Financial Enforcement Actions | Week of Aug 08 to Aug 14

Enforcement Report Aug 08 - 14 feat image

Enforcement Report Aug 08 - 14

FTC

2 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Tri Star Energy, LLC, a limited liability company, Hollingsworth Oil Company, Inc., a corporation, Docket No. C-4720 C & H Properties, a general partnership, and Ronald L. Hollingsworth, a natural person.
Violation: The Acquisition described in Paragraph 7, if consummated, would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. 17... Read More

CFTC

1 Enforcement Document

$706,214.67 in Fines

Penalties: $706,214.67
Respondent: Interactive Brokesrs LLC.
Violation: Interactive Brokers failed to: (1) adequately supervise its officers, employees, and agents in
violation of Regulation 166.3, 17 C.F.R. § 166.3 (2019); and (2) failed to file SARs when it had
a duty to do so in violation of Regulation 42.2, 17 C.F.R. § 42.2 (2019)... Read More

SEC

23 Enforcement Documents

$8,000,488.50 in Fines

Penalties: $50,000.00
Respondent: MILAN K. PATEL, Esq.
Violation: Patel is an attorney, whom the States of New York and New Jersey admitted to practice law in 1999 and 2004 respectively. Patel resigned his New Jersey license without prejudice... Read More

Penalties: N/A
Respondent: SCF Investment Advisors, Inc.
Violation: As a result of the conduct described above, SCF willfully violated Section 206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client.”... Read More

Penalties: N/A
Respondent: Sean R. Stewart et al.
Violation: The SEC alleged that Sean R. Stewart illegally tipped his father about future mergers and acquisitions involving clients of two investment banks for which Stewart worked... Read More

Penalties: N/A
Respondent: Dale Tenhulzen et al.
Violation: According to the SEC's complaint, between approximately April 2015 and September 2019, Tenhulzen was among EquiAlt's top revenue producers, selling approximately $15 million of its unregistered securities to more than 60 retail investors... Read More

Penalties: N/A
Respondent: Garrett Gaylor
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”) and Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Garrett Gaylor (“Gaylor” or “Respondent”)... Read More

Penalties: N/A
Respondent: Ross Barish
Violation: The SEC's complaint alleges that Barish engaged in a high-cost, in-and-out trading strategy in customer accounts without conducting reasonable due diligence to determine whether the trading strategy could deliver even a minimal profit for his customers... Read More

Penalties: $5,750,334.50
Respondent: KELVIN BOON, LLC AND RAJESH PAVITHRAN,
Violation: Respondents violated Section 5(a) of the Securities Act, which states that “unless a registration statement is in effect as to a security, it shall be unlawful for any person, directly or indirectly, (1) to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell such a security through the use or medium of any prospectus or otherwise... Read More

Penalties: N/A
Respondent: BRIAN DEE MATLOCK, CPA
Violation: Section 4C of the Exchange Act and CRP Rule 102(e)(1)(ii) provide, in part, that the Commission may censure or deny, temporarily or permanently, the privilege of appearing or practicing before the Commission to any person who is found by the Commission to have engaged in improper professional conduct... Read More

Penalties: N/A
Respondent: HypGen, Inc. and Lifestyle Medical Network, Inc.
Violation: LMNK (CIK No. 1307140) is a Nevada corporation located in Orlando, Florida with a class of securities registered with the Commission under Exchange Act Section 12(g). As of June 30, 2020, the common stock of LMNK (symbol LMNK) was quoted on OTC Link (formerly Pink Sheets) operated by OTC Markets Inc., had six market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3... Read More

Penalties: $17,500.00
Respondent: Ross Barish
Violation: By virtue of the conduct alleged herein, the Defendant, directly or indirectly, singly or in concert, violated and is otherwise liable for violations of Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]... Read More

Penalties: N/A
Respondent: Barbara Desiderio
Violation: From April 1, 2015 through June 4, 2015, Desiderio aided and abetted an unlawful, unauthorized trading scheme by Global’s owner and registered representatives that resulted in approximately 1,200 trades without authorization in approximately 360 customer accounts... Read More

Penalties: $2,182,654.00
Respondent: Mark P. Frissora
Violation: As Hertz's financial results fell short of its forecasts throughout 2013, Frissora pressured subordinates to "find money," principally by re-analyzing reserve accounts, causing Hertz's staff to make accounting changes that rendered the company's financial reports materially inaccurate... Read More

Penalties: N/A
Respondent: Brendan M. Ross
Violation: From early 2014 through late 2017, Ross manipulated payment data for the funds' investment in loans made by QuarterSpot, Inc., an online small business lender... Read More

Penalties: N/A
Respondent: Vu Anh Nguren, et al.
Violation: Nguyen was able to transfer $61,888 out of the accounts before the accounts were frozen by the brokerage firms,  reaping the benefits of profits earned due to trading, while leaving the brokerage firms to settle the trades at a significant loss... Read More

Penalties: N/A
Respondent: Hector Perez
Violation: the principal value of the transactions, including commissions, markup/markdown and fees (together “commissions”) totaled approximately $30,600,000; that the commissions charged to the accounts totaled over $700,000; and that Perez received $137,275 in commissions from his fraudulent conduct... Read More

FINRA

15 Enforcement Documents

$16,104,574.08 in Fines

Penalties: $5,000.00
Respondent: Shaun C. Simmons
Violation: On two separate occasions in September 2019, while he was associated with TIAA, Simmons forged the signatures of two TIAA customers on multiple forms related to an IRA rollover, in violation of FINRA Rules 2010 and 4511 and 2010... Read More

