Financial Enforcement Actions | Week of February 15 to February 21

Enforcement Report Feb 15-21 feat

Enforcement Report Feb 15-21

CFPB

2 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Candy Kern-Fuller, Howard Sutter III, and Upstate Law Group LLC
Violation: The defendants worked with a series of companies that brokered contracts offering high-interest credit to consumers, primarily disabled veterans, and violated the Consumer Financial Protection Act’s prohibition against deceptive acts or practices and against providing substantial assistance to deceptive and unfair acts or practices of others... Read More

FTC

4 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Office Depot and Support.com
Violation: Office Depot and Support.com configured a virus scanning program to report that it found symptoms of malware or infections—even when that was not true—whenever customers answered yes to at least one of four “diagnostic” questions. The false scan results were then used to persuade people to purchase computer repair and technical services that could cost hundreds of dollars... Read More

Penalties: N/A
Respondent: One Rock Capital Partners II, LP
Violation: The combination of FXI and Innocor would substantially lessen competition for low-density conventional polyurethane foam used in home furnishings in three regional markets: the Pacific Northwest (Oregon and Washington); the Midwest states of Indiana, Michigan, and Ohio; and Mississippi.... Read More

FINRA

4 Enforcement Documents

$55,000.00 in Fines

Penalties: $5,000.00
Respondent: Thomas M. Murphy
Violation: Murphy executed fifteen subscription agreements as an "authorized signatory" for Merrill Lynch, without the Firm's authorization, to assist clients of the Firm's self-directed brokerage business invest in third-party private real estate funds. By virtue of this misconduct, Murphy violated FINRA Rule 2010... Read More

Penalties: $20,000.00
Respondent: Morgan Stanley & Co. LLC
Violation: During the period between December 2015 and January 2019, two individuals employed by a foreign affiliate of the firm entered orders on behalf of the firm, although they were not registered with FINRA to act in such a capacity. By allowing these individuals to effect these transactions, the firm violated NASD Rules 1031(a) and 1032(f) (for the period from December 2015 through September 30, 2018), FINRA Rules 1210 and 1220(b)(4) (for the period from October 1, 2018 through January 2019) and FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Paolo Monaco
Violation: Alter receiving a request for on-the-record testimony issued FINRA stall under FINRA Rule 8210. Respondent notified FINRA staff that he does not intend to appear for testimony or otherwise cooperate with FINRA's investigation... Read More

Penalties: $30,000.00
Respondent: Wedbush Securities, Inc.
Violation: Between January 1 and June 30, 2017 (the "Review Period"), Wedbush failed to transmit to OATS 237,457 reportable order events ("ROEs") and inaccurately transmitted an additional 82,959 ROEs. As a result, the Firm violated FINRA Rules 7450 and 2010... Read More

UK-FCA

4 Enforcement Documents

£3,613,535.71 in Fines

Penalties: £838,953.71
Respondent: Elizabeth Marie Walker
Violation: Ms Walker has acknowledged her lack of competence and capability at C3, and the serious consequences arising from it, and has applied herself to improving her knowledge and understanding of relevant matters by undertaking training, the Authority is not satisfied that Ms Walker has achieved a sufficient standard of competence and capability to carry out the CF30 role at Wesleyan... Read More

Penalties: N/A
Respondent: Spiral Cycles Limited
Violation: SCL is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that SCL is a fit and proper person having regard to all the circumstances, including whether SCL managed its business in such a way as to ensure that its affairs were conducted in a sound and prudent manner... Read More

Penalties: N/A
Respondent: Thames Auto Sales
Violation: TAS is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that TAS is a fit and proper person having regard to all the circumstances, including whether TAS managed its business in such a way as to ensure that its affairs were conducted in a sound and prudent manner... Read More

Penalties: £2,774,400.00
Respondent: Moneybarn Limited
Violation: On the basis of the facts and matters described below, between 1 April 2014 and 4 October 2017, Moneybarn breached Principle 6 (Customers’ interests) and Principle 7 (Communications with clients) of the Authority’s Principles for Businesses... Read More

