Financial Enforcement Actions | Week of August 12 to 17

Financial Enforcement Action Summary

Weekly Enforcement Action Tracker

FRS

1 Enforcement Document

$0.00 in Fines

Penalties: N/A
Respondent: Jacob H. Goldstein
Violation: Respondent engaged in misconduct that constituted unsafe and unsound practices, violations of law, and breaches of fiduciary duty, that he received financial gain or benefit and Bank suffered loss or other damage, and the misconduct involved personal dishonesty or a willful and continuing disregard for Bank’s safety and soundness… Read More

FINRA

4 Enforcement Documents

$5,505,000.00 in Fines

Penalties: $5,000.00
Respondent: Lloyd Thomas Layton (“Layton”)
Violation: Between July 2012 and December 2014 (the “Relevant Period”), Layton engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts (“UITs”) in customer accounts. Based on the foregoing, Layton violated NASD Rule 2310 and FINRA Rules 2111 and 2010… Read More

Source: CCCB

Penalties: TBD
Respondent: William James Potter
Violation: Potter failed to disclose to the depositing party DEPARTMENT OF ENFORCEMENT, Complainant, v. WILLIAM JAMES POTTER (CRD No. 1281826), Respondent. 2 that, because he had been promised that he could keep $250,000 of the deposit, he had a financial interest in not returning the deposit — Potter thus had a conflict of interest with the depositing party in the event of a dispute… Read More

Penalties: TBD
Respondent: Brian Lawrence Stephan
Violation: From May 2012 through May 2014 (the “Relevant Period”), Respondent Brian L. Stephan (“Stephan” or “Respondent”) recommended and caused the execution of unsuitable investments for TF, an 88-year-old customer… Read More

Penalties: $5,500,000.00
Respondent: Interactive Brokers LLC
Violation: From July 2012 through June 2015, Interactive failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with the requirements of Regulation SHO… Read More

SEC

19 Enforcement Documents

$18,051,770.30 in Fines

Penalties: TBD
Respondent: SEC Complaint – Chad Anthony Lewis
Violation: Both Aegis and 7S offered and sold unregistered securities in the form of “joint venture units” in oil and gas development projects located in Texas. Through Lewis and other sales agents, Aegis raised approximately $35 million from about 250 investors nationwide, and 7S raised approximately $7 million from at least 70 investors. Lewis, through his work at Aegis Case 0:18-cv-61869-XXXX Document 1 Entered on FLSD Docket 08/13/2018 Page 1 of 9 2 and 7S, earned approximately $625,000 in commissions from the sale of these Aegis and 7S units… Read More

Source: FinanceFeeds

Penalties: $4,500,000.00
Respondent: Ameriprise Financial Services, Inc.
Violation: This matter concerns the failure of Ameriprise, a dually-registered investment adviser, and broker-dealer, to adopt and implement policies and procedures reasonably designed to safeguard retail investor assets against misappropriation by the firm’s representatives… Read More

Penalties: $200,000.00
Respondent: Lockwood Advisors, Incorporated
Violation: This matter arises from Lockwood’s failure to adopt and implement policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder in connection with its assessment, oversight, and disclosure of the trading away practices of the third-party portfolio management firms in its wrap programs… Read More

Penalties: $87,065.79
Respondent: NW Capital Markets Inc. and James A. Fagan
Violation: Between May 2012 and September 2014, Morris allocated certain new issue bonds to Scherr and CPM as part of offerings underwritten by NW Capital, with the understanding that Morris would buy the bonds back into NW Capital’s inventory… Read More

Penalties: TBD
Respondent: Alexander Charles White and Paul Douglas Vandivier
Violation: Alexander Charles White and Paul Douglas Vandivier illegally solicited and raised money from investors for Aegis Oil, LLC and 7S Oil & Gas, LLC. Both of these companies offered and sold unregistered securities in the form of “joint venture units” in oil and gas development projects located in Texas… Read More

Source: Investor.gov

Penalties: $1,092,013.00
Respondent: TelexFree, Inc. et al.
Violation: A promoter of a pyramid scheme targeting Latino communities has agreed to transfer assets valued at over $1 million in a related bankruptcy proceeding and admit his role in the scheme to settle charges brought by the Securities and Exchange Commission against him and nine other defendants… Read More

