Weekly Enforcement Action Tracker (Apr 29 - May 4)

Penalties: N/A
Respondent: Univeral Bioenergy, Inc.
Violation: UBRG failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1, 13a-11, and 13a-13 thereunder, while UBRG's common stock was registered with the Commission, in that: (i) UBRG has not filed an Annual Report on Form 10-K since October 15, 2013; (ii) UBRG has not filed periodic or quarterly reports on Form 10-Q for any fiscal period subsequent to its fiscal quarter ending March 31, 2014; and, (iii) UBRG has not 2 timely filed current reports on Form 8-K to disclose fully certain reportable events as required by Section 13(a) of the Exchange Act and Rule 13a-11... Read More

Penalties: $171,836.00
Respondent: Apex Fund Services (US), Inc.
Violation: The Commission found that Apex improperly classified these withdrawals as receivables without evidence that the Managers were able or willing to repay the withdrawals. The Commission further found that the improper classification of the withdrawals as assets resulted in the overstatement of the value of investor holdings in the Funds in monthly statements sent by Apex to investors... Read More

Penalties: $140,000.00
Respondent: Diane J. Harrison
Violation: Prepared false SEC filings, Harrison submitted false legal opinion letters, and Daniels and Bradaick-Zolla entered manipulative trades to artificially set the price of the stocks in the public market... Read More

Penalties: $22,556,858.46
Respondent: William T. Walters
Violation: Davis regularly shared inside information about Dean Foods with Walters in advance of market-moving events, using prepaid cell phones and other methods in an effort to avoid detection. The SEC further alleged that, while Walters made millions of dollars using the confidential information to engage in insider trading, he provided Davis with almost $1 million and other benefits to help Davis address his financial debts... Read More

Penalties: $294,014.00
Respondent: TelexFree, Inc.
Violation: A large pyramid scheme that mainly targeted Dominican and Brazilian immigrants in the U.S... Read More

Penalties: $8,370,000.00
Respondent: Orthofix International N.V.; Jeffrey Hammel, CPA; Brian McCollum; Kenneth Mack and Bryan McMillan
Violation: Improperly booked revenue in certain instances and made improper payments to doctors at government-owned hospitals in Brazil in order to increase sales... Read More

Penalties: N/A
Respondent: David Alcorn
Violation: From May 2012 through October 2014 Respondent engaged in securities fraud, acted as an unregistered broker or dealer, and offered and sold securities in unregistered transactions, in connection with a $12.5 million securities offering fraud orchestrated by Respondent and Maerki, through Janus Spectrum... Read More

Penalties: $1,267,413.00
Respondent: Christopher R. Esposito
Violation: Concealed Esposito and Lionshare's de facto control of Cannabiz and a large percentage of Cannabiz's securities in order to evade SEC Rule 144, which limits securities sales by certain company affiliates, such as control persons. Esposito allegedly did this by, among other things, installing co-defendant James Gondolfe as the sole officer and director of Cannabiz - even though Esposito and Lionshare secretly controlled the company - to make false statements in Cannabiz's public filings with the SEC and other documents... Read More

Penalties: $143,199,018.93
Respondent: Panasonic Corporation
Violation: This matter concerns violations of the anti-bribery, anti-fraud, books and records, and internal accounting controls provisions of the federal securities laws by Panasonic... Read More

Penalties: N/A
Respondent: Kevin Hamilton
Violation: Hamilton engaged in insider trading and sold securities through materially false and misleading statements... Read More

Penalties: TBD
Respondent: Lauramarie Colangelo
Violation: Colangelo aided and abetted some of Bahgat’s violations by posing as one of Bahgat’s clients in a telephone call with a customer service agent at a brokerage firm in order to enable Bahgat to obtain access to that client’s brokerage accounts... Read More

Penalties: TBD
Respondent: Douglas A. McClain, Jr.
Violation: Argyll Investments, which was controlled by McClain and another individual, operated a fraudulent stock-collateralized loan business. As part of this business, Argyll fraudulently induced at least nine affiliates of issuers to transfer ownership of millions of shares of publicly traded stock as collateral for purported loans, based on a false promise to return the shares to borrowers upon repayments of the loans. Unbeknownst to the borrowers, however, Argyll sold their pledged shares before or soon after funding the loans – and, in many cases, used the proceeds from the collateral sales to fund the loans. As a result of this scheme, Argyll received more than $8 million in unlawful gains... Read More

