Financial Enforcement Actions | Week of April 18 to April 24

Enforcement Report Apr 18 - Apr 24

Enforcement Report Apr 18 - Apr 24

UK-FCA

2 Enforcement Documents

£0.00 in Fines

Penalties: N/A
Respondent: Powerplay-UK Performance Vehicles Limited
Violation: PPVL has failed to comply with the regulatory requirement to submit the Return. PPVL has not been open and co-operative in all its dealings with the Authority, in that PPVL has failed to respond adequately to the Authority's repeated requests for it to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that it is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More

Penalties: N/A
Respondent: Sandstone Solihull Limited
Violation: SSL has failed to comply with the regulatory requirement to submit the Return. SSL has not been open and co-operative in all its dealings with the Authority, in that SSL has failed to respond adequately to the Authority's repeated requests for it to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that it is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More

FTC

4 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Mile High Madison Group, Inc., a Delaware corporation; Nordic Clinical, Inc., a Delaware corporation; Encore Plus Solutions, Inc., a Florida corporation; Le Groupe Mile High Madison, Inc., a Quebec corporation; Clinique Nordique, Inc., a Quebec corporation; Vittorio Dicriscio, individually and as an officer, director, or control person of Mile High Madison Group, Inc., Nordic Clinical, Inc., Encore Plus Solutions, Inc., Le Groupe Mile High Madison, Inc., and Clinique Nordique, Inc.; and Vito Proietti, individually and as an officer, director, or control person of Mile High Madison Group, Inc., Nordic Clinical, Inc., Encore Plus Solutions, Inc., Le Groupe Mile High Madison, Inc., and Clinique Nordique, Inc.,
Violation: They deceptively promoted their products to older Americans using false claims that their products could stop pain and
treat age-related ailments... Read More

Penalties: N/A
Respondent: Prog Leasing, LLC, a limited liability company, also d/b/a Progressive Leasing,
Violation: Consumers are suffering, have suffered, and will continue to suffer substantial injury as a result of Defendant’s violations of the FTC Act. In addition, Defendant has been unjustly enriched as a result of its unlawful acts or practices. Absent injunctive relief by this Court, Defendant is likely to continue to injure consumers, reap unjust enrichment, and harm the public interest... Read More

Penalties: N/A
Respondent: Fashion Nova, Inc.
Violation: The FTC brings this action under Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, and the FTC’s Trade Regulation Rule Concerning the Sale of Mail, Internet, or Telephone Order Merchandise (“MITOR” or the “Rule”), 16 C.F.R. Part 435, to obtain permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief for Defendants’ acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. §45 (a), and in violation of MITOR, 16 C.F.R. Part 435... Read More

Penalties: N/A
Respondent: Revenuewire, Inc
Violation: Consumers throughout the country have been injured by tech support scams in which fraudsters deceptively market services to “fix” purported problems on consumers’ computers. The FTC and state law enforcers have brought cases against the software sellers and call centers involved in these scams, including call centers operated by Vast Tech Support, LLC (“Vast”) and Inbound Call Experts, LLC (“ICE”). FTC v. Boost Software, Inc., No. 14-81397 (S.D. Fla. filed Nov. 10, 2014); FTC v. Inbound Call Experts, LLC, No. 14-81395 (S.D. Fla. filed Nov. 10, 2014). RevenueWire, Inc. and its Chief Executive Officer (collectively, “Defendants”) have played a key role in many of these scams, including the Vast and ICE scams. Using a business model named “Call Stream,” the Defendants have provided lead generation, business development, payment processing, and money distribution services to numerous tech support fraudsters, leading to hundreds of millions of dollars of consumer injury... Read More