CFTC

4 Enforcement Documents

$22,699,153.80 in Fines

Penalties: $22,699,153.80
Respondent: Dinar Corp., Inc., My Monex, Inc., a Nevada corporation, and Husam Tayeh
Violation: Among other things, Tayeh conceded liability for making one or more fraudulent misrepresentations in violation of 7 U.S.C. §6b(a)(2)(A), (C) and 17 C.F.R. §5.2(b)(1), (3) and failing to register as an associated person of a retail foreign exchange dealer in violation of 7 U.S.C. §2(c)(2)(C)(iii)(I)(aa) and 7 C.F.R. §5.3(a)(6)(ii). (See Doc. 180.)... Read More

Penalties: N/A
Respondent: Winston Reed Investments LLC and Mark N. Pyatt, aka Daniel Randolph
Violation: Defendants solicited and received these funds in connection with pooled trades in commodity futures contracts ("futures") and retail foreign exchange transactions ("forex"), among other things. In doing so, Defendants misappropriated most of pool participants' funds for business expenses and personal use, and to make Ponzi-like payments to other pool participants... Read More

SEC

19 Enforcement Documents

$508,104,535.29 in Fines

Penalties: $500,000,000.00
Respondent: Wells Fargo & Company
Violation: These proceedings arise out of a fraud committed by Wells Fargo from 2012 through 2016, when the Company misled investors regarding the success of the core business strategy of the Community Bank operating segment, its largest business unit... Read More

Penalties: N/A
Respondent: Marcus Boggs
Violation: From 2016 to 2018, Boggs stole more than $1.7 million from at least three of his investment advisory clients; that without his clients’ knowledge or authorization, Boggs misappropriated his clients’ money by selling securities in their advisory accounts and then transferring the proceeds to his personal credit
card account; and that Boggs made more than 200 illegal transfers from three investment advisory clients’ accounts to pay for his credit card purchases... Read More

Penalties: N/A
Respondent: Richard Jeffrey Rubin
Violation: Respondent did not, and does not, possess the requisite qualifications to represent others before the Commission and is lacking in character or integrity as provided in Section 4C(a)(2) of the Exchange Act and Rule 102(e)(1)(i)-(ii) of the Commission’s Rules of Practice... Read More

Penalties: $1,322,971.00
Respondent: Fieldstone Financial Management Group, LLC and Kristofor R. Behn
Violation: Fieldstone Financial Management Group, LLC (“Fieldstone”) did not disclose material conflicts of interest to their advisory clients. Behn and Fieldstone also solicited an advisory client to invest $1 million in Fieldstone without disclosing that Behn planned to use much of the money to cover his personal expenses... Read More

Penalties: $500,000.00
Respondent: Enigma MPC
Violation: Enigma violated Sections 5(a) and 5(c) of the Securities Act by offering and selling these securities without having a registration statement
filed or in effect with the Commission or qualifying for exemption from registration with the Commission... Read More

Penalties: $5,000,000.00
Respondent: Diageo plc
Violation: Diageo failed to make required disclosures of known trends and uncertainties, thereby rendering its required periodic filings materially misleading to investors with respect to its financial results... Read More

Penalties: N/A
Respondent: Richard G. Cody, et al.,
Violation: Cody allegedly continued to hide that the retirees' money was gone by making wire transfers of monthly deposits to the retirees' bank accounts and sending the clients fabricated tax forms. The SEC alleges that these deceptive acts caused Cody's clients to believe that their retirement savings were secure when, in fact, they were not. The SEC's complaint alleges that Cody violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and seeks disgorgement of ill-gotten gains plus interest and penalties as well as permanent injunctive relief. The SEC also seeks a court-ordered asset freeze against Cody and Boston Investment Partners, which was named as a relief defendant, a temporary restraining order, and a detailed accounting of Cody's assets... Read More

Penalties: N/A
Respondent: EquiAlt LLC et al.,
Violation: The defendants allegedly told investors they would pool investor funds and use approximately 90% of the money to purchase under-valued real estate, rent or flip the properties, and pay investors 8-10% annual interest generated from the real estate investments. In reality, the complaint alleges, a large portion of investor money went to support Davison's and Rybicki's lavish personal spending, and less than 50% of the funds raised were used to invest in properties. In addition, money from one investment fund controlled by EquiAlt was allegedly used to make Ponzi-like payments to investors in another fund. On February 14, 2020, a federal judge granted the SEC's request for emergency relief, including a temporary restraining order, an asset freeze, an order against the destruction of documents, and an accounting against EquiAlt, Davison, Rybicki and a number of companies charged by the SEC as relief defendants... Read More

