Financial Enforcement Actions | Week of August 10 to August 16

Financial-Enforcement-Actions-Week-of-August-10-to-August-16

Financial-Enforcement-Actions-Week-of-August-10-to-August-16.

FTC

2 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: LeanSpa
Violation: LeanSpa defendants used phony online news articles and dishonest weight loss claims to sell LeanSpa products… Read More

UK-ICO

1 Enforcement Document

£0.00 in Fines

Penalties: N/A
Respondent: Hudson Bay Finance Limited
Violation: The Commissioner is of the view that the data controller has contravened the sixth data principle in that, contrary to sectlon 7, it has failed to inform the complainant, without undue delay, whether their personal data Is being processed by or on behalf of the data controller and, where this is the case, failed, without undue delay, to have communicated to them in an intelligible form such information as may constitute personal data… Read More

UK-FCA

4 Enforcement Documents

£0.00 in Fines

Penalties: N/A
Respondent: Andrew James Tinney
Violation: Mr Tinney breached Statement of Principle 1 for Approved Persons to the extent and for the reasons set out in its Decision. The Tribunal did not uphold the FCA’s decision to impose a partial prohibition and instead determined that this particular matter was to be remitted to the FCA. In light of the Tribunal’s Decision, the FCA has decided not to pursue a prohibition order against Mr Tinney. The FCA has, accordingly, issued this Final Notice… Read More

Penalties: N/A
Respondent: Nicholas Powell
Violation: Mr Powell is failing to satisfy the Effective Supervision Threshold Condition, in that Mr Powell has failed to respond to the Authority’s attempted communications and therefore is not capable of being effectively supervised by the Authority, having regard to all the circumstances… Read More

Penalties: N/A
Respondent: ODA Life Textile and Furniture Limited
Violation: OLTFL has failed to comply with the regulatory requirement to submit the Return. OLTFL has not been open and co-operative in all its dealings with the Authority, in that OLTFL 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: Samuel Baker
Violation: Mr Baker is failing to satisfy the Effective Supervision Threshold Condition, in that Mr Baker has failed to respond to the Authority’s attempted communications and therefore is not capable of being effectively supervised by the Authority, having regard to all the circumstances… Read More

NYSE

1 Enforcement Document

$8,000.00 in Fines

Penalties: $8,000.00
Respondent: Seven Points Capital, LLC
Violation: The conduct violated NYSE Arca Equities Rules 2.21(a) and (b) and 4.5. The Firm also failed to establish and maintain a system to supervise the activities of its associated persons with respect to qualification and registration requirements in violation of NYSE Arca Equities Rule 6.18… Read More

CFPB

6 Enforcement Documents

$85,000.00 in Fines

Penalties: $75,000.00
Respondent: Andrew Gamber, Voyager Financial Group, LLC, BAIC, Inc., and SoBell Corp.,
Violation: Defendant has failed to disclose any material asset or that any of his financial statements contain material misrepresentations or omissions, the Court shall terminate the suspension of the judgment for redress entered in Section II and, without further adjudication, reinstate the judgment entered in Section II of this Order, and the full judgment for redress of $2.7 million shall be immediately due and payable, less any amounts previously paid to Plaintiffs under Section II of this Order… Read More

Penalties: $10,000.00
Respondent: Andrew Gamber, Voyager Financial Group, LLC, BAIC, Inc., and SoBell Corp.,
Violation: Defendants violated the ADTPA by: a. Knowingly making a false representations as to the characteristics, uses, benefits, sources, and approval of these lump-sum payments, rather than correctly characterizing the transactions as loans that were void from inception because federal law prohibits agreements under which another person acquires the right to receive a veteran’s pension payments, under 38 U.S.C. § 5301(a)(3)(C)… Read More

Penalties: N/A
Respondent: ITT Educational Services, Inc.
Violation: ITT unfairly subjected consumers to undue influence or coerced them into taking out private student loans in violation of the CFPA… Read More

FINRA

14 Enforcement Documents

$978,881.98 in Fines

Penalties: $10,000.00
Respondent: David Rookasin
Violation: “In late 2014 and early 2015, while registered through UBS, Rookasin assisted with a customer’s variable annuity exchange away from his firm and received compensation in connection with this exchange from a person associated with another member firm. By this conduct, Rookasin violated FINRA Rules
2320(g)(1) and 2010… Read More

Penalties: $253,881.98
Respondent: Gregory T. Dean
Violation: Between December 2014 and December 2017 (the “Relevant Period”), while associated with Worden, Dean churned and excessively traded seven customers’ accounts. Dean’s trading in his customers’ accounts, which heavily utilized margin, caused significant account losses and high commissions and fees. As a result, Dean willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 and violated FINRA Rules 2020, 2111, and 2010… Read More