FINRA

13 Enforcement Documents

$145,638.00 in Fines

Penalties: N/A
Respondent: Albert Harkless, III
Violation: In April 2010, while associated with the Firm, Respondent converted approximately $3,120 from a Firm customer by failing to purchase the securities for which the funds were provided to him and instead using it for personal use without the customer's knowledge or consent, in violation of FINRA Rules 2150 and 2010. In addition, Harkless made three misrepresentations relating to the securities to the customer, in violation of FINRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Brian Douglas Engstrom
Violation: Between July 1, 2011 and December 31, 2015 (the "Relevant Period"), Engstrom engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts in customer accounts. Based on the foregoing, Engstrom violated NASD Rule 2310 (for conduct before July 9, 2012), FINRA Rule 2111 (for conduct on or after July 9, 2012), and FINRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Robert Francis Costello
Violation: In October 2018, Costello, a corporate bond trader responsible for a portfolio of Firm inventory positions, mismarked 22 corporate bond positions to improperly inflate the value of his portfolio by almost $1 million, thereby falsifying firm records in violation of FINRA Rule 2010. In so doing, Costello also violated FINRA Rules 4511 and 2010 by causing the Firm to maintain inaccurate books and records... Read More

Penalties: $5,000.00
Respondent: Jeffrey Hall Heely
Violation: Between January and May 2019, while registered through NMS Capital Advisors, Jeffrey Heely engaged in an undisclosed outside business activity in violation of FINRA Rules 3270 and 2010... Read More

Penalties: $5,000.00
Respondent: Owen Arthur May
Violation: Between June 2015 and December 2019 May failed to timely amend his Iniform Application for Securities Industry Registration or Transfer ("Form U4") to disclose eight tax liens, totaling approximately $400,000, in violation of Article V, Section 2(c) of FINRA's By-Laws and FINRA Rules 1122 and 2010... Read More

Penalties: N/A
Respondent: Yee Htwe
Violation: Htwe violated FINRA Rules 8210 and 2010 by failing to fully respond to a Rule 8210 request for documents and information and refusing to a appear for on-the-record testimony on the date requested or any date in the future... Read More

Penalties: $83,138.00
Respondent: David Weisberg
Violation: Respondent’s trading in Customer 1’s account was more than 169%, and the trading generated commissions of approximately $75,638 for Respondent while Customer 1 lost approximately $55,627. By virtue of those unsuitable recommendations, Respondent violated FINRA Rules 2111 and 2010. Respondent used discretion to place twenty-one of Customer 1’s trades, even though neither Customer 1 nor Worden authorized Respondent to use discretion. Respondent also used discretion without written authorization to place seventeen trades for a second customer (Customer 2) in August 2018. By virtue of that unauthorized use of discretion, Respondent violated NASD Rule 2510(b) and FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Integrity Brokerage Services, Inc. Joshua Helmle, Marc N. Jaffe, Andrea Wood
Violation: As a result of this conduct, Jaffe violated Article III, Section 3(b) of FINRA’s ByLaws, NASD Rule 1031 (before October 1, 2018), and FINRA Rules 1210 (after September 30, 2018), and 2010; IBS and Helmle each violated Article III, Section 3(b) of FINRA’s By-Laws, NASD Rule 1031 (before October 1, 2018), and FINRA Rules 1210 (after September 30, 2018), 2010, and 8311; and Wood violated FINRA Rule 2010... Read More

Penalties: $20,000.00
Respondent: Paul David Weiss
Violation: Weiss engaged in two undisclosed outside business activities in violation of FINRA Rules 3270 and 2010 while registered through Mora WM from approximately April 2017 to May 2018 (the "Relevant Period"). In addition, in January 2018, in connection with one of his outside business activities, Weiss violated FINRA Rules 2210(d) and 2010 by sending a promotional email to a potential investor that failed to comply with FINRA's content standards for member communications with the public... Read More

Penalties: $5,000.00
Respondent: James Lee
Violation: During April and May 2019, Lee impersonated two customers on six telephone calls made to an insurance company affiliated with the Firm, in violation of FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Jonathan Scot Zwickel
Violation: Zwickel refused to provide on-the-record testimony requested by FINRA staff pursuant to FINRA Rule 8210. Through this conduct, Zwickel violated FINRA Rules 8210 and 2010... Read More