Penalties: $7,500.00
Respondent: Michael Edward Feeley
Violation: From March to May 2019, Feeley impersonated two insurance customers and his firm supervisor during 30 calls made to an insurance company (the "Carrier") to obtain information about existing insurance contracts, in violation of F1NRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Christopher Reid
Violation: From July to September 2018, Reid participated in private securities transactions in a third-party’s account held away from his firm. As a result, Reid violated FINRA Rules 3280 and 2010... Read More

Penalties: $15,000,000.00
Respondent: Interactive Brokers LLC
Violation: Respondent specifically and voluntarily waives any right to claim bias or prejudgment of the Chief Legal Officer, the NAC, or any member of the NAC, in connection with such person’s or body’s participation in discussions regarding the terms and conditions of this AWC, or other consideration of this AWC, including acceptance or rejection of this AWC. Respondent further specifically and voluntarily waives any right to claim that a person violated the ex parte prohibitions of FINRA Rule 9143 or the separation of functions prohibitions of FINRA Rule 9144, in connection with such person’s or body’s participation in discussions regarding the terms and conditions of this AWC, or other consideration of this AWC, including its acceptance or rejection... Read More

Penalties: $10,000.00
Respondent: Sylvester Knox
Violation: From June 2015 through October 2016, Knox violated FINRA Rule 2010 when he effected 36 transactions with a total principal value of approximately $1.7 million in three of his Firm customers’ accounts without the customers’ authorization or consent for the trades. During the same period, Knox also violated NASD Rule 2510(b) and FINRA Rule 2010 when he exercised discretionary trading authority and effected 36 transactions with a total principal value of approximately $2 million in the accounts of four of his Firm customers without having obtained prior written authorization from the customers or approval from Merrill Lynch to treat the accounts as discretionary... Read More

Penalties: $5,000.00
Respondent: Barry Hallman
Violation: Between June and October 2018 (the “Relevant Period”), Hallman deposited four checks, totaling $4,125, into his personal bank account knowing there were insufficient funds to cover the checks. Hallman nonetheless immediately made use of the funds, causing his account to become overdrawn when the checks subsequently were returned unpaid. As a result of the foregoing, Hallman violated FINRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Yvonne M. Nirelli
Violation: Between August 2017 and August 2018, Nirelli exercised discretion without written authorization in 64 customer accounts, in violation of NASD Rule 2510(b) and FINRA Rule 2010... Read More

Penalties: $949,574.08
Respondent: Morgan Stanley Smith Barney LLC
Violation: From January 2012 through December 2017 (the “Relevant Period”), Morgan Stanley failed to reasonably supervise a registered representative who recommended short-term trades of corporate bonds and preferred securities in the accounts of ten customers in violation of NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on or after December 1, 2014), and FINRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Luke C. Nelson
Violation: Between September and November 2018, Nelson signed a customer's signature and/or initials on four account-related documents without the customer's authorization. By reason of the foregoing, Nelson violated FINRA Rule 2010... Read More

Penalties: $2,500.00
Respondent: Michael Erwin
Violation: In March 2020, while registered through Edward Jones, Erwin settled a customer complaint without the knowledge or approval of the firm, in violation of FINRA Rule 2010... Read More

Penalties: $100,000.00
Respondent: BGC Financial, L.P.,
Violation: From November 2, 2015 through September 27, 2017, the firm violated FINRA Rule 6730 when it reported to FINRA’s Trade Reporting and Compliance Engine (“TRACE”) 506 transactions with an incorrect time of trade execution and reported 1,304 transactions to TRACE that it was not required to report. The firm violated Section 17 of the Securities Exchange Act of 1934 and SEC Rule 17a-3 thereunder (“SEC Rule 17a-3”) and FINRA Rules 4511(a) and 2010 when it recorded the incorrect time of trade execution on the memorandum of 77 brokerage orders. The firm also violated FINRA Rules 3110 and 2010 when it failed to establish and maintain a supervisory system, including written supervisory procedures (“WSPs”), that was reasonably designed to achieve compliance with TRACE reporting and record keeping requirements... Read More

Penalties: $5,000.00
Respondent: Andrew M. Arthur
Violation: During the period of October 2016 through September 2019, Arthur converted $275,000 given to him by a relative. Arthur obtained the funds by falsely representing that the $275,000 would be invested in private placements through an employee investment program offered by Arthur's then-member-firm employer. In fact, the "investment program" was fictitious and Arthur converted the $275,000 to pay personal expenses and to repay other individuals from whom Arthur had previously received money. By converting the $275,000 his relative provided him for investment and using the funds for his own purposes, Arthur violated FINRA Rule 2010. In addition, during the investigation that led to the September 2018 AWC, Arthur provided false written statements and testimony to Enforcement. Specifically, Arthur falsely represented in a written statement and falsely testified during his April 2018 on-the-record interview (OTR) that he did not forward a fictitious Firm e-mail he created to any thirdparty. Arthur also falsely represented in a written statement that the funds he received from the relative were a personal loan. By providing false and misleading information to FINRA, Arthur violated FINRA Rules 8210 and 2010... Read More

Penalties: $5,000.00
Respondent: Richard Denecker
Violation: On December 10thand I I th of 2018, Denecker placed a trade in each of his 32 firm customer accounts, without the knowledge, authorization, or consent from the customers. By effecting these unauthorized trades in his 32 firm customer accounts, Denecker violated FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Forouzan Pooladi
Violation: In July 2020, Pooladi refused to respond to an information request issued pursuant to FINRA Rule 8210, thereby violating FINRA Rules 8210 and 2010... Read More

Penalties: $5,000.00
Respondent: William Daly
Violation: On December 10thand 1 l'hof 2018, Daly placed a trade in each of his 48 firm customer accounts, without the knowledge, authorization, or consent from the customers. By effecting these unauthorized trades in his 48 firm customer accounts, Daly violated FINRA Rule 2010... Read More

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