Penalties: $25,000.00
Respondent: Revolutionary Concepts, Inc., Solomon RC Ali, Earnest H. DeLong, Jr., Rainco Industries, Inc., and Nicole C. Singletary
Violation: Revolutionary Concepts, Inc. (REVO) and its CEO/director, Solomon RC Ali (also known as Richard M. Carter), violated antifraud and reporting provisions of the federal securities laws. According to the complaint, under Ali's direction, REVO entered into transactions that involved persons with close, but undisclosed, relationships to Ali, and then made false and misleading statements about the transactions in press releases and public filings with the SEC... Read More

Penalties: N/A
Respondent: SEC Complaint - Revolutionary Concepts, Inc., Solomon RC Ali, Earnest H. DeLong, Jr., Rainco Industries, Inc., and Nicole C. Singletary
Violation: Between 2012 and 2017, Defendant Revolutionary Concepts, Inc. (“REVO”), a company that owns several patents related to smart camera technology, and Defendant Solomon RC Ali (“Ali”), REVO’s Senior Vice President of Corporate Finance and Investor Relations, made a series of materially false and misleading statements in press releases and public filings as part of a scheme to defraud investors... Read More

Penalties: TBD
Respondent: Eddy U. Martin and Shane R. Spierdowis
Violation: Alleges that Eddy Marin of Davie, Florida, secretly gained control of the publicly traded shares of Valentine Beauty and then issued the stock to himself, stock promoter Shane Spierdowis, of Boca Raton, Florida, and others. Marin, who is a convicted felon, and Spierdowis orchestrated a marketing campaign touting Valentine's purported operations and Spierdowis paid other promoters to tout the company. Once the promotional campaign increased the liquidity of Valentine's stock, Marin and Spierdowis sold a significant portion of their shares, collectively reaping more than $250,000 in stock sale proceeds... Read More

Penalties: $5,724,767.00
Respondent: Small Business Capital Corp.; Mark Feathers; Investors Prime Fund, LLC; and SBC Portfolio Fund, LLC
Violation: More than 400 investors were attracted to the funds by promises that profits from mortgage investments would yield annual returns of 7.5 percent or more. In reality, Feathers operated a Ponzi-like scheme by paying returns to investors that came partly from fund profits and partly from other investors... Read More

Penalties: N/A
Respondent: SEC Complaint - Small Business Capital Corp.; Mark Feathers; Investors Prime Fund, LLC; and SBC Portfolio Fund, LLC
Violation: As of March 30, 2012, Feathers and SB Capital had raised net $42 million from over 400 investors through the offer and sale of membership interests in the Funds. In doing so, since at least 2009, defendants have violated the antifraud provisions of the federal securities laws by making material misrepresentations and omissions regarding the Funds’ investment activities... Read More

Penalties: TBD
Respondent: Arthur Lamar Adams and Madison Timber Properties, LLC
Violation: Arthur Lamar Adams lied to investors by telling them that their money would be used by his company, Madison Timber Properties, LLC, to secure harvest timber rights from various land owners located in Alabama, Florida, and Mississippi, and promised annual returns of 12-15%. But Madison Timber never obtained any harvesting rights. Instead, Adams allegedly forged deeds and cutting agreements as well as documents purportedly reflecting the value of the timber on the land. Adams also allegedly paid early investors with later investors' funds and convinced investors to roll over their investments... Read More

Penalties: N/A
Respondent: SEC Complaint - Arthur Lamar Adams and Madison Timber Properties, LLC
Violation: Arthur Lamar Adams ("Adams"), through his wholly-owned company, Madison Timber Properties, LLC ("MT Properties"), committed securities fraud by operating a Porui scheme. Adams and MT Properties have raised at least $85 million from over 150 investors in multiple states... Read More

Penalties: $27,655.71
Respondent: Adam Tracy and Securities Compliance Group, Ltd.
Violation: Their roles in a fraudulent scheme to conceal the identity of a company's principal control person, a convicted felon who had been previously incarcerated for securities fraud... Read More