Penalties: TBD
Respondent: SEC Complaint – Alexander Charles White and Paul Douglas Vandivier
Violation: From approximately October 2012 until approximately January 2016, Defendants, Alexander Charles White and Paul Douglas Vandivier, solicited investors and managed other sales agents who solicited and raised money from investors in unregistered, fraudulent securities offerings conducted by Aegis Oil, LLC (“Aegis”) and 7S Oil & Gas, LLC (“7S”)… Read More

Penalties: $30,000.00
Respondent: Tomahawk Exploration LLC and David Thompson Laurance
Violation: Tomahawk and Laurance violated Sections 5(a) and 5(c) of the Securities Act by offering and selling TOM without having a registration statement filed or in effect with the Commission or qualifying for an exemption from registration with the Commission… Read More

Penalties: TBD
Respondent: Chad Anthony Lewis
Violation: Lewis illegally solicited and raised money from investors for Aegis Oil, LLC and 7S Oil & Gas, LLC. Both of these companies offered and sold unregistered securities in the form of “joint venture units” in oil and gas development projects located in Texas… Read More

Penalties: $254,009.30
Respondent: Charles Kerry Morris
Violation: Scherr and CPM engaged in a market practice called “flipping.” In the municipal bond context, flipping involves obtaining allocations of new issue municipal bonds from underwriters and then immediately re-selling or “flipping” the bonds at a profit once trading begins… Read More

Penalties: $366,752.00
Respondent: William E. Dawn
Violation: Dawn’s conviction arises out of his role in an offering fraud involving the misuse of investor funds… Read More

Penalties: N/A
Respondent: Daniel H. Glick, CPA
Violation: Engaged in a fraudulent scheme designed to benefit himself and his companies to the financial detriment of clients and two financial institutions; (b) as part of his scheme, Glick misappropriated at least several million dollars of funds from clients and financial institutions, and lied to clients about the use, status and safety of their invested funds; and (c) he created and provided false and misleading account statements to clients and made Ponzi-type payments to clients… Read More

Penalties: $75,000.00
Respondent: BKS Advisors LLC
Violation: BKS is an investment adviser registered with the Commission. From at least January 2012 to November 2017 (the “relevant time period”), Roger T. Denha, an investment adviser and investment adviser representative of BKS, engaged in fraudulent trade allocation, or “cherry-picking.”… Read More

Penalties: $616,618.00
Respondent: Roger T. Denha
Violation: From at least January 2012 to November 2017, Roger T. Denha, an investment adviser and investment adviser representative of BKS Advisors LLC (“BKS”), an investment adviser registered with Commission and based in Southfield, Michigan, engaged in fraudulent trade allocation, or “cherry-picking.”… Read More

Penalties: $204,698.94
Respondent: Honglan Wang
Violation: This matter involves insider trading by Respondent, an employee of MyoKardia, Inc. (“MyoKardia” or the “Company”), in advance of the Company’s August 7, 2017 announcement reporting positive results of a drug trial… Read More

Penalties: $85,894.00
Respondent: Lauren Zarksy, Dorothy Zarsky
Violation: Received tips of material, nonpublic information about negative drug trial results for Innate Immunotherapeutics… Read More

Penalties: $4,750,000.00
Respondent: Citigroup Inc.
Violation: These proceedings involve Citigroup Inc.’s (“Citigroup”) failure to devise and maintain a sufficient system of internal accounting controls concerning a wholly-owned subsidiary, the Mexican bank Grupo Financiero Banamex, S.A. de C.V. (“Banamex”), sufficient to provide reasonable assurances that Banamex’s transactions were recorded as necessary to permit the preparation of Citigroup’s financial statements in accordance with generally accepted accounting principles (“GAAP”) and to maintain accountability for assets… Read More

Penalties: $5,750,000.00
Respondent: Citigroup Global Markets Inc. and Citigroup Inc.
Violation: This matter involves CGMI’s failure reasonably to supervise its traders with a view towards preventing mismarking and unauthorized trading in Citi proprietary accounts that ultimately caused CGMI’s books and records, and those of its parent, Citigroup, to be inaccurate… Read More

Penalties: $39,719.27
Respondent: Lauren Zarsky, CPA
Violation: Respondent engaged in insider trading ahead of a June 26, 2017, negative drug trial announcement by Innate Immunotherapeutics, Inc. (“Innate”)… Read More

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