Penalties: N/A
Respondent: Michael Eric Johnson
Violation: Respondent refused to provide documents and information requested pursuant to FINRA Rule 8210. By virtue of this misconduct, Respondent has violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Michael Patrick Nixon
Violation: Between May 2017 and May 2018, Nixon exercised discretionary trading authority on behalf of his customers without prior written authorization from the customers and written approval from Paulson, in violation of NASD Rule 2510(b) and FINRA Rule 2010… Read More

Penalties: $625,000.00
Respondent: Lime Brokerage LLC
Violation: Lime failed to supervise to achieve compliance with applicable securities laws, rules and regulations prohibiting layering, spoofing and other manipulation, and failed to observe high standards of commercial honor and just and equitable principles of trade. In addition, Lime failed to establish, maintain, and enforce WSPs reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA Rules. The foregoing supervisory failures by Lime violated NASD Rules 3010(a) and (b) (for conduct prior to December 1, 2014), and FINRA Rules 3110(a) and (b) (for conduct on and after December 1, 2014) and 2010…. Read More

Penalties: $40,000.00
Respondent: Summit Brokerage Services, Inc
Violation: From September 2015 through March 2018, Summit failed to enforce its written supervisory procedures for review of correspondence. In particular, it failed to review its representatives’ incoming and outgoing hard copy (non-electronic) correspondence relating to their securities business. This conduct violated FINRA Rules 3110(b) and 2010… Read More

Penalties: $10,000.00
Respondent: Roger L Owens
Violation: Between November 2015 and October 2017 (the “Relevant Period”), Owens violated FINRA Rules 3280 and 2010 by engaging in private securities transactions without providing notice to, or obtaining approval from, Cetera… Read More

Penalties: $10,000.00
Respondent: Leonard J. Kuczynski
Violation: Between February 2013 and August 2017, Kuczynski engaged in three outside business activities for compensation without providing prior written notice to his employer member firm. This conduct violated FINRA Rules 3270 and 2010… Read More

Penalties: $5,000.00
Respondent: Stephen Allen Kelbick
Violation: From approximately June 2016 through November 2016 (the “Relevant Period”), Kelbick violated NASD Rule 2510(b) and FINRA Rule 2010 when he exercised discretionary trading authority and effected approximately 40 trades in the account of his Firm customer (“Customer A”) without having obtained prior written authorization from the customer or approval from Wells Fargo to treat the account as discretionary… Read More

Penalties: $20,000.00
Respondent: Seven Points Capital, LLC
Violation: Seven Points permitted 13 proprietary traders to engage in equity trading when these associated persons were not properly qualified and did not maintain the appropriate registrations with FINRA. As a result of the foregoing, Seven Points violated NASD Membership and Registration Rules 103I(a) and 1032(0, NASD Rule 3010(b) (for conduct before December 1, 2014), and FINRA Rules 3110(b) (for conduct on or after December 1, 2014) and 2010… Read More

SEC

54 Enforcement Documents

$12,252,389.49 in Fines

Penalties: $60,000.00
Respondent: Mark E. Burns
Violation: Burns has consented to the entry of a judgment permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and the tender offer provisions of Section 14(e) of the Exchange Act and Rule 14e-8 thereunder… Read More

Penalties: N/A
Respondent: China Tongzilian Group Share Limited, Inc.,
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter. Respondent failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: $75,000.00
Respondent: Antonio Bravata
Violation: Bravata prepared Primo’s offering materials, which he modeled on those provided to BBC Equities investors. The materials allegedly concealed Bravata’s role in Primo, and his criminal record, and falsely stated that another individual was in charge of Primo’s daily operations. The complaint also alleges that, on Primo’s website, Bravata falsely stated that Primo utilized a team of lawyers, accountants, real estate professionals, and analysts, when in fact no such team existed and Primo was limited to Bravata, his incarcerated father, and a former BBC Equities salesman Bravata enlisted to assist with the Primo scheme… Read More

Penalties: $672,858.00
Respondent: Antonio M. Bravata
Violation: Antonio Bravata prepared Primo’s offering materials – which he modeled on those provided to BBC Equities investors – that did not disclose Antonio Bravata’s role in Primo and falsely stated that another individual was in charge of Primo’s daily operations. Further attempting to portray Primo as a legitimate business, Antonio Bravata also made false statements on Primo’s website that Primo utilized a team of lawyers, accountants, real estate professionals, and analysts… Read More

Penalties: N/A
Respondent: Richard G. Duncan
Violation: Duncan violated his fiduciary duty as an investment adviser by ignoring, and failing to disclose, warnings from two banks that the Turkish investment opportunity was probably a scam. Duncan also made materially false and misleading statements to at least one client, promising as much as a 100% return on the Turkish investment… Read More