Penalties: N/A
Respondent: SEC Complaint - Adam Tracy and Securities Compliance Group, Ltd.
Violation: From approximately April 2015 through October 2015, Defendants Adam Tracy ("Tracy") and his law firm, Securities Compliance Group, Ltd. ("Securities Compliance") (collectively, "the Defendants"), knowingly and/or severely recklessly prepared and filed materially false registration statements with the Commission on behalf of Sonant Communications Corp. ("Sonant")... Read More

Penalties: N/A
Respondent: Shawn Carter
Violation: The SEC is investigating potential violations of the federal securities laws related to the financial reporting of New York-based Iconix Brand Group, Inc., which paid Carter more than $200 million to acquire intangible assets associated with Carter's Rocawear apparel brand. After the acquisition, Carter and Iconix maintained publicly-disclosed partnerships related to the Rocawear brand... Read More

Penalties: N/A
Respondent: Ross, Sinclaire, & Associates, LLC and Murray Sinclaire, Jr.
Violation: The Respondents allowed Nicholas L. Fry II (“Fry”), president of registered investment adviser Fry Hensley and Company (“FHC”), to take advantage of his close relationship with RSA to carry out a fraudulent scheme whereby Fry charged his advisory clients inflated markups, markdowns, and commissions (“inflated transaction charges”) through RSA... Read More

Penalties: N/A
Respondent: Gary Yin
Violation: Beginning in 2011 and continuing through February 2013, Yin knowingly and willfully agreed with Jing Wang and his brother, Bing Wang, to conceal Jing Wang’s insider trading and control of the proceeds of insider trading by corruptly obstructing a Commission investigation of Qualcomm and its executives, including Jing Wang, and by knowingly conducting unlawful transactions with the proceeds of Jing Wang’s insider trading... Read More

Penalties: N/A
Respondent: Application for an Order to Show Cause - Shawn Carter
Violation: Since January 23, 2018, Respondent Shawn Carter has refused to comply with lawful Commission investigative subpoenas for him to appear in the investigation tided In the Matter of Iconix Brand Group, Inc. (Internal File No. HO-1274 (the "IconiY Investigation")... Read More

Penalties: N/A
Respondent: David T. Leboe, CPA
Violation: ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that David T. Leboe, CPA is hereby reinstated to appear and practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission... Read More

Penalties: N/A
Respondent: Kevin W. McAleer, CPA
Violation: ORDERED pursuant to Rule 102(e)(5)(i) of the Commission’s Rules of Practice that Kevin W. McAleer, CPA is hereby reinstated to appear and practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission... Read More

Penalties: N/A
Respondent: Gray Financial Group, Inc.
Violation: IT IS ORDERED that Miller Kaplan, pursuant to and in accordance with the Omnibus Order, is appointed the Tax Administrator for the QSF in the above-referenced proceeding... Read More

Penalties: $53,862.00
Respondent: Winter, Kloman, Moter, & Repp, S.C.
Violation: Engaged in improper professional conduct within the meaning of Section 4C of the Exchange Act and Rule 102(e)(1)(ii) of the Commission’s Rules of Practice by: WKMR and Disrud failing to design and implement an appropriate response to the risk of material misstatement and failing to obtain sufficient appropriate audit evidence; WKMR failing to ensure that the engagement team had adequate technical training and proficiency and failing to establish sufficient quality control standards; WKMR and Sehmer failing to conduct the necessary engagement quality reviews and receive concurring approvals; and WKMR, Disrud, and Sehmer failing to exercise due professional care... Read More

Penalties: N/A
Respondent: Shae Yatta Harper Esq.
Violation: Harper drafted participation agreements in pre-revolutionary Chinese bonds that were sent to investors and contained material misstatements and omissions. For example, investors were promised high returns on investment, which was false. Investors were also promised a money back guarantee, which in a number of cases was also false. Harper also controlled the bank account to which most investors sent their funds to invest in this investment opportunity, and distributed investor funds to the masterminds of the scheme at their direction. Harper also failed to respond appropriately to red flags indicating that the bonds had no value... Read More

