Financial Enforcement Actions | Week of Feb 10 to Feb 15
Respondent: Martin Kirschner
Violation: Kirschner failed to disclose a gift from a customer and failed to disclose his co-power-of-attorney appointment in violation of FINRA rules… Read More
Respondent: Marvin Thomas White, Jr.
Violation: White failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. As a result, White violated FINRA Rules 8210 and 2010… Read More
Respondent: John Kasel
Violation: From May 2011 through at least July 2012, Kasel engaged in an unapproved outside business activity by actively managing a customer’s real estate properties, for which Kasel received compensation. He therefore violated FINRA Rules 3270 and 2010… Read More
Respondent: Accelerated Capital Group, Inc.
Violation: Accelerated Capital Group, Inc. failed to establish and maintain a supervisory system reasonably designed to achieve compliance with federal securities law and FINRA rules. It also failed to: reasonably supervise the trading activity of registered representatives who engaged in excessive, unsuitable, and unauthorized trading; monitor the use of pre-signed and altered customer forms and documents; and report required information to FINRA… Read More
Respondent: Thomas A. Gallo
Violation: Between August and October 2014, Gallo negligently misrepresented a material fact in the sale of $100,000 in promissory notes to two investors. His actions contravened Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (the “Securities Act”), and thereby violated FINRA Rule 2010… Read More
Respondent: Thomas Edward Burns III
Violation: Between August 1, 2015, and July 31, 2016, Burns negligently made numerous mistakes causing errors and inaccuracies in identifying customer assets on Alternative Investment Forms (AIO Forms), thereby causing Crown Capital to have inaccurate books and records in violation of FINRA Rules 4511 and 2010… Read More
Respondent: Floyd E. Powell
Violation: Between July 2016 and December 2017 (the “Relevant Period”), Powell engaged in undisclosed and unapproved private securities transactions totaling approximately $3.49 million. Powell’s conduct violated FINRA Rules 3280 and 2010… Read More
Respondent: Kestra Investment Services, LLC
Violation: Kestra failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Kestra violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), F1NRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010… Read More
Respondent: Bruce Martin Zipper
Violation: Zipper also failed to establish and maintain a system, including written procedures, reasonably designed to supervise the Firm’s Caracas branch office or the Firm’s foreign bond business, in violation of NASD Rules 3010(a) and (b) and FINRA Rules 3110(a) and (b) and 2010… Read More
Respondent: Michael Royce Minghenelli
Violation: From November 2016 to February 2017 (the “Relevant Period”), Michael Royce Minghenelli (“Minghenelli” or “Respondent”), while registered with Merrill Lynch, Pierce, Fenner & Smith (“Merrill Lynch” or the “Firm”) converted approximately $200 from the Firm in violation of FINRA Rule 2010 by taking a cash advance — unrelated to any business purpose and made in contravention of the Firm’s written policies and procedures — against his corporate issued credit card… Read More
Respondent: Guy Stanley Waltman
Violation: Between 2010 and 2016, while registered with UBS, Waltman failed to inform the Firm that he had investment control over five securities accounts at three other FINRA member firms. Based on the foregoing, Waltman violated NASD Rule 3050 and FINRA Rule 2010… Read More
Respondent: Thomas J. Lisa, Jr.
Violation: Between June 2012 and July 2017, Lisa engaged in two outside business activities without providing prior written notice to his FINRA member firms. As a result, Lisa violated FINRA Rules 3270 and 2010… Read More
Respondent: Thomas E. Sova
Violation: Between May 2016 and July 2016 (the “Relevant Period”), Soya participated in three private securities transactions without providing written notice to, or obtaining approval from HTK in violation of FINRA Rules 3280 and 2010… Read More
Respondent: Kirk J. Bertsch
Violation: In October 2017, Bertsch engaged in an undisclosed and unapproved private securities transaction of selling a$50,000 promissory note. Bertsch’s conduct violated F1NRA Rules.3280 and 2010… Read More
Respondent: Direct Alternatives
Violation: Falsely claimed that people who used their products would lose weight quickly and easily and that the results were “proven” by scientific studies… Read More
Respondent: Treasure Your Success
Violation: The FTC is mailing 1,244 checks to people who were contacted via illegal robocalls and sold deceptively marketed credit card interest rate reduction services… Read More
Respondent: Troth Solutions
Violation: Troth Solutions pretended to be associated with major technology companies to trick people into giving up remote access to their computers. After gaining access, the defendants allegedly ran fake “diagnostic tests” and then persuaded people to pay hundreds of dollars for unnecessary computer repairs, service plans, anti-virus software, and other products and services… Read More
Respondent: Fat Giraffe Marketing Group LLC
Violation: Starting in 2014 and continuing through 2017, Gregory W. Anderson, Garrett P. Robins, and five companies they controlled, charged consumers an up-front fee, typically $97, to join a program that purportedly would allow them to make significant income from home by posting advertising links onto websites. Consumers who paid this fee soon realized the program did not actually supply any advertising links or pay them to perform any work… Read More
Respondent: Timothy S. Batchelor
Violation: During 2015, Batchelor engaged in a fraudulent scheme by, in connection with an unregistered offering of interests in a fund to be managed by the investment adviser with which Batchelor was associated, misrepresenting the amount invested and the intended use of proceeds, and utilizing investor proceeds for undisclosed personal expenses… Read More
Respondent: Pennant Management, Inc.
