Financial Enforcement Actions | Week of Feb 03 to Feb 08

Financial Enforcement Action Summary

Weekly Enforcement Action Tracker

FINRA

12 Enforcement Documents

$35,000.00 in Fines

Penalties: TBD
Respondent: Andrew Manuel Garcia
Violation: From April 27, 2017 until June 14, 2017 (the “Relevant Period”), while associated with Charles Schwab & Co., Inc. (“Schwab” or the “Firm”), a FINRA-regulated broker-dealer, Respondent Andrew Manuel Garcia (“Garcia”) converted approximately $3,392 belonging to SR, a Firm customer. By converting customer funds, Garcia violated FINRA Rules 2150(a) and 2010… Read More

Penalties: N/A
Respondent: Bhenoy (“Ben”) Dembla
Violation: Between December 2015 and April 2016, Dembla entered and later canceled 41 fictitious mutual fund sell orders to circumvent restrictions placed by his firm and mutual fund providers on the amount of Class B shares an investor can own. Dembla also made false entries on firm databases as to why the clients wanted to sell Class B shares. By so doing, Dembla violated FINRA Rules 2010 and 4511… Read More

Penalties: $25,000.00
Respondent: Donald Logan
Violation: At various times between September 2014 and September 2018 (the “Relevant Period”), Logan exercised discretionary trading authority approximately 365 times in approximately 42 customer accounts without obtaining prior written authorization from his customers or prior written approval from his broker-dealer employers, in violation of NASD Rule 2510(b) and FINRA Rule 2010. Logan also executed 11 unauthorized transactions in three customer accounts, in violation of FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Christopher T. Dallas
Violation: On March 2, 2017, Dallas approved four variable annuity exchange applications involving two customers (a husband and wife), despite knowing that information relating to, among other things, fees had been altered on the disclosure documents after the customers signed them. Consequently, Dallas violated FINRA Rules 3110 and 2010 for failing to reasonably supervise the transactions… Read More

Penalties: N/A
Respondent: Michael Castillero
Violation: In connection with its investigation of Castillero’s conduct with respect to a customer account at Alexander Capital, FINRA staff requested pursuant to Rule 8210 that Respondent appear to provide on-the-record testimony. Castillero refused to provide testimony pursuant to that request. As a result, Castillero violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Casey Wayne Walker
Violation: In 2019, Walker failed to provide documents and information requested pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Mitchell Bloom
Violation: Bloom has refused to appear for testimony requested pursuant to FINRA Rule 8210 on the date scheduled or at any time. By refusing to provide on-the-record testimony as requested pursuant to FINRA Rule 8210, Bloom violates FINRA Rules 8210 and 2010… Read More

Penalties: TBD
Respondent: James Paquette
Violation: James Paquette was charged with a felony in May 2016 but willfully failed to disclose the charge on his Uniform Application for Securities Industry Registration (“Form U4”) for more than a year after learning about the charge. By doing so, Paquette violated Article V, Section 2(c) of FINRA’ s By-Laws and FINRA Rule 1122, and he also failed to observe high standards of commercial honor, violating FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Kitwana Thomas
Violation: Fidelity sponsored a program by which it reimbursed its employees for personal computer equipment purchases. After obtaining the maximum reimbursement allotted to a Fidelity employee under the program, between August and November 2016, Thomas obtained additional reimbursement of $3,700 to which he was not entitled by utilizing the online login and password information for three other Fidelity employees. Thomas purchased computer equipment, submitted purchase receipts using the other employees’ online accounts, and then canceled the orders or returned the equipment. The employees then paid to Thomas a total of $3,700 of the reimbursements they received. By converting Firm funds, Thomas violated FINRA Rule 2010… Read More

Penalties: TBD
Respondent: Kapil Maheshwari
Violation: In September 2017, former Credit Suisse Securities (USA) LLC (“Credit Suisse” or the “Firm”) investment banker Kapil Maheshwari (“Maheshwari”) violated these basic tenets and used confidential and proprietary information he learned in the course of his employment to trade in Company A. He had worked on a Credit Suisse deal team representing a client (Company B) seeking to acquire Company A. Maheshwari’s trades were within days of his departure from Credit Suisse, when he was still registered with FINRA as an Investment Banking Representative… Read More

Penalties: $5,000.00
Respondent: Jeffery E. Meyerson
Violation: Between August 3, 2015 and August 24, 2016 (the “Relevant Period”), Meyerson used a personal email address to conduct securities business on over 200 occasions, causing Capital City to fail to input, maintain, and preserve required books and records and resulting in Meyerson’s violation of FINRA Rule 4511 and 2010… Read More

Penalties: N/A
Respondent: Elizabeth Marie Garcia
Violation: From January 1, 2016 through January 31, 2017 (the “Relevant Period”), while associated with the Firm and employed by the Bank, Garcia converted Bank funds in violation of FINRA Rule 2010 by obtaining approximately $9,015 in reimbursement from the Bank for childcare expenses that she did not incur. In order to obtain reimbursement, Garcia intentionally misrepresented to the Bank that she had paid a daycare facility for childcare services and also fabricated receipts and other documents purporting to be from the daycare facility… Read More