Penalties: N/A
Respondent: Daniel H. Glick, CPA
Violation: From 2011 to 2016, in connection with the purchase or sale of securities, Glick misused and misappropriated investor funds, prepared and distributed false account statements that misrepresented the investments made and the amount invested, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors... Read More

Penalties: N/A
Respondent: SEC Complaint - David Zimliki and Russel P. Schiefer
Violation: David A. Zimliki learned from a close personal friend that potato chip manufacturer Golden Enterprises Inc. was going to merge with privately-held Utz Quality Foods, LLC. The SEC further alleges that before the merger was announced Zimliki bought shares of Golden Enterprises and tipped his friend, Russell P. Schiefer, who also bought shares. Shortly after the merger was announced, Zimliki and Schiefer each sold their Golden Enterprises shares, realizing profits of $9,319 and $5,877 respectively... Read More

Penalties: TBD
Respondent: David Zimliki and Russel P. Schiefer
Violation: David A. Zimliki learned from a close personal friend that potato chip manufacturer Golden Enterprises Inc. was going to merge with privately-held Utz Quality Foods, LLC. The SEC further alleges that before the merger was announced Zimliki bought shares of Golden Enterprises and tipped his friend, Russell P. Schiefer, who also bought shares. Shortly after the merger was announced, Zimliki and Schiefer each sold their Golden Enterprises shares, realizing profits of $9,319 and $5,877 respectively... Read More

Penalties: $886,214.37
Respondent: Paul W. Smith
Violation: Paul W. Smith raised approximately $2.35 million from approximately 30 investors by representing that he would invest their money in publicly traded securities through The Haverford Group. However, Smith made very few securities investments and instead largely used investors' money to repay other investors and for his own personal use. The same day that the SEC charged Smith, the U.S. Attorney's Office for the Eastern District of Pennsylvania announced criminal charges against Smith that arose from the same conduct alleged in the SEC's complaint... Read More

Penalties: N/A
Respondent: Order and Opinion - Longfin Corp.
Violation: Andy Altahawi, Suresh Tammineedi, and Dorababu Penumarthi sold unregistered securities in violation of Section 5 of the Securities Act of 1933 (“Securities Act”) between December 15, 2017, and March 28, 2018... Read More

Penalties: TBD
Respondent: Longfin Corp
Violation: Longfin's CEO and controlling shareholder, Meenavalli, caused the company to issue more than two million unregistered, restricted shares to Altahawi, who was the corporate secretary and a director of Longfin, and tens of thousands of restricted shares to two other affiliated individuals, Penumarthi and Tammineedi... Read More

Penalties: N/A
Respondent: Joseph A. Rubbo
Violation: Conspiracy to commit offenses against the United States, namely mail fraud, securities fraud, and money laundering... Read More

Penalties: $90,000.00
Respondent: Coastal Equities, Inc.
Violation: As a result of its reviews, Staff found that the firm violated FINRA Rules 2010 and 2121 and related supervision requirements... Read More

Penalties: N/A
Respondent: Vincent Santoro
Violation: Santoro has acknowledged that he received FINRA's request and that he will not appear for on-the-record testimony at any time. By refusing to appear for on-the-record testimony as requested pursuant to FINRA Rule 8210, Santoro violates FINRA Rules 8210 and 2010... Read More

Penalties: N/A
Respondent: Craig Eugene Walker
Violation: Walker signed another person's signature on an unauthorized application for a fixed annuity and on related forms, including instructions to liquidate that person's brokerage account to fund the annuity, in violation of FINRA Rule 2010... Read More

Penalties: $158,131.21
Respondent: Dennis A. Mehringer, Jr.
Violation: Breached his fiduciary duties to a charitable trust and gave his employer firm false information about his use of the charity's funds. He also settled a customer's complaint without notifying his firm and later falsely told the firm he had not received or settled any customer complaints... Read More

Penalties: N/A
Respondent: J. Gordan Cloutier Jr.
Violation: Failed to appear for testimony under oath on October 25, 2017, and January 31, 2018, as requested pursuant to FINRA Rule 8210 in violation of FINRA Rules 8210 and 2010... Read More