Penalties: N/A
Respondent: "Navellier & Associates, Inc., and Louis Navellier"
Violation: "The SEC's complaint alleges that the defendants breached their fiduciary duties and defrauded their advisory clients and prospective clients through the use of marketing materials that included false and misleading statements regarding the performance of the firm's Vireo AlphaSector investment strategies."... Read More

Penalties: $62,007.00
Respondent: Emmanuel Kouyoumdjian (a/k/a "Manny K")
Violation: "According to the SEC's complaint, Kouyoumdjian, a formerly registered, and later disbarred, stockbroker, acted as an unregistered broker of the common stock of ForceField Energy, Inc., then a public ""alternative energy"" company with common stock traded on the Nasdaq Capital Market.
Kouyoumdjian solicited potential investors in a nationwide cold-calling campaign, touted the supposed merits of ForceField, negotiated and closed stock sales, and was paid commissions for each investment by ForceField's Chairman through an offshore bank account he controlled... Read More

Penalties: N/A
Respondent: "Winston Reed Investments LLC,"
Violation: According to the SEC's complaint, beginning in April 2017, Winston Reed Investments LLC and Mark N. Pyatt raised hundreds of thousands of dollars from retail investors by representing they would use a sophisticated trading strategy to trade in futures contracts, foreign exchange, and stocks. Instead, Pyatt allegedly used the vast majority of investor money for personal items, including vehicles, jewelry, groceries, and cigars. Winston Reed and Pyatt also allegedly used a portion of new investor money to make payments to other investors. The complaint further alleges that in an attempt to cover up his fraud, Pyatt provided investors with updates purporting to show substantial monthly returns based on his trading, and later claimed that all investor money had been lost as a result of a brokerdealer not following his trading instructions... Read More

Penalties: $32,429.00
Respondent: Richard Lee, et al
Violation: The SEC filed its action in July 2013, alleging that Aggarwal tipped Lee in advance of the public announcement of an internet search engine partnership between two technology companies. Lee's trading enabled the S.A.C. Capital hedge fund that Lee managed to generate more than $350,000 in illegal profits. Lee also traded in his personal securities account on the nonpublic information he received from Aggarwal. The final judgment enjoins Aggarwal from future violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder... Read More

Penalties: N/A
Respondent: Mark Nicholas Pyatt, Winston Reed Investments LLC, and Daniel Gregory Randolph
Violation: "Defendants Pyatt and Winston Reed have engaged in, and unless restrained and enjoined by this Court, will continue to engage in acts and practices that constitute and will constitute violations of  the antifraud provisions of Section 17(a) of the Securities Act of 1933 (""Securities Act""), Section 10(b) of the Securities Exchange Act of 1934 (""Exchange Act""), and Rules lOb-5 adopted thereunder [15 U.S.C. §§ 77q(a), 78j(b), and 17 C.F.R. § 240.1Ob-5].
"... Read More

Penalties: $42,720.00
Respondent: "Jon L. Aronson and Elliet N. Aronson"
Violation: The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Jon L. Aronson, of Massachusetts, learned through his employment that AIG was negotiating an acquisition of Validus Holdings, Ltd., an insurance company. According to the complaint, based on this information Jon Aronson purchased Validus shares and tipped his father, Elliet N. Aronson of Massachusetts, who also purchased shares. The complaint further alleges that Jon Aronson sold his shares and advised his father to do the same before the acquisition was announced, but Elliet Aronson opted to continue holding his shares, profiting $20,310 from his sales after the announcement... Read More

Penalties: $1,144,408.29
Respondent: "Kit Mun Chan, Lau Kean Chong, Chong Poui Fan, Binji Lu, and Youn Chien Wong"
Violation: The SEC's complaint, filed on June 19, 2019, alleged that the defendants-traders from China, Singapore, and Malaysia-attempted to manipulate the market for MDDT stock by entering matched orders to buy and sell MMDT at substantially the same times, sizes, and prices. The SEC alleged that trades involving these five seemingly unrelated individuals from three different countries accounted for 70% of the volume in MDDT over the period in which they traded. As described in the complaint, IP records show that at least three of the defendants' brokerage accounts were likely accessed by the same user or users while trading MDDT... Read More

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