SEC

16 Enforcement Documents

$736,980.56 in Fines

Penalties: $694,915.00
Respondent: Spark Trading Group, LLC and Niket Shah
Violation: Spark Trading Group LLC, falsely claimed that Spark Trading was registered with the SEC; that their investments were profitable; that investors’ funds were guaranteed; and that defendants received $250,000 in start-up capital, including $200,000 that Shah deposited into a binary options trading account… Read More

Penalties: TBD
Respondent: Thomas Conrad, Jr. et al.
Violation: From 2010 to 2014, Conrad directed preferential redemptions and other disbursements from funds advised by FMC and FMC Uruguay for himself, his extended family, and certain favored investors, while representing to other investors that redemptions were suspended… Read More

Penalties: N/A
Respondent: GLG Partners, Inc. and GLG Partners, L.P.
Violation: Respondents failed to design and maintain adequate internal controls related to the valuation of fund assets, on the basis of which fee revenues were calculated and recorded. As a result of GLG’s deficient valuation policies and procedures, the monthly valuation for a particular asset in its fund was overstated by approximately $160 million during the period from November 1, 2008 through November 30, 2010… Read More

Penalties: $42,065.56
Respondent: Daniel J. Callahan
Violation: These proceedings concern insider trading by Callahan, an outside legal counsel to Monster Beverage Corporation (“Monster”), in advance of an August 2014 announcement regarding Monster’s partnership with the Coca-Cola Company (“Coke”). In the course of his representation of Monster, Callahan became aware of material, nonpublic information that the deal between Monster and Coke was nearly finalized. Less than two months before the announcement, Monster consulted Callahan’s law firm in connection with due diligence efforts regarding the deal with Coke, in light of the law firm’s representation of Monster in certain ongoing litigation matters… Read More

Penalties: N/A
Respondent: Andrew B. Scherr
Violation: From March 2013 to February 2014, Scherr aided and abetted a scheme to defraud SLA’s investors; Scherr’s primary role in the fraudulent scheme was to acquire assets Scherr knew were either worthless or greatly overvalued, and to transfer those assets to SLM… Read More

Penalties: TBD
Respondent: Edward Withrow, et al.
Violation: The Securities and Exchange Commission previously charged all three defendants with a scheme to defraud potential investors in Endeavor’s publicly traded stock… Read More

Penalties: N/A
Respondent: Onstream Media Corp.
Violation: Onstream Media has failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the period ended June 30, 2016… Read More

Penalties: N/A
Respondent: Bio-AMD, Inc.
Violation: Bio-AMD has failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it has not filed any periodic reports since it filed a Form 10-Q for the period ended September 30, 2016, which reported a net loss of $76,218 for the prior nine months… Read More

Penalties: TBD
Respondent: Robert Alexander and Kizzang LLC
Violation: Fraudulently raising approximately $9 million from more than 50 individuals by selling investments in Kizzang LLC, a purported online gaming business… Read More

Penalties: N/A
Respondent: Frank Dinucci, Jr.
Violation: Respondent caused false and misleading representations and omissions to be made to current and prospective investors of a New York-based hedge fund (the “Hedge Fund”) regarding net asset values, including by providing artificially inflated marks to the Hedge Fund on its securities… Read More

Penalties: N/A
Respondent: Affirmative Insurance Holdings, Inc., Armada Oil, Inc. and Chuma Holdings, Inc.
Violation: The initial decision ordered that, pursuant to Section 12(j) of the Securities Exchange Act of 1934, the registrations of the registered securities of Affirmative Insurance Holdings, Inc., Armada Oil, Inc., and Chuma Holdings, Inc., are revoked. The revocation is effective as of February 8, 2019… Read More

Penalties: TBD
Respondent: Joseph S. Amundsen, CPA, Michael T. Remus, CPA, and Michael Remus CPA
Violation: These proceedings arise out of multiple violations of the auditor independence requirements in audits conducted of seven broker-dealers in both 2015 and 2016. Specifically, Amundsen, a certified public accountant who in 1983 was permanently enjoined from appearing or practicing before the Commission in any way, served as the Engagement Quality Reviewer (“EQR”) on fourteen audits of certain broker-dealers for which Amundsen’s daughter was the financial and operations principal (“FINOP”)… Read More

FTC

3 Enforcement Documents

$6,000,000.00 in Fines

Penalties: $6,000,000.00
Respondent: Tarr Inc.
Violation: Used unsupported claims, fake magazine and news sites, bogus celebrity endorsements, and phony testimonials to sell more than 40 different products related to weight loss, muscle building, and wrinkle-reduction… Read More

Penalties: TBD
Respondent: Monier Lifetile LLC, Boral Ltd., and Lafarge S.A
Violation: Violating federal antitrust laws by establishing a joint venture, Monier Lifetile LLC, that combined the concrete roofing tile (CRT) manufacturing divisions of the two largest producers of CRT in the United States… Read More

Penalties: TBD
Respondent: Global Asset Financial Services Group, LLC
Violation: Global Asset Financial Services Group, LLC, doing business in North Carolina and New York, falsely claimed to be attorneys or affiliated with attorneys to pressure consumers into making payments on debts they did not owe, and threatened to take legal action against consumers if they did not pay… Read More

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