Financial Enforcement Actions | Week of July 13 to July 19
Respondent: Carz2go Ltd
CL has failed to comply with the regulatory requirement to submit the Return. CL has not been open and co-operative in all its dealings with the Authority, in that CL has failed to respond adequately to the Authority's repeated requests for it to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that it is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More
Respondent: Gerber Products Co., d/b/a Nestlé Nutrition, et al.
Violation: Gerber Products Co. deceptively advertised that feeding its Good Start Gentle formula to infants with a family history of allergies prevents or reduces the risk that they will develop allergies. The FTC also alleged that Gerber falsely advertised Good Start Gentle’s health claims as FDA-approved... Read More
Respondent: Life at Parliament View Ltd
Violation: LPVL failed to take appropriate technical and organisational measures against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data in contravention of the Seventh Data Protection Principle at Part I of Schedule 1 to the DPA... Read More
Respondent: Robert Juan Escobio
Violation: From March 2019 to the present, Respondent Robert Juan Escobio has repeatedly failed to provide information and documents requested by FINRA Staff pursuant to FINRA Rule 8210 in an investigation involving whether Escobio continued to associate with a FINRA member firm while he was statutorily disqualified... Read More
Respondent: Thomas John Marino
Violation: In connection with FINRA's investiption into Marino's possible misuse of funds from a senior customer FINItA staff issued Marino a request to provide documents and information pursuant to FINRA Rule 8210 Marino refused to provide the documents and information... Read More
Respondent: Craig Stanton Norton, Byron Bert Barkley, Lyle Wesley Davis, James C. Snow, Jr. and Wilson-Davis & Co.
Violation: From late February 2015 through June 2015, Wilson-Davis & Co., Inc. ("WilsonDavis" or "the firm") and its registered representative, Craig Norton, manipulated the market for a low-priced, thinly traded, over-the-counter ("OTC") microcap security issued by NuGene International Inc. ("NuGene" or "NUGN")... Read More
Respondent: Park Avenue Securities LLC
Violation: Between January 1, 2011 and August 31, 2018 (the "Relevant Period"), PAS disadvantaged certain retirement plan and charitable organization customers who were eligible to purchase Class A shares in certain mutual funds without a frontend sales charge ("Eligible Customers"). These Eligible Customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses... Read More
Respondent: David Wilson Fleming
Violation: Between December 2012 and July 2014, while registered with a FINRA member firm, Fleming borrowed $35,000 from a customer without providing prior notice to, and receiving pre-approval from, his member firm. He thereby violated FINRA Rules 3240 and 2010... Read More
Respondent: Cindy Maria Fuzie
Violation: Between 2014 and 2017, Fuzie submitted for reimbursement certain meal receipts and related expense reports in which she falsely represented that clients or prospective clients had attended those meals, when in fact they had not. By this conduct, Fuzie violated FINRA Rule 2010... Read More
Respondent: Samuel K. Van Allen
Violation: In anticipation of leaving Westport, Van Allen improperly removed nonpublic personal customer information from Westport, without Westport's or the customers' knowledge or consent. As a result, Van Allen violated FINRA Rule 2010 and caused Westport to violate the SEC's Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information ("Regulation S-P")... Read More
Respondent: Western International Securities, Inc.
Violation: Between January 1, 2011, and January 1, 2017, (the "Relevant Period"), Western disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a frontend sales charge ("Eligible Customers")... Read More
Respondent: Eric Savell
Violation: In July 2016, Savell told a customer about a startup called Company X, informed the customer that he had provided advice to the company and knew its chief executive officer( "CEO"), and arranged a meeting between the customer and Company X's CEO for the purpose of facilitating a potential investment... Read More
Respondent: Robert G. Nash and Merrimac Corporate Securities, Inc.
Violation: Merrimac Corporate Securities (“Merrimac”), a broker-dealer and FINRA member firm, and Robert G. Nash, Merrimac’s Chief Compliance Officer (“CCO”) and one of its general securities principals, appeal from a FINRA disciplinary action... Read More
Violation: On March 14, 2018, the SEC charged Jun Ying with insider trading in connection with a September 2017 data breach announcement by Equifax disclosing that the company had been hacked, thereby exposing the personal information of about 148 million U.S. customers. The SEC's complaint alleged that based on confidential information entrusted to him by Equifax, Ying exercised all his vested Equifax stock options and then sold the shares ahead of the announcement. As a result of his timely sales, Yang allegedly avoided losses of more than $117,000. In a parallel criminal case, Ying pled guilty and was sentenced to four months in prison and ordered to pay forfeiture of $117,117... Read More
Respondent: SPRING HILL CAPITAL MARKETS, LLC, et al.