Penalties: $5,000.00
Respondent: Sandra Gose Stevens
Violation: From September 2008 to January 2018, as an accommodation to her customers, Stevens falsified documents, including IRA Distribution Forms, IRA Designation of Beneficiary Forms, and Variable Annuity Replacement or Insurance Change Forms, by copying, cutting, and then pasting customers' signatures on documents. Stevens also had customers sign documents required to open accounts or effect variable annuity or insurance transactions in blank, so that Stevens could complete them at a later time. As a result, Stevens violated FINRA Rule 2010... Read More

Penalties: $12,500.00
Respondent: Steven Todd Gary
Violation: From April 2010 through January 2018 (the "Relevant Period"), Gary violated FINRA Rule 2010 by forging the signature endorsements of his parents on approximately 60 checks totaling $332,650, which represented loans on their life insurance policies. In April 2018, Gary also violated FINRA Rule 2010 by providing three falsified and backdated power of attorney forms for his parents and wife to his insurance company employer during an investigation into Gary's forgery. In April and May 2018, Gary violated FINRA Rule 2010 by impersonating his father during three calls with the bank affiliated with his insurance company employer... Read More

CFTC

1 Enforcement Document

$1,750,000.00 in Fines

Penalties: $1,750,000.00
Respondent: Futuresfx and Simon Jousef
Violation: "Plaintiff Commodity Futures Trading Commission is an independent federal regulatory agency charged by Congress with the administration and enforcement of the Act, 7 U.S.C. §§ 1-26 (2018), and the Regulations promulgated thereunder, 17 C.F.R. §§ 1-190 (2019). During the Relevant Period, J ousef had the authority to direct payments and transfers for FuturesFX's bank accounts, including a bank account located in the United States. Jousef, acting as a CTA, through the use of the mails or other means or instrumentality of interstate commerce (including by telephone, email, and the FuturesFX and GTR websites or in any advertising), violated Section 4o(l)(A) and (B) of the Act, 7 U.S.C. § 6o(l)(A), (B) (2018), and Commission Regulation 4.4l(a)(l) and (2), 17 C.F.R. § 4.4l(a)(l), (2) (2019)"... Read More

SEC

26 Enforcement Documents

$6,120,586.00 in Fines

Penalties: N/A
Respondent: Axiom Corp., Smartchase Corp., and Veracity Management Global, Inc. n/k/a Santa Fe Resource Development, Inc.,
Violation: SCHS (CIK No. 1390533) is a Nevada corporation located in Ottawa, Ontario, Canada with a class of securities registered with the Commission under Exchange Act Section 12(g). As of July 22, 2019, the common stock of SCHS (symbol SCHS) was quoted on OTC Link (formerly Pink Sheets) operated by OTC Markets Inc., had seven market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3). SCHS has failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the period ended March 31, 2016... Read More

Penalties: N/A
Respondent: Steven L. Brickner,
Violation: "By engaging in this conduct, Brickner violated Section 17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77q(a), and Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Exchange Act Rule 10b-5, 17 C.F.R. § 240.10b-5. Unless enjoined, Brickner is reasonably likely to continue to violate the federal securities laws. Brickner violated, and unless enjoined, is reasonably likely to continue to violate, Section 17(a)(2) of the Securities Act, 15 U.S.C. § 77q(a)(2)... Read More

Penalties: N/A
Respondent: Barry R. Bekkedam
Violation: According to the SEC's complaint, filed on April 30, 2014, from April 2009 through October 2009, Bekkedam made material misrepresentations and omissions and failed to disclose conflicts of interest when soliciting his clients and others to invest in a fund that allegedly purchased lawsuit settlements from Rothstein. The complaint alleged, among other things, that Bekkedam misrepresented the level of due diligence that he had performed on the investment. Under the terms of the settlement, which is subject to court approval, Bekkedam has agreed to be permanently enjoined from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940... Read More

