Financial Enforcement Actions | Week of December 16 to 21
Respondent: Corpus Christi Polymers LLC, et al.
Violation: Three PET resin producers have agreed to restructure their transaction and to accept certain other conditions to settle Federal Trade Commission charges that their proposed $1.1 billion joint acquisition out of bankruptcy of an under-construction PET production facility would violate federal antitrust law… Read More
Respondent: Diane Ludwig
Violation: Between December 2013 and May 2018, while employed as the Bank’s cashier, BSA Officer, IT Officer, and Lending Compliance Officer, Ludwig embezzled approximately $491,000 from the Bank’s general ledger accounts… Read More
Respondent: Adam Michael Lopez
Violation: In November 2018, Lopez violated FINRA Rules 8210 and 2010 by refusing to provide documents and information requested pursuant to FINRA Rule 8210… Read More
Respondent: UBS Securities LLC , UBS Financial Services, Inc.
Violation: UBSFS, beginning in 2004, and UBSS, beginning in 2008, did not establish and implement AntiMoney Laundering (“AML”) programs reasonably designed to detect and cause the reporting of potentially suspicious activity… Read More
Respondent: Annemarie Thomas
Violation: On October 18, 2016 while associated with the Firm, in an effort to accommodate a customer, Thomas assisted in the submission of a Letter of Authorization (“LOA”) authorizing funds to be wired from the customer’s account, as well as other documents, that Thomas knew or should have known were not genuine. Although the customer had previously approved the wire transfer, the customer did not execute the LOA and, in fact, was out of the country at the time at the time of its purported execution. By virtue of the foregoing, Thomas violated FINRA Rule 2010… Read More
Respondent: Tradition Securities and Derivatives, Inc.
Violation: Between August 2013 and August 2016 (the “Relevant Period”), Tradition facilitated the sale of Venezuelan and Argentinian bonds without having in place a reasonable anti-money laundering (“AML”) compliance program that was tailored to the Firm’s foreign bond business… Read More
Respondent: Peter Chris Marketos (“Marketos” or “Respondent”)
Violation: From 2011 to November 2015 (the “Relevant Period”), Marketos made unsuitable recommendations to concentrate three customers’ investments in speculative high yield bonds in violation of NASD Rule 2310 (for conduct through July 8, 2012), and FINRA Rules 2111 (for conduct from July 9, 2012) and 2010… Read More
Respondent: Nina Tran
Violation: During the course of an ongoing examination, Tran failed to respond to a FINRA Rule 8210 request for information and documents, thereby violating FINRA Rules 8210 and 2010… Read More
Respondent: Cetera Advisor Networks LLC
Violation: Between January 2009 and January 2015 (the “Relevant Period”), CAN failed to respond reasonably to red flags of unsuitable mutual fund switching, and unsuitable stock trading intended to conceal the switching, by one of its registered representatives, MK. MK’s misconduct spanned six years; occurred in the accounts of 14 customers, including seniors; involved hundreds of unsuitable mutual fund switches and related stock trades, and caused nearly $700,000 in customer losses… Read More
Respondent: Chardan Capital Markets LLC
Violation: The Financial Industry Regulatory Authority’s (“FINRA”) Department of Market Regulation, Offering Surveillance Group (“staff”), conducted a review of the firm’s compliance with Rules 101and 104 of SEC Regulation M; rules promulgated by FINRA and-other SROs requiring that the firm provide various notices to the relevant SROs as a result of the firm’s participation in a distribution of securities; and related supervisory requirements during the period of November 28. 2014. through September 30, 2015… Read More
Respondent: Merrill Lynch, Pierce, Fenner & Smith Inc.
Violation: From 2010 through March 2018 (the “Relevant Period”), Merrill Lynch violated Rule 5130 by making at least 1,462 prohibited sales of IPO shares in 325 different offerings to 149 customer accounts in which restricted persons held a beneficial interest… Read More
Respondent: Charles Joseph Lawrence, Ami Kathryn Forte
Violation: From September 2011 through June 2012 (the “Relevant Period”), while registered with member firm Morgan Stanley, Respondents Ami Kathryn Forte and Charles Joseph Lawrence exploited RS, a 79-year-old customer suffering from severe cognitive impairment. Forte and Lawrence engaged in qualitatively and quantitatively unsuitable trading in RS’s accounts, generating more than $9 million in commissions in less than one year. In addition, Lawrence repeatedly exercised trading discretion without authorization in RS’s accounts, including during periods when RS was hospitalized and unable to communicate… Read More
Respondent: Seth Andrew Nannini
Violation: Between approximately March 2010 and March 2011 (the “Relevant Period”) Nannini participated in seven private securities transactions totaling $291,500 without disclosure to or approval from his FINRA member firm. As a result of the foregoing, Nannini violated NASD Rule 3040 and FINRA Rule 2010… Read More
Respondent: J.P. Morgan Securities LLC
Violation: The examination found that, from February 2015 through June 2016, as a result of a vendor’s system configuration, Mid-Price Peg, Immediate or Cancel orders were misclassified in the firm’s Rule 605 reports… Read More
Respondent: Peter Cho
Violation: Peter Cho illegally bought Virgin America Inc. options prior to the April 4, 2016 public announcement that Alaska Air Group, Inc. would acquire Virgin. Cho learned of Alaska’s efforts to purchase Virgin by listening to conversations of his now-wife, who worked on the deal from their shared apartment at night and on weekends… Read More
Respondent: NB Alternatives Advisers LLC
Violation: From 2011 through 2016, NBAA and its affiliates (“Neuberger”) sponsored and managed three private equity funds, known as the “Dyal Funds.” The investment objective of each Dyal Fund was to acquire minority stakes in alternative investment management companies, sometimes referred to as “Partner Managers… Read More
Respondent: UBS Financial Services Inc.