Penalties: $114,740.30
Respondent: MVP Manager LLC
Violation: MVP’s clients are private funds that it formed to invest in venture-backed companies that have not yet conducted an initial public offering (“pre-IPO companies”) that MVP projects have a potential for liquidity within two to five years by sale or public listing. In three instances, MVP personnel arranged to receive a brokerage commission from the counterparty that was selling pre-IPO company securities to MVP’s advisory client. The arrangement created a potential or actual conflict of interest for MVP in advising its client funds, which MVP failed to adequately disclose… Read More

Penalties: N/A
Respondent: Medisun Precision Medicine, Ltd., Next Graphite, Inc., and Omni Shrimp, Inc.,
Violation: “Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Robert William Myers, Jr.
Violation: Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent be, and hereby is barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization… Read More

Penalties: $250,000.00
Respondent: Canaccord Genuity LLC
Violation: Canaccord willfully violated Section 15(c)(2) of the Exchange Act and Rule 15c2-11 thereunder by publishing quotations for dozens of over-the-counter (“OTC”) and non-exchange-listed securities without a reasonable basis for believing that the issuer information was accurate in all material respects and was obtained from a reliable source. Canaccord has since revised and improved its policies and procedures with respect to Rule 15c2-11… Read More

Penalties: $46,085.00
Respondent: Harsh Nahata and Ajay S. Bhandari,
Violation: The SEC’s complaint, filed in federal district court in the Northern District of Georgia, charges Nahata and Bhandari with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks a permanent injunction, disgorgement of ill-gotten gains, prejudgment interest, and civil monetary penalties against each of them. The Commission has accepted Bhandari’s offer to consent to a final judgment, without either admitting or denying the allegations, enjoining him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder… Read More

Penalties: $3,650,000.00
Respondent: Alan G. Heide
Violation: Global promised investors profits from its short-term cash advances to businesses, the Company used substantial investor funds for other purposes, including paying operating expenses and funding Ruderman’s lavish lifestyle. The SEC alleges that Heide, a certified public accountant, for nine months, regularly signed investors’ monthly account statements that he knew overstated the value of their accounts and falsely represented that 1 Global had an independent auditor that had endorsed the company’s method of calculating investor returns… Read More

Penalties: $238,842.00
Respondent: Lorenz Erne
Violation: Erne purchased common stock of Spark Therapeutics, Inc. (“Spark”), a Philadelphia-based gene therapy company, ahead of a February 25, 2019 announcement that a Roche affiliate company and Spark had entered into a merger agreement. Erne traded while in possession of material, nonpublic information that he learned in the course of his employment at Hoffmann-La Roche. As a result of his trading ahead of the announcement, Erne obtained illicit profits of $159,228… Read More

Penalties: $160,000.00
Respondent: Hani Zeini
Violation: Zeini allegedly concealed this information from Sientra’s general counsel and the underwriters for the offering. The day after the offering closed, news of the suspension became public and Sientra’s stock price fell 52.6% from $20.58 to $9.70 per share after it issued a release disclosing the suspension. Even after that, Zeini allegedly lied to those asking about the matter, and tried to destroy records that showed when he knew about the CE certificate suspension… Read More

Penalties: $1,486,953.00
Respondent: Jehu Hand, et al.
Violation: Jehu Hand, who was charged, along with another defendant, for his role in a pump-and-dump scheme involving the stock of Greenway Technology in 2015. In that action, the SEC alleged that Hand carried out the pump-and-dump scheme by, among other things, writing and sending false legal opinion letters to brokerage and other firms transacting in Greenway stock. These opinion letters were designed to clear the way for Greenway stock held by the scheme participants to be sold, without restriction, to unsuspecting investors in the market… Read More

Penalties: $1,200,000.00
Respondent: BMO Capital Markets Corporation
Violation: BMO CMC failed to establish and implement policies and procedures that would be reasonably expected to detect whether its associated persons on the securities lending desk were engaging in transactions in which pre-released ADRs were inappropriately obtained by PreRelease Brokers and lent to BMO CMC, and used by BMO CMC for settling customer trades, lending to customers, or proprietary trading strategies… Read More

Penalties: $647,911.19
Respondent: Cantor Fitzgerald & Co
Violation: Cantor also failed to establish and implement effective policies and procedures to reasonably address whether its associated persons on the securities lending desk were engaging in transactions in which pre-released ADRs were appropriately obtained. As a result, Cantor’s supervisory policies and procedures were not reasonably designed and implemented to provide effective oversight of associated persons to prevent and detect their violations of Securities Act Section 17(a)(3), and Cantor failed reasonably to supervise its associated persons within the meaning of Section 15(b)(4)(E) of the Exchange Act… Read More

Penalties: N/A
Respondent: Thomas Gillons
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 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Thomas Gillons (“Respondent”)… Read More

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