Financial Enforcement Actions | Week of January 11 to January 17
Respondent: Mirae Asset Daewoo Co., Ltd.
Violation: Engaged in the disruptive trading practice of “spoofing” (i.e., bidding or offering with the intent to cancel the bid or offer before execution) in the E-mini S&P 500 Index futures contract (the “E-Mini”) traded on the Chicago Mercantile Exchange (“CME”), a designated contract market owned and operated by CME Group Inc. The disruptive trading violated Section 4c(a)(5)(C) of the Act, 7 U.S.C. § 6c(a)(5)(C) (2012)… Read More
Respondent: Paul William Petrillo
Violation: From August 2013 through April 2, 2017, Petrillo placed 333 discretionary orders to purchase or sell securities in twelve customer accounts away from Thrivent without notifying the Firm or the executing firm of his relationship to the other… Read More
Respondent: Albert Foronda
Violation: From March 2017 through August 2017, while associated through Warden, and in December 2017, while associated through Spartan, Foronda effected transactions in accounts of two customers using discretion without written authorization from the customers and without the member firms accepting the accounts as discretionary, in violation of NASD Rule 2510(b) and FINRA Rule 2010… Read More
Respondent: Aaron F. Sheehy
Violation: Between September 2017 and November 2017, Sheehy violated NASD Rule 2510(b) and FINRA Rule 2010 by exercising discretion without written authorization by accepting instructions from an unauthorized third party to place trades in a customer’s account… Read More
Respondent: Andrew Grant
Violation: From January 1, 2018 through April 30, 2019, while associated with Laidlaw, Grant effected 634 trades in 13 customer accounts using discretion without the customers’ prior written authorization and without the Firm accepting these accounts as discretionary in writing. Based on the foregoing, Grant violated NASD Rule 2510(b) and FINRA Rule 2010… Read More
Respondent: Royal Alliance Associates, Inc.
Violation: Some of the transfers were made in violation of firm policies and procedures for third-party payments, which the firm failed to enforce, and in some instances the transfers were also accompanied by red flags to which the firm failed to reasonably respond. By virtue of the foregoing, Royal Alliance violated NASD Rules 3010 and 3012(a)(2) and FINRA Rules 3110, 3110(c)(2), and 2010… Read More
Respondent: Wedbush Securities Inc.
Violation: During the period March 31, 2016 through October 14, 2016 (the review period), Respondent misreported its short positions in equity securities, which must be reported pursuant to FINRA Rule 4560… Read More
Respondent: Citigroup Global Markets Inc.
Violation: Between June 2012 and November 2016, Citigroup failed to establish, maintain and enforce a supervisory system, including supervisory procedures, with respect to SEC Rule 201(b) of Regulation SHO, SEC Rule 203(b)(1) of Regulation SHO, and accurate short sale transaction reporting… Read More
Respondent: Prudential Investment Management Services LLC.
Violation: From at least October 2003 to December 2018, PIMS provided inaccurate third-party ratings for investment options in retirement plan Group VAs. PIMS made these misstatements in nine different types of communications, including customer statements and quarterly fact sheets… Read More
Respondent: Jason C. LaBelle
Violation: LaBelle failed to provide prior written notice to LPL of his participation in the project. As a result, he violated FINRA Rules 3270 and 2010… Read More
Respondent: Rene Moses Torres, Jr.
Violation: Respondent failed to timely amend his Uniform Application for Securities Industry Registration arrested, charged, and taken into police custody on July 18, 2018 but did not disclose the charges to the Firm until November 28, 2018, more than three months after he was required to do so… Read More
Respondent: Julian E. Munoz
Violation: At the end of June 2010, Munoz borrowed $30,000 from his Firm customer without providing prior notice to, or obtaining prior written approval from the Firm, in violation of FINRA Rules 3240 and 2010… Read More
Respondent: Citibank, N.A.
Violation: Since at least 2014, the Bank failed to force place insurance in a timely manner on residential Designated Loans and engaged in a pattern or practice of violations of the Flood Act and its implementing regulations, including 12 C.F.R. § 22.7(a) (Force placement of flood insurance)… Read More
Respondent: Daniel Markel
Violation: Markel failed to disclose to investors that, from March 2015 to at least March 2016, MyLife was using Implants that had been compounded in and exported from China, in violation of certain Food and Drug Administration (“FDA”)regulations. The omission of this information rendered prior representations Markel made to investors regarding the viability of MyLife’s business model materially misleading.Markel acted with negligence by failing to disclose this material fact to investors, thus violating Sections 17(a)(2) and 17(a)(3) of the Securities Act. Markel violated the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act… Read More
Respondent: Hill International Inc
Violation: This action concerns accounting fraud and disclosure violations at Hill arising from repeated reporting errors and a failure to maintain accurate books and records. This misconduct led Hill to issue materially false and misleading financial statements from
approximately May 2014 to March 2017… Read More
Respondent: Thomas Troy Brooks
Violation: From at least June 2016 through February 2018, Thomas Troy Brooks (“Defendant”) solicited investors throughout the United States to purchase the securities of numerous microcap companies whose shares traded on the over-the-counter (“OTC”) market… Read More
Respondent: “Todays Growth Consultant Inc. and Kenneth D. Courtright, III”
Violation: The SEC’s complaint, filed in federal court in Chicago on Dec. 27, 2019, and unsealed on Jan. 14, 2020, charges Courtright and TGC with violations of the antifraud and registration provisions of the federal securities laws, and seeks certain emergency relief as well as permanent injunctions, return of ill-gotten gains with prejudgment interest, and civil penalties. The Securities and Exchange Commission announced that it filed an emergency enforcement action and obtained a temporary restraining order and asset freeze against Illinois resident Kenneth D. Courtright, III and his company, Todays Growth Consultant Inc., in connection with an alleged Ponzilike scheme that raised at least $75 million from more than 500 investors throughout the United States and abroad… Read More
Respondent: Great Basin Scientific, Inc.