Penalties: N/A
Respondent: Brian A. Oliver
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Brian A. Oliver (“Oliver” or “Respondent”)... Read More

Penalties: $115,000.00
Respondent: Brian L. Ferdinand,
Violation: Ferdinand violated Section 13(d)(2) of the Exchange Act and Rule 13d-2(a) promulgated thereunder, which require that a Schedule 13D must be promptly amended when there are material changes or developments in the information previously reported. 37. As a result of the conduct described above, Ferdinand violated Section 16(a) of the Exchange Act and Rule 16a-3 promulgated thereunder, which require every person who is the beneficial owner of more than 10 percent of any class of any equity security registered pursuant to Section 12 of the Exchange Act, and any officer or director of the issuer of any such security, to file initial statements of holdings and to keep such information current by reporting subsequent transactions with the Commission within two business days... Read More

Penalties: $40,000.00
Respondent: Brian M. Storms
Violation: Storms was a cause of Liquid’s violations of Section 13(a) of the Exchange Act and Rules 13a-1, 13a-13, and 12b-20 promulgated thereunder, which require every issuer of a security registered pursuant to Section 12 of the Exchange Act to file with the Commission information, documents, and annual and quarterly reports as the Commission may require. These reports must be complete and accurate in all material respects... Read More

Penalties: N/A
Respondent: Elliot R. Berman, CPA
Violation: Berman willfully violated Section 10A(j) of the Securities Exchange Act of 1934, willfully aided and abetted and caused violations of Rule 2-02 of Regulation S-X, caused violations of Section 13(a) of the Exchange Act and Rule 13a-1 thereunder, and engaged in improper professional conduct. The Commission’s findings related to Berman’s putative appointment of an unqualified person as lead partner of an audit engagement while Berman continued to provide the services of a lead partner for the same engagement for more than five consecutive years... Read More

Penalties: $25,000.00
Respondent: Kenneth D. Shifrin, CPA
Violation: During the relevant period, however, Liquid’s customer base consisted almost entirely of customers that were referred to Liquid by QuantX and provided with trading capital by QuantX (the “QuantX Traders”). Liquid did not disclose in its periodic filings that virtually all of its customers were QuantX Traders. Shifrin, Liquid’s CFO, reviewed and signed the SEC filings described above. As a result of the conduct described herein, Shifrin was a cause of Liquid’s violations of the reporting provisions of Exchange Act Section 13(a) and Rules 13a-1, 13a-13, and 12b-20 promulgated thereunder... Read More

Penalties: $1,926,579.00
Respondent: Monomoy Capital Management, L.P.
Violation: From April 2012 through December 2016, Monomoy, a private equity fund adviser, charged the portfolio companies of a private fund it managed for the services of Monomoy’s in-house Operations Group without fully disclosing this practice and the related conflicts in Fund II’s operating documents or otherwise. In particular, when raising investments for its second private equity fund, Monomoy emphasized the value added and role played by its Operations Group in generating investment returns, but failed to provide full and fair disclosure that it would separately charge the fund’s portfolio companies for those services or that it would have associated conflicts of interests. As a result, Monomoy violated Section 206(2) of the Advisers Act... Read More

Penalties: N/A
Respondent: N. Scott Gillis, CPA
Violation: Gillis was a certified public accountant licensed to practice in the State of Georgia until his license lapsed at the end of 2017. Gillis was Chief Financial Officer and Chief Operating Officer of Aequitas Management, LLC (“Aequitas Management”), an Oregon limited liability company formed in 2007 with a principal place of business in Lake Oswego, Oregon. Aequitas Management is the parent company of a number of entities, including Aequitas Investment Management, LLC (“AIM”), an Oregon limited liability company formed in 2006 with a principal place of business in Lake Oswego, Oregon. AIM was the investment adviser to a number of Aequitas funds that raised monies from investors. From 2007 to 2016, AIM was registered as an investment adviser with the Commission. Gillis, age 66, resides in Lake Oswego, Oregon... Read More