Penalties: $475,000.00
Respondent: Deutsche Bank Securities, Inc.
Violation: On several occasions, the firm failed to report transactions as trade-through exempt, and the firm failed to comply with SEC Rule 602 in more than 1,700 instances between January 2013 and December 2016 and had deficient procedures with respect to that rule... Read More

Penalties: $25,000.00
Respondent: Laidlaw & Company UK LTD
Violation: Laidlaw failed to establish and maintain a supervisory system and written supervisory procedures ("WSPs") reasonably designed to ensure that representatives' recommendations of leveraged and inverse exchange-traded funds ("Non-Traditional ETFs") complied with applicable securities laws and NASD and FINRA Rules. As a result, Laidlaw violated NASD Rule 3010 and FINRA Rules 3110 and 2010... Read More

Penalties: N/A
Respondent: Joseph Glenn Pratte
Violation: Pratte refused to provide information in response to FINRA staff request made pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010... Read More

Penalties: $7,500.00
Respondent: Nicholas John Hoetmer
Violation: Between July 2010 and April 2016, Respondent willfully failed to amend or timely amend his Uniform Application for Securities Industry Registration or Transfer ("Form U4") to report a Chapter 7 bankruptcy petition, a federal tax lien and a civil judgment, each of which occurred during 2010... Read More

Penalties: $20,000.00
Respondent: Lorraine A. Conaway, James O. Conaway
Violation: James and Lorraine Conaway failed to timely and completely disclose the scope of their real estate related outside business activities ("OBAs") to their FINRA-registered firm. They also provided their firm with inaccurate information about those OBAs in response to its investigation of them. As a result, they violated FINRA Rules 3270 and 2010... Read More

Penalties: N/A
Respondent: Sharemaster
Violation: Accordingly, the Commission orders FINRA to remit the $1,000 to Sharemaster... Read More

Penalties: TBD
Respondent: David A. Clark
Violation: Clark violated FINRA Rule 2210 in five different ways, including by a. making claims without providing a sound basis to evaluate the facts; b. omitting material information that caused a claim to be misleading; c. making statements that were false, exaggerated, unwarranted, promissory or misleading; d. failing to obtain approval from a registered principal prior to making the website and the social media page available to the public; e. failing to disclose the name of his member firm on the website and social media page prior to making them available to the public; and f. failing to disclose that testimonials regarding the website and social media page may not be representative or otherwise serve as guarantees for future performance... Read More

Penalties: $5,000.00
Respondent: Michael T. Swingle
Violation: Between August 2014 and October 2016, while registered with J.W. Cole, Swingle borrowed a total of $118,500 from five Firm customers, contrary to firm policy and in violation of FINRA Rules 3240 and 2010... Read More

Penalties: $145,000.00
Respondent: Youngwhi Kim, James D. Casey, John C. Fitzgerald and Gates Capital Corporation
Violation: Between April 2013 and May 2015, Respondent Gates Capital failed to make timely disclosure of its role as an underwriter in connection with certain municipal bond transactions. In one such transaction, Respondent Fitzgerald switched roles from financial advisor to underwriter, and both the firm and Fitzgerald’s immediate supervisor, Respondent Casey, failed to reasonably supervise Fitzgerald... Read More

Penalties: N/A
Respondent: Tu Ngoc Le, ("Le" or "Respondent")
Violation: From November 2016 to April 2017, while associated with Schwab, Le converted $6,404 from a Firm customer in violation of FINRA Rules 2150(a) and 2010... Read More

Penalties: $150,000.00
Respondent: Cambridge Investment Research
Violation: For more than two years, Cambridge did not supervise and record approximately one hundred of its customers' redemptions of variable annuities. Additionally, for three years, Cambridge failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to supervise representatives' sales of leveraged, inverse, and inverse-leveraged exchange-traded funds ("Non-Traditional ETFs")... Read More

Penalties: $10,000.00
Respondent: Joshua Thomas Crossman
Violation: In January 2017, Crossman violated FINRA Rule 2010 by intentionally making false statements to Merrill Lynch, in an expense report, in an attempt to obtain reimbursement of approximately $524 for expenses that he did not incur... Read More