Violation: This matter concerns Respondent’s violations of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder in connection with its failure to file suspicious activity reports (“SARs”) in compliance with these reporting requirements… Read More
Respondent: Santander Consumer USA Holdings Inc.
Violation: For at least eight reporting periods, SCUSA failed to calculate and report its incurred credit loss allowance in conformity with Generally Accepted Accounting Principles (“GAAP”)… Read More
Respondent: The Bank of New York Mellon
Violation: These proceedings arise out of BNY Mellon’s improper practices involving the pre-release of American Depositary Receipts (“ADRs”)… Read More
Respondent: Paul A. Margis
Violation: Beginning in 2007, Paul A. Margis (“Margis”) participated in a plan whereby Panasonic Avionics Corporation (“PAC”), a wholly-owned, U.S. subsidiary of Panasonic Corporation (“Panasonic”), offered a lucrative consulting position to a government official (“Government Official”) who assisted PAC in obtaining and retaining business from a state-owned airline (“Government Airline”)… Read More
Respondent: Ancora Advisors LLC
Violation: These proceedings involve violations of the Commission’s “pay-to-play” rule for investment advisers by Respondent Ancora Advisors, an investment adviser. Rule 206(4)-5, promulgated under Section 206(4) of the Advisers Act, is a prophylactic rule designed to address pay-to-play abuses involving campaign contributions made by certain investment advisers or their covered associates to government officials who are in a position to influence the selection of investment advisers to manage government client assets, including the assets of public pension funds and other public entities… Read More
Respondent: Chris D. Rosenthal
Violation: Between January 2012 and May 2016 (the relevant period), Rosenthal engaged in a series of practices with certain unregistered brokers who falsely posed as retail investors in order to obtain new issue municipal bonds that they may not otherwise have been able to obtain… Read More
Respondent: Takeshi “Tyrone” Uonaga
Violation: Uonaga knowingly circumvented PAC’s internal accounting controls concerning revenue recognition and caused the company’s books and records to contain false information… Read More
Respondent: Robert S. “Lute” Davis, Jr., et al., Jordan E. Goodman., Alan H. New, et al.
Violation: Unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors. Woodbridge collapsed into bankruptcy in December 2017 and the SEC previously charged the company, its owner and others with operating a $1.2 billion Ponzi scheme and charged five of the top Florida-based sales agents for securities and broker-dealer registration violations… Read More
Respondent: Andrew F. Nicoletta, et al.
Violation: From July 1, 2013 through December 31, 2015 (the “Relevant Period”), the Respondents violated Rule 105 in connection with 116 separate offerings, in each case by selling short shares of the issuer during the Rule 105 restricted period, and then purchasing shares in those issuers’ offerings… Read More
Respondent: Central States Capital Markets, LLC
Violation: These proceedings arise out of the failure of Central States Capital Markets, LLC (“Central States”), a registered broker-dealer, (1) to file Suspicious Activity Reports (“SARs”) when it knew, suspected, or had reason to suspect that certain transactions were conducted in order to hide or disguise funds derived from illegal activity or had no apparent lawful purpose, and (2) to accurately document the procedures set forth in its customer identification program (“CIP”)… Read More
Respondent: American Portfolios Advisors, Inc.
Violation: From July 2012 to March 2016 (the “Relevant Period”), APA invested advisory clients in mutual fund share classes that charged 12b-1 fees instead of less expensive share classes of the same funds that were available without 12b-1 fees in many instances… Read More
Respondent: Grenda Group, LLC, et al.
Violation: Walter Grenda continued to associate with Grenda Group, LLC – an entity he and his son, Gregory M. Grenda, formed in part to replace his previous investment advisory business, Reliance Financial Advisors, LLC – despite a July 2015 Commission order barring him from association with an investment adviser with the right to reapply after three years… Read More
Respondent: PPS Advisors, Inc and Lawrence Nicholas Passaretti
Violation: From July 2012 to March 2016 (the “Relevant Period”), PPS and Passaretti invested advisory clients in mutual fund share classes that charged 12b-1 fees instead of less expensive share classes of the same funds that were available without 12b-1 fees in many instances… Read More
Respondent: Sterling Global Strategies LLC
Violation: From at least 2010 through 2018 (the “relevant period”), Sterling, a registered investment adviser, made material misstatements and omissions to its clients and prospective clients in advertising the back-tested performance of the Sterling Tactical Rotation Index (the “Sterling Index”)… Read More
Respondent: Crowe Horwath LLP, Joseph C. Macina, CPA and Kevin V. Wydra, CPA
Violation: This matter involves improper professional conduct regarding the audit of Corporate Resource Services, Inc. (“CRS”), a temporary staffing services company, for the fiscal year ended January 3, 2014… Read More
Respondent: Thoroughbred Financial Services, LLC, Thomas Jenkins Parker, and Lawrence Randall “Randy” Hartley
Violation: TFS failed to adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder in connection with its mutual fund share class selection practices… Read More