Penalties: N/A
Respondent: Renew Spinal Care, Inc., Laserscopic Medical Clinic, LLC, Joe Samuel Bailey, Barry Edward Mitchell, Laurence Grossnickle, and Charles Clement Goubert, Jr.
Violation: Bailey started Renew at a single location in Florida to provide minimally invasive spinal surgery. According to the SEC's complaint, Bailey sought to expand Renew's business by raising money from investors in a series of offerings to establish Renew-branded clinics throughout the country. Mitchell, Grossnickle, and Goubert, directly and through a commissioned sales staff, offered and sold the securities to investors using information obtained from Bailey through intermediaries. The offering documents represented to investors that their funds would be used to establish and market one or more designated Renew clinics, and provided the right to receive "success marketing fees" for each procedure performed at those clinics. The offerings raised approximately $15 million for 29 clinics. Although the offering documents stated that no sales commissions would be paid, Mitchell, Grossnickle, and Goubert allegedly misused approximately $7.6 million of the investor funds to take cash distributions, pay proscribed sales commissions, and for other unauthorized purposes. The complaint further alleges that Bailey, through Renew and a second company he controlled, Laserscopic, allegedly misused nearly $5 million of investor funds for expenses unrelated to the offerings. Bailey also used some investors' funds to pay "success fees" to other investors, despite the fact that Renew never established a single investor-funded, Renew-branded clinic... Read More

Penalties: N/A
Respondent: Robert J. Jesenik
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Robert J. Jesenik (“Jesenik” or “Respondent”) pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”)... Read More

Penalties: N/A
Respondent: Great Basin Scientific, Inc.,
Violation: GBSNQ (CIK No. 1512138) is a delinquent Delaware corporation located in Salt Lake City, Utah with a class of securities registered with the Commission under Exchange Act Section 12(g). On March 5, 2018, GBSNQ filed a Chapter 7 petition in the United States Bankruptcy Court for the District of Utah, which was still pending as of January 9, 2020. As of January 3, 2020, the common stock of GBSNQ (Symbol GBSNQ) was quoted on OTC Link (formerly Pink Sheets) operated by OTC Markets, Inc., had seven market makers, and was eligible for the piggyback exception of Exchange Act Rule 15c2-11(f)(3). GBSNQ has failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the period ended March 31, 2017... Read More

Penalties: N/A
Respondent: Phillip Hudnall, Todd Esh, BirdDog Business Group, LLC and BirdDog Oil Equipment, LLC, Defendants and Duc "Doug" Nguyen, Brian Hudnall, DonDon, Kansas Oil Reserves, Kansas Oil Reserves 2, LLC and Phayrn Resources, Relief Defendants
Violation: The SEC's complaint alleges that from January through at least June 2019, Phil Hudnall, with Todd Esh's help, defrauded at least 12 investors in a securities offering they conducted through BirdDog Business Group, LLC and BirdDog Oil Equipment, LLC. According to the complaint, Hudnall and Esh sold promissory notes by telling investors that BirdDog entities would buy and refurbish used oil and gas equipment for later resale at a profit. The complaint states that Hudnall and Esh falsely represented that they had successfully completed prior profitable equipment transactions, and promised investors that they would receive a 30% return and that their principal would be secured by the equipment. The complaint alleges that in reality, the BirdDog entities had never completed any oiland-gas equipment transactions, let alone any profitable transactions. Hudnall allegedly misappropriated the majority of the investors' funds to purchase of land and mineral rights in Colorado, make Ponzi-type payments to investors in other offerings, and support his lavish lifestyle... Read More