Violation: Accordingly, for good cause shown, IT IS HEREBY ORDERED that the Division’s request for an extension of time until August 30, 2019 to submit a Proposed Plan of Distribution is granted… Read More
Respondent: Cognizant Technology Solutions Corporation
Violation: During the relevant period Cognizant also failed to devise and maintain a sufficient system of internal accounting controls at its corporate headquarters and at Cognizant India. This conduct took place in an environment in which Cognizant failed to adequately enforce its corporate antibribery and anticorruption policies… Read More
Respondent: NL Technology, LLC et al.
Violation: NL Technology, Ngo, and Baca raised more than $61 million from over 350 investors by falsely promising that the money would be used to fund NL Technology’s wholesale technology import business… Read More
Respondent: PixarBio Corp. et al.
Violation: Reynolds and Stromsland misled investors with false claims about PixarBio’s progress in developing a purported method of delivering non-opiate, post-operative pain medication… Read More
Respondent: Michael J. Kipp, et al.
Violation: During the second through fourth quarters of 2011, Kipp took advantage of Swisher’s ineffective internal controls and directed his accounting group to change various acquisition-related reserves and expenses to increase earnings to predetermined targets… Read More
Respondent: Kevin R. Kuhnash and Jason P. Jimerson
Violation: Routinely lied to its customers and falsified its certifications of test data to show that its products complied with customer specifications, including on important aspects such as fire-retardant measures, when in fact the products did not meet customer specifications… Read More
Respondent: Jason McDiarmid, et al.
Violation: McDiarmid and Telford took Interactive Multi-Media public and then orchestrated a promotional campaign touting its stock while they dumped their shares, selling them through nominees. McDiarmid and Telford made approximately $3.3 million in profits… Read More
Respondent: Gene Daniel Levoff
Violation: Gene Daniel Levoff, an attorney who previously served as Apple’s global head of corporate law and corporate secretary, received confidential information about Apple’s quarterly earnings announcements in his role on a committee of senior executives who reviewed the company’s draft earnings materials prior to their public dissemination. Using this confidential information, Levoff traded Apple securities ahead of three quarterly earnings announcements in 2015 and 2016 and made approximately $382,000 in combined profits and losses avoided… Read More
Respondent: Deloitte Touche Tohmatsu LLC, Futomichi Amano and Yuji Itagaki
Violation: All three respondents engaged in improper professional conduct and were a cause of certain reporting violations by Company A. Deloitte Japan also violated, and Amano and Itagaki were a cause of Deloitte Japan’s violations of, Rule 2-02(b) of Regulation S-X… Read More
Respondent: Blockvest, LLC, et al.
Violation: The defendants claimed that they were planning to raise funds through an initial coin offering (“ICO”) for several financial products that would generate passive income and double-digit returns based on misrepresentations about the firm’s regulatory status… Read More
Respondent: Hector A. May
Violation: Respondent misappropriated at least $7.9 million from at least 15 investment advisory clients by perpetrating a Ponzi scheme in which Respondent offered to buy bonds for investment advisory clients, solicited their funds for the investments, and then diverted the money for his own use… Read More
Respondent: Inteligentry, Ltd., PlasmERG, Inc., PTP Licensing, Ltd. and John P. Rohner
Violation: The defendants raised more than $1.8 million from investors by falsely claiming that the companies had developed, tested, and patented an operational “plasma engine” fueled by abundant and inexpensive noble gases, which they claimed would replace the internal combustion engine… Read More
Respondent: Joshua Sason, et al.
Violation: From approximately December 2012 to June 2013, microcap stock financier Magna Group, which was founded and owned by Joshua Sason, engaged in a scheme to acquire fake convertible promissory notes supposedly issued by penny stock issuer Lustros Inc. and then to convert those notes into shares of Lustros common stock… Read More
Respondent: Jeffrey M. Mattich
Violation: Mattich participated in various revenue-inflation, expense deferral, and account receivable schemes that resulted in HSOA materially misstating its financial condition and operating results in filings with the Commission, in offering documents, and in other statements to investors… Read More
Respondent: Brian Hirsch et al.
Violation: While employed on the wealth syndicate desk of two different brokerage firms, Hirsch entered into undisclosed arrangements with certain customers in violation of the firms’ initial and other public offering allocation policies and procedures… Read More
Respondent: Gordon J. Coburn and Steven E. Schwartz
Violation: Gordon Coburn, Cognizant’s President, and Steven E. Schwartz, the company’s Chief Legal Officer, authorized the contractor to pay the bribe, and directed their subordinates to conceal the bribe by doctoring the contractor’s change orders… Read More