Violation: “The Securities and Exchange Commission (“Commission”) deems it necessary and
appropriate for the protection of investors that public administrative proceedings be, and hereby are, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”) against the respondent named in the caption (“Respondent”)… Read More
Respondent: Sea Breeze Power Corp. et al
Violation: Sea Breeze Power 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 December 31, 2005.Pursuant to Section 12(j) of the Exchange Act, the registration of each class of Respondent’s securities registered pursuant to Exchange Act Section 12 be, and hereby is, revoked. The revocation is effective as of January 15, 2020… Read More
Respondent: Kamilla Bjorlin, Andrew Hodge, and Brian Nichols
Violation: “Bjorlin is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5, by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security: (i) to employ any device, scheme, or artifice to defraud; (ii) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or (iii) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person”… Read More
Respondent: “Diane D. Dalmy et al.,”
Violation: According to the SEC’s complaint, Dalmy had been placed on the prohibited attorneys list maintained by OTC Markets Group, Inc., which owns and operates the largest U.S. electronic quotation and trading system for microcap securities. To evade this prohibition, Dalmy allegedly recruited Michael J. Woodford, a retired divorce lawyer, to sign legal opinion letters drafted by Dalmy. Without performing due diligence or conducting any legal analysis, Woodford provided the opinion letters to transfer agents and brokerage firms… Read More
Respondent: “Lidingo Holdings, LLC”
Violation: According to the SEC’s complaint, Bjorlin and Hodge hired writers like Nichols to publish hundreds of bullish articles on behalf of clients of Lidingo Holdings. The articles appeared to be independent research pieces but, in fact, were paid advertisements… Read More
Respondent: Diane D. Dalmy, and Michael J. Woodford
Violation: “IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Dalmy is permanently restrained and enjoined from directly or indirectly providing professional legal services to any person or entity in connection with the offer or sale of securities pursuant to, or claiming, an exemption under Section 4(a)(1) of the Securities Act [15 U.S.C. §77d(a)(1)] predicated on Securities Act Rule 144 [17 C.F.R. §230.144], or any other exemption from the registration provisions of the Securities Act; and that Dalmy is required to provide any actual or potential client seeking legal advice or representation in matters relating to the federal securities laws with copies of (i) the Commission’s complaint filed against her and the court’s final judgment issued against her in both this action and in SEC v. Zenergy Int’l, Inc., Case No. 1:13- cv-05511 (N.D. Ill. Sept. 30, 2015), and (ii) the Commission’s order permanently disqualifying her from practicing before it as an attorney, which was entered in Matter of Diane D. Dalmy, “… Read More
Respondent: “Robert O. Carr and Katherine M. Hanratty”
Violation: According to the SEC’s complaint, filed on July 10, 2018, Carr provided his longtime girlfriend, Katherine M. Hanratty, with confidential information about a potential acquisition of Heartland by another payment processing company. As alleged, in the weeks leading up to the merger announcement, Carr gave Hanratty $1 million to open a brokerage account, which she used to purchase Heartland stock. The complaint alleged that Hanratty opened the account with Carr’s knowledge, made Carr the beneficiary of the account, and purchased more than 11,000 shares of Heartland stock. After the merger was announced, Heartland’s stock price rose substantially, and Hanratty sought Carr’s advice about when to sell the stock. Hanratty ultimately liquidated her entire position in a single day, for profits of more than $250,000… Read More
Respondent: Michael B. Rothenberg
Violation: “The SEC’s complaint, filed in August 2018 in San Francisco, California, alleged that Rothenberg marketed his advisory firm, Rothenberg Ventures LLC, as uniquely positioned to identify millennial entrepreneurs and invest in “”frontier technology”” companies. Rothenberg and his firm allegedly misappropriated millions of dollars from the firm’s funds, which Rothenberg used to support personal business ventures he claimed were self-funded and to pay for private parties and events at high-end resorts and Bay Area sporting arenas.”… Read More