Financial Enforcement Actions | Week of Jan 13 to Jan 18

SEC

3 Enforcement Documents

$0.00 in Fines

Penalties: TBD
Respondent: LBB & Associates Ltd., LLP and Carlos Lopez, CPA
Violation: For annual audits of years 2012, 2013 and 2014, Respondents engaged in a pattern of improper professional conduct as auditors. Specifically, Respondents failed to comply with Public Company Accounting Oversight Board (“PCAOB”) standards in their audit of Behavioral Recognition Systems, Inc. (now known as Giant Gray, Inc.) (“BRS”) for fiscal year 2012 and in their engagement quality reviews (“EQR”) of the 2013 and 2014 fiscal year audits. Lopez, LBB’s managing partner and majority owner, served as LBB’s engagement partner for the 2012 audit and as its EQR partner for the 2013 and 2014 audits… Read More

Penalties: TBD
Respondent: SEC Complaint – Oleksandr Ieremenko, Sungjin Cho, David Kwon, Igor Sabodakha, Victoria Vorochek, Ivan Olefir, Andrey Sarafanov, Capyield Systems Ltd., Spirit Trade Ltd.
Violation: This action arises from a fraudulent scheme to hack into the SEC’s online Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system to obtain nonpublic documents containing earnings announcements of publicly-traded companies, and to then use that information to profit by trading in advance of the information becoming public. The scheme was the second part of a long-term effort, the first phase of which targeted at least three newswire services… Read More

Penalties: TBD
Respondent: Oleksandr Ieremenko, Sungjin Cho, David Kwon, Igor Sabodakha, Victoria Vorochek, Ivan Olefir, Andrey Sarafanov, Capyield Systems Ltd., Spirit Trade Ltd.
Violation: After hacking the newswire services, Ukrainian hacker Oleksandr Ieremenko turned his attention to EDGAR and, using deceptive hacking techniques, gained access in 2016. Ieremenko extracted EDGAR files containing nonpublic earnings results. The information was passed to individuals who used it to trade in the narrow window between when the files were extracted from SEC systems and when the companies released the information to the public. In total, the traders traded before at least 157 earnings releases from May to October 2016 and generated at least $4.1 million in illegal profits…. Read More

FINRA

3 Enforcement Documents

$261,773.88 in Fines

Penalties: $20,000.00
Respondent: Advisory Group Equity Services Ltd.
Violation: AGES failed to establish and maintain a reasonable supervisory system with respect to the retention and review of emails of those representatives. As a result, AGES violated Section 17(a) of the Securities Exchange Act of 1934 (“Exchange Act”), Rule 17a-4 of the Exchange Act, and FINRA Rules 3110, 4511, and 2010… Read More

Penalties: $241,773.88
Respondent: Christine Cantone, Anthony Cantone and Cantone Research, Inc.
Violation: Member firm and its president intentionally made material omissions and a misrepresentation in connection with the sale of securities in a series of private placements, and negligently made additional material omissions in connection with the sales of securities. In addition, member firm, through its chief compliance officer, failed to supervise the firm president in connection with the private placements… Read More

Penalties: N/A
Respondent: Jay R. Weiser
Violation: In December 2018, Weiser violated FINRA Rules 8210 and 2010 by failing to cooperate with F1NRA’s requests for documents and for on-the-record testimony, sent to him pursuant to FINRA Rule 8210… Read More

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