Violation: Between January 22 and February 26, 2010, SHCP generated no less than $460,803.84 in trading revenue as an unregistered broker-dealer. Additionally, in March 2010, SHCM failed to submit a trade ticket from its introducing broker, Company A, which caused Company A’s books and records to be inaccurate. SHCM’s trading blotter also contained incorrect trade dates that obscured trades it had executed without a customer order for the transaction. These trades resulted in SHCM having a net capital deficiency in violation of Section 15(c)(3) of the Exchange Act... Read More
Respondent: SWAPNIL REGE
Violation: This matter involves Respondent Rege’s mispricing of investments for a private fund for which he served as a portfolio manager, resulting in artificially inflated fund profits, an overstatement of the fund’s monthly net asset value in periodic statements to fund investors, and the charging of excess management fees to the fund. Rege also engaged in certain deceptive acts to cover up his mispricing. The mispricing resulted in Rege receiving $600,000 in excess compensation from his employer, which was the adviser to the fund (the “Fund Adviser”)... Read More
Respondent: Conn's Inc. ; Michael J. Poppe
Violation: From at least the second quarter of fiscal 2013 through the second quarter of fiscal 2015, Conn's and its COO, Michael J. Poppe, a Texas resident, understated the company's allowance for bad debts and overstated income on its financial statements through improper accounting practices. Conn's allegedly increased the risk to its credit portfolio by lending to customers with poor or no credit histories. However, Conn's failed to incorporate this information into the company's forecasting model, which caused its bad debt expense to be understated and its income to be overstated. Additionally, Conn's allegedly used a "roll rate" model to forecast its allowance for bad debts that included management bias... Read More
Respondent: Carol J. Wayland, et al.
Violation: From at least May 2014 until March 2016, defendant Kentucky-Tennessee 50 Wells/400 BBLPD Block, Limited Partnership (KT 50) fraudulently offered and sold unregistered securities to investors using a boiler room operation, raising approximately $2.4 million from 41 investors nationwide. __V__Carol J. Wayland of Newport Beach, California founded and operated KT 50 and conducted the offering through HP Operations, LLC (HP) and C.A.R. Leasing, LLC (C.A.R.)... Read More
Respondent: NOMURA SECURITIES INTERNATIONAL, INC.
Violation: Nomura failed reasonably to supervise two traders so as to prevent and detect their violations of antifraud provisions of the federal securities laws in connection with Nomura’s secondary market purchases and sales of non-agency commercial mortgage backed securities (“CMBS”) from approximately February 2010 through April 2014 (“relevant period”). On numerous occasions during the relevant period, two traders on Nomura’s CMBS desk deliberately misled or lied to customers about, among other things, (i) the prices at which Nomura had bought or sold the securities... Read More
Respondent: Zev Saltsman, et al.
Violation: Eitan and Saltsman controlled an Israeli investor group that participated in a fraudulent scheme to purchase controlling blocks of stock in two publicly traded companies - Xybernaut Corp. and Ramp Corp. - while misleading the investing public as to the true ownership of the companies' shares. To facilitate the scheme, Eitan and Saltsman allegedly paid kickbacks to the companies' officers and directors in exchange for access to future transactions with favorable terms. Saltsman and Eitan also allegedly sold unregistered shares of the two companies and failed to file ownership reports... Read More
Respondent: Visium Asset Management
Violation: From at least July 2011 to December 2012, Visium, through two of its portfolio managers, engaged in a mismarking scheme, using sham broker quotes to falsely inflate the value of securities held by the Credit Fund, for which Visium acted as investment adviser. As a result, the Credit Fund reported falsely inflated returns, overstated its net asset value (“NAV”), misclassified certain distressed assets, and overpaid performance and management fees... Read More
Respondent: NOMURA SECURITIES INTERNATIONAL, INC.
Violation: Nomura failed reasonably to supervise three Nomura traders to prevent and detect their violations of the antifraud provisions of the federal securities laws in connection with Nomura’s secondary market transactions in non-agency residential mortgage-backed securities (“RMBS”) and manufactured housing asset-backed securities (“MHABS”) (collectively referred to as “RMBS”) from approximately January 2010 through November 2013 (“the Relevant Period”)... Read More
Respondent: AR Capital, LLC, et al.
Violation: Between late 2012 and early 2014, AR Capital arranged for American Realty Capital Properties Inc. (ARCP), a publicly-traded REIT, to merge with two publiclyheld, non-traded REITs... Read More