Penalties: N/A
Respondent: Stephen Douglas Pizzuti
Violation: Pizzuti admitted that on October 23, 2015, he and his wife filed a joint Chapter 7 bankruptcy petition that failed to identify as an asset Pizzuti’s book of business from his time as a broker. On November 1, 2015, Pizzuti sold his book of business for $300,000 consisting of an immediate partial payment, with the balance due over time. On November 24, 2015, at a Section 341 creditor’s meeting, Pizzuti, under oath, falsely represented that he had not transferred or sold any assets beyond what was disclosed in the bankruptcy petition. Over the course of a year, Pizzuti received over $28,000 from the buyer of the book of business, which Pizzuti concealed by receiving the funds in cash or in the form of wire transfers to his wife and son... Read More

Penalties: N/A
Respondent: Aequitas Management, LLC, et al.
Violation: The defendants each consented to the entry of a final judgment imposing conduct-based injunctions prohibiting them from soliciting anyone to purchase or sell a security and prohibiting them from participating in the issuance, offer, or sale of any security of an entity they control. The final judgments also enjoin the defendants from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The Aequitas entities, Jesenik, and Gillis consented to the entry of final judgment without admitting or denying the SEC's allegations... Read More

Penalties: $125,000.00
Respondent: Biltmore International Corporation
Violation: Biltmore violated Rule 203(b)(1) of Regulation SHO promulgated under the Exchange Act. To facilitate the long sale of shares by its broker-dealer customers, Biltmore routinely executed a series of short sales throughout the day for its own account in the stocks being sold by such customers. Biltmore then later covered its short positions by purchasing shares from such customers on a “net” basis, charging such customers an average price at a prenegotiated markdown. For at least several thousand short sales executed by Biltmore in this manner during the relevant period, Biltmore did not locate shares of those stocks as required by Rule 203(b)(1) of Regulation SHO... Read More

Penalties: N/A
Respondent: Jeffrey G. Klein
Violation: In view of the foregoing, the Commission finds that Klein has been (1) convicted of a felony and (2) disbarred from the practice of law by the Florida Supreme Court, within the meaning of Rule 102(e)(2) of the Commission’s Rules of Practice. Accordingly, it is ORDERED, that Jeffrey G. Klein is forthwith suspended from appearing or practicing before the Commission pursuant to Rule 102(e)(2) of the Commission’s Rules of Practice... Read More

Penalties: $3,889,007.00
Respondent: RBC Capital Markets LLC
Violation: RBC willfully violated Sections 17(a)(2) and 17(a)(3) of the Securities Act, which prohibit any person, in the offer or sale of securities, from obtaining money or property by means of any untrue statement of material fact or any omission to state a material fact necessary in order to make statements made not misleading, and from engaging in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser, respectively. RBC also omitted to state to the Eligible Customers that the purchase of these more expensive shares would negatively impact the customers’ overall investment returns, in light of the different fee structures for the different fund share classes. As a result, Eligible Customers incurred up-front sales charges, CDSCs, and higher ongoing fees and expenses, and RBC received additional revenue... Read More

Penalties: N/A
Respondent: Dropil, Inc., Jeremy McAlpine, Zachary Matar, and Patrick O'Hara
Violation: Dropil and its founders misled investors about their use of investor funds and misappropriated investor monies by paying themselves undisclosed compensation out of the funds raised in the sale of DROPs. Of the nearly $1.9 million raised in the ICO phase, approximately $1.4 million was transferred to McAlpine’s, Matar’s, and O’Hara’s personal digital asset accounts. 8. Finally, McAlpine, Matar, and O’Hara attempted to cover up their fraud by producing falsified documents to the SEC staff, which were intended to give the appearance that (i) Dex had a record of trading activity which matched Dropil’s claims (it did not) and (ii) the number of investors in DROPs matched Dropil’s claims (it did not). By engaging in a fraudulent scheme through Dropil’s offer and sale of DROPs, McAlpine, Matar, and O’Hara and Dropil violated the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, as well as the securities offering registration provisions of Section 5 of the Securities Act... Read More

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