Financial Enforcement Actions | Week of Feb 24 to Mar 01

Weekly Enforcement Action Tracker

UK-FCA

9 Enforcement Documents

£0.00 in Fines

Penalties: N/A
Respondent: Jake Aughton
Violation: It appears to the Authority that Mr. Aughton is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that Mr. Aughton is a fit and proper person having regard to all the circumstances, including whether Mr. Aughton managed his business in such a way as to ensure that his affairs were conducted in a sound and prudent manner… Read More

Penalties: N/A
Respondent: Gary Peacock
Violation: It appears to the Authority that Mr. Peacock is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that Mr. Peacock is a fit and proper person having regard to all the circumstances, including whether Mr. Peacock managed his business in such a way as to ensure that his affairs were conducted in a sound and prudent manner… Read More

Penalties: N/A
Respondent: London Health And Wellness Ltd
Violation: It appears to the Authority that LHWL is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that LHWL is a fit and proper person having regard to all the circumstances, including whether LHWL 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: Darren Clegg
Violation: It appears to the Authority that Mr. Clegg is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that Mr. Clegg is a fit and proper person having regard to all the circumstances, including whether Mr. Clegg managed his business in such a way as to ensure that his affairs were conducted in a sound and prudent manner… Read More

Penalties: N/A
Respondent: Top Car Leasing Limited
Violation: It appears to the Authority that TCLL is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that TCLL is a fit and proper person having regard to all the circumstances, including whether TCLL 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: Mr. Shahidur Rahman Chowdhury
Violation: It appears to the Authority that Mr. Chowdhury is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that Mr. Chowdhury is a fit and proper person having regard to all the circumstances, including whether Mr. Chowdhury managed his business in such a way as to ensure that his affairs were conducted in a sound and prudent manner… Read More

Penalties: N/A
Respondent: Mr. Gary Nuttall
Violation: It appears to the Authority that Mr. Nuttall is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that Mr. Nuttall is a fit and proper person having regard to all the circumstances, including whether Mr. Nuttall managed his business in such a way as to ensure that his affairs were conducted in a sound and prudent manner… Read More

Penalties: N/A
Respondent: Premier Car Sales NW Ltd
Violation: It appears to the Authority that PCSNL is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that PCSNL is a fit and proper person having regard to all the circumstances, including whether PCSNL 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: Douglas Eynon
Violation: It appears to the Authority that Mr. Eynon is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that Mr. Eynon is a fit and proper person having regard to all the circumstances, including whether Mr. Eynon managed his business in such a way as to ensure that his affairs were conducted in a sound and prudent manner… Read More

FINRA

3 Enforcement Documents

$22,500.00 in Fines

Penalties: $15,000.00
Respondent: Barry R. Block
Violation: During the period from January 2017 to March 2017, in connection with eight variable annuity transactions involving five customers, Block negligently misrepresented the investment expenses when recommending variable annuity exchanges to his customers. Thus, he violated FINRA Rule 2010. In addition, in connection with two of these customers, Block also altered disclosure documents involving four transactions after they were signed by the customers, and failed to maintain originals or copies of the signed disclosure forms. As a result, Block violated FINRA Rules 4511 and 2010… Read More

Penalties: TBD
Respondent: James Bradley Schwartz
Violation: Schwartz conducted his fraudulent and deceptive trading by exercising de facto control over FP, KK, MN and DN’s accounts and engaging in unauthorized trading. Indeed, Department of Enforcement, Complainant, v. James Bradley Schwartz, (CRD NO. 3043085) Respondent. 2 during the Relevant Period, Schwartz executed 261 trades with a total principal value of approximately $10 million without his customers’ authorization, including unauthorized trades Schwartz executed in his customer DP’s account after DP had died… Read More

