky
Violation: Drafted or forwarded a series of email communications that contained only positive claims regarding the business prospects of the company involved in the private offering. The information contained in these emails often originated with the founder of the company, who was selling his company stock through the private offering. In addition, before forwarding one such email to two investors, Galinsky removed references to a patent infringement lawsuit that had recently been filed against the company… Read More

Penalties: $20,000.00
Respondent: Arthur Robert Meunier a/k/a Arthur Robert Brietman a/k/a Arthur Robert Meunier-Brietmann
Violation: Engaging in outside business activities without providing prior written notice to Morgan Stanley, Breitman violated FINRA Rules 3270 and 2010… Read More

Penalties: N/A
Respondent: Dung Thanh Nguyen
Violation: In 2016, Nguyen became affiliated as minority general partner and received compensation for consulting work from an SEC-registered investment advisor, without obtaining prior written approval as was required by MSI. As a result of the foregoing, Nguyen violated FINRA Rules 3270 and 2010… Read More

Penalties: $7,500.00
Respondent: Walter Warren Parker
Violation: During the time period from in or around July 2, 2012, through March 4, 2013, Parker made investment recommendations to a customer that were not suitable given her age, risk tolerance, financial experience, and liquidity. As a result of such conduct, Parker violated NASD Conduct Rule 2310 (through July 8, 2012) and FINRA Rules 2111 (from July 9, 2012) and 2010… Read More

Penalties: $50,000.00
Respondent: Jumpstart Securities, LLC
Violation: During the time period from in or around July 2, 2012, through March 4, 2013, Parker made investment recommendations to a customer that was not suitable given her age, risk tolerance, financial experience, and liquidity. As a result of such conduct, Parker violated NASD Conduct Rule 2310 (through July 8, 2012) and FINRA Rules 2111 (from July 9, 2012) and 2010… Read More

OCC

Penalties: N/A
Respondent: Consent Order: Wells Fargo Bank, National Association
Violation: Identified deficiencies in the Bank’s enterprise-wide compliance risk management program that constituted reckless unsafe or unsound practices and resulted in violations of the unfair acts or practices provision of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1)… Read More

Penalties: $500,000,000.00
Respondent: Wells Fargo Bank, National Association
Violation: Identified deficiencies in the Bank’s enterprise-wide compliance risk management program that constituted reckless unsafe or unsound practices and resulted in violations of the unfair acts or practices provision of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1)… Read More

X