Penalties: $7,500.00
Respondent: Emanuel Omar Avina (“Avina”)
Violation: Between January and June 2017 (the “Relevant Period”), while associated with a FINRA member, Avina impersonated six Ameriprise customers during eight telephone calls made to Ameriprise’s customer service center. During the phone calls, Avina acted as the customers for the purposes of liquidating securities, transferring money, obtaining account information, and requesting copies of checks. Avina carried out all of the impersonations in order to facilitate underlying transactions and requests that the customers had authorized and wanted executed. By impersonating six customers, Avina violated FINRA Rule 2010… Read More

SEC

22 Enforcement Documents

$5,325,041.26 in Fines

Penalties: $3,983,661.51
Respondent: Fifth Street Management, LLC
Violation: The Commission found that in 2013 and 2014, the Respondent made improper allocations to its former business development company (“BDC”) clients and failed in the valuation of two portfolio company investment held by one of the BDCs… Read More

Penalties: N/A
Respondent: Paul Katsaros
Violation: From in or about 2011 through in or about January 2013, Katsaros knowingly and fraudulently made a false oath and account in relation to a case under Title 11, and a false declaration, certificate, verification and statement under penalty of perjury in relation to a case under Title 11, to wit, submitting an affidavit containing a false statement and testifying falsely at a deposition… Read More

Penalties: TBD
Respondent: SEC Complaint – Jack D. Massimino and Robert C. Owen
Violation: Corinthian had inflated its long-term debt immediately before its fiscal year-end on June 30, 2011, and then repaid those loans immediately after the next fiscal year started… Read More

Penalties: $100,000.00
Respondent: Jack D. Massimino and Robert C. Owen
Violation: Under the direction of former CEO Jack D. Massimino and former CFO Robert C. Owen, Corinthian disclosed the DOE’s finding in Commission reports filed in August and September 2013… Read More

Penalties: TBD
Respondent: SEC Complaint – Castleberry Financial Services Group, LLC, et al.
Violation: Castleberry falsely represented to investors that it had hundreds of millions of dollars in capital invested in local businesses and a portfolio of hundreds of real estate properties that generated millions of dollars in revenue annually. In truth, Castleberry never had millions of dollars invested in businesses or real estate and never derived significant revenue from investments… Read More

Penalties: $50,000.00
Respondent: Mark E. Kuchenrither
Violation: In revising the company’s fiscal year earnings projections, Kuchenrither failed to comply with standard of care for someone in his position in a variety of respects… Read More

Penalties: TBD
Respondent: Castleberry Financial Services Group, LLC, et al.
Violation: Castleberry falsely represented to investors it had hundreds of millions of dollars in capital invested in local businesses and a portfolio of hundreds of investment properties. Castleberry claimed to offer high yields while protecting investors’ principal by having it “fully insured and bonded” by CNA Financial Corp. and Chubb Group, when the insurance companies had no relationship with Castleberry and did not authorize it to use their logos in Castleberry’s sales materials… Read More

Penalties: N/A
Respondent: Stark Naked Bobbers and TOA Holdings, Inc.
Violation: Accordingly, notice is hereby given, pursuant to Rule 360(d) of the Commission’s Rules of Practice, that the initial decision of the administrative law judge has become the final decision of the Commission with respect to Stark Naked Bobbers and TOA Holdings, Inc… Read More

Penalties: N/A
Respondent: MarilynJean Interactive Inc.
Violation: Accordingly, notice is hereby given, pursuant to Rule 360(d) of the Commission’s Rules of Practice, that the initial decision of the administrative law judge has become the final decision of the Commission with respect to MarilynJean Interactive Inc… Read More

Penalties: N/A
Respondent: Elon Musk
Violation: The Securities and Exchange Commission announced that on February 25, 2019, it filed a motion for an order to show cause why Elon Musk, CEO of Silicon Valley-based Tesla, Inc., should not be held in contempt for violating the terms of the Court’s October 16, 2018 Final Judgment which required, among other things, Musk to obtain pre-approval of any written communications that contain, or reasonably could contain, information material to Tesla or its shareholders… Read More

Penalties: N/A
Respondent: Michael Scronic
Violation: Scronic made material misrepresentations to potential investors and investors in order to solicit new or additional investments in his fictitious hedge fund, Scronic Macro Fund. Despite sustaining massive investment losses and misappropriating money to fund his extravagant lifestyle, Scronic represented to investors their investments had seen substantial gains… Read More

Penalties: $51,387.27
Respondent: DLL CPAS, LLC and Debra Lee Lindaman, CPA
Violation: This matter concerns securities violations by Lindaman and her audit firm, DLL, in conducting deficient audits and interim reviews of five public company clients in violation of the Public Company Accounting Oversight Board’s (“PCAOB”) Auditing Standards and Regulation S-X. Lindaman’s audits and reviews for the five issuer clients involved numerous audit deficiencies including, among other things, the failure to obtain sufficient appropriate audit evidence, maintain audit documentation, reconcile underlying accounting records to the issuers’ financial statements or footnotes, and perform adequate reviews of interim financial information… Read More

Penalties: $1,134,964.00
Respondent: John Gregory Schmidt
Violation: Schmidt sold securities belonging to at least seven of his retail brokerage customers and secretly transferred over $1 million in proceeds to at least ten other customers to cover shortfalls in the customers’ accounts… Read More

Penalties: $5,028.48
Respondent: Arthur Viola
Violation: Lindaman’s audits were so deficient that they could not be relied upon to verify the accuracy of the financial statements she audited. Viola, who conducted the EQRs on these audits, did not conduct his reviews pursuant to PCAOB standards. As a result, Viola’s EQRs of Lindaman’s audits and reviews were deficient… Read More

FTC

5 Enforcement Documents

$12,850,000.00 in Fines

Financial Enforcement Actions Feb 24 to Mar 01

Penalties: $12,850,000.00
Respondent: Cure Encapsulations, Inc.
Violation: The defendants paid a website, amazonverifiedreviews.com, to create and post Amazon reviews of their product. The FTC contends that Jacobowitz told the website’s operator that his product needed to have an average rating of 4.3 out of 5 stars in order to have sales and to, “Please make my product … stay a five star”… Read More

Penalties: TBD
Respondent: F9 Advertising LLC
Violation: Gopalkrishna Pai and eight companies he owns and operates acted as a common enterprise, selling skin care products online from at least February 2016 through August 2017. The products, which the defendants sold in pairs on a series of websites, included Vita Luminance and Regenelift, Derma Vibrance and Nuevoderm, Revived Youth Cream and Revived Youth Serum, and Aura Youth Cream and Aura Youth Serum… Read More

Penalties: TBD
Respondent: Watson Pharmaceuticals, Inc., et al.
Violation: Watson and Par, via its partner Paddock Laboratories, each sought regulatory approval from the FDA to market generic versions of AndroGel. In their FDA filings, both companies certified that their products did not infringe the only patent Solvay had relating to AndroGel, and that the patent was invalid. The complaint charges that Solvay agreed to pay the generic companies to abandon their patent challenges and agree not to bring a generic AndroGel product to market for nine years, until 2015… Read More

Penalties: TBD
Respondent: Musical.ly, Inc.
Violation: Musical.ly violated the Children’s Online Privacy Protection Act (COPPA), which requires that websites and online services directed to children obtain parental consent before collecting personal information from children under the age of 13… Read More

Penalties: TBD
Respondent: Worldwide Executive Job Search Solutions, LLC
Violation: Worldwide Executive Job Search Solutions, LLC, PrivateEquityHeadhunters.com, and their owner, Craig Chrest, sent consumers unsolicited messages through well-known business networking websites, like LinkedIn, falsely claiming to have exclusive relationships with hundreds of private equity and venture capital firms, and telling consumers they were candidates for unadvertised, highly paid executive positions with these firms… Read More

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