Financial Enforcement Actions | Week of July 27 to August 02

Financial-Enforcement-Actions-Week-of-July-27-to-August-02

Financial-Enforcement-Actions-Week-of-July-27-to-August-02

FTC

4 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Madera Merchant Services, LLC., B&P Enterprises, LLC., Bruce C. Woods., Patricia Woods., Victor Rodriguez
Violation: The companies generated and processed remotely created payment orders (RCPOs) or checks that allowed many
unscrupulous merchants, including deceptive telemarketing schemes, to withdraw money from their victims’ bank
accounts… Read More

Penalties: N/A
Respondent: Educare Centre Services, Inc., Tripletel, Inc., Prolink Vision, S.R.L., Sam Madi., Mohammad Souheil a/k/ a Mohammed Souheil and Mike Souheil., Wissam Abedel Jilal a/k/ a Sam Jilal, Charles Kharouf
Violation: Award Plaintiffs such relief as the Court finds necessary to redress injury to consumers resulting from Defendants’ violations of the FTC Act, the TSR, the Ohio CSP A, and the Ohio TSSA, including rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies… Read More

Penalties: N/A
Respondent: RAG-Stiftung; Evonik Industries AG; Evonik Corporation; Evonik International Holding B.V.; One Equity Partners Secondary Fund L.P.; One Equity Partners V L.P.; Lexington Capital Partners VII (AIV I), L.P.; PeroxyChem Holding Company LLC; PeroxyChem Holdings, L.P.; PeroxyChem Holdings LLC; PeroxyChem LLC; and PeroxyChem Cooperatief U.A.
Violation: This is an action to temporarily restrain and preliminarily enjoin the consummation of an anticompetitive Acquisition of PeroxyChem by Evonik, two of only five hydrogen peroxide producers in North America. Hydrogen peroxide is a commodity chemical used for oxidation, sterilization, and bleaching, and for most end uses, there are no effective substitutes. Hydrogen peroxide producers sell to customers in various industries, including pulp and paper, food packaging, agriculture, chemical synthesis, mining and gas, and personal care… Read More

UK-FCA

8 Enforcement Documents

£2,500.00 in Fines

Penalties: N/A
Respondent: CTS101 Ltd
Violation: 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

Penalties: N/A
Respondent: Robert Lea Newell
Violation: This is because Mr Newell has failed to comply with the regulatory requirement to submit the Return. Mr Newell has not been open and co-operative in all his dealings with the Authority, in that Mr Newell has failed to respond adequately to the Authority’s repeated requests for him 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 he is ready, willing and organised to comply with the requirements and standards under the regulatory system… Read More

Penalties: £2,500.00
Respondent: Transway Ltd
Violation: Transway, failed to disclose to the Authority matters material to the Authority’s assessment of his fitness and propriety, and good repute, as the sole director and shareholder of Transway. As a small payment institution registered under the Payment Services Regulations 2009 (the “PSRs 2009”), Transway had an obligation to notify the Authority of any significant change in circumstances relevant to its fulfilment of the conditions for registration… Read More

Penalties: N/A
Respondent: AMG Specs Limited
Violation: ASL has failed to comply with the regulatory requirement to submit the Return. ASL has not been open and co-operative in all its dealings with the Authority, in that ASL 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

Penalties: N/A
Respondent: WGV Holdings Ltd
Violation: WHL has failed to comply with the regulatory requirement to submit the Return. WHL has not been open and co-operative in all its dealings with the Authority, in that WHL 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

Penalties: N/A
Respondent: Tradecenter Warrington Ltd
Violation: TWL has failed to comply with the regulatory requirement to submit the Return. TWL has not been open and co-operative in all its dealings with the Authority, in that TWL 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

Penalties: N/A
Respondent: Ewloe Hall Motors Limited
Violation: EHML has failed to comply with the regulatory requirement to submit the Return. EHML has not been open and co-operative in all its dealings with the Authority, in that EHML 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

SEC

32 Enforcement Documents

$650,722.63 in Fines

Penalties: N/A
Respondent: American Business Services, Inc., Iris Biotechnologies, Inc. and Soul & Vibe Interactive Inc.
Violation: ABSR is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the period ended June 30, 2016, which reported a net loss of $49,136 for the prior six months. As of July 22, 2019, the common stock of ABSR was quoted on OTC Link operated by OTC Markets Group Inc. (formerly “Pink Sheets”) (“OTC Link”), had three market makers and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3)… Read More

Penalties: N/A
Respondent: Axiom Corp., Smartchase Corp., and Veracity Management Global, Inc. n/k/a Santa Fe Resource Development, Inc.
Violation: AXMM is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the period ended March 31, 2016, which reported a net loss and comprehensive loss attributable to AXMM of $244,274 for the prior three months. As of July 22, 2019, the common stock of AXMM was quoted on OTC Link operated by OTC Markets Group Inc. (formerly “Pink Sheets”) (“OTC Link”), had six market makers and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3)… Read More

Penalties: $485,988.45
Respondent: Kendall J. Groom, CPA
Violation: This case involves misappropriation of investment advisory client funds by Groom, who at all relevant times was an investment adviser representative of a registered investment adviser and a registered representative of a registered broker-dealer. In January 2012, Groom became the trustee for two related trusts that had approximately $6.6 million in assets… Read More

Penalties: N/A
Respondent: Bettor Investments, LLC
Violation: Bettor and Stuart knew at the time that they had lost a significant portion of their investors’ assets and, given the limited funds available for wagering, could not reasonably expect to have the funds necessary to satisfy their promissory note obligations to investors upon maturity. Bettor and Stuart with violations of the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”), and the antifraud provisions of Section 17(a)(2) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5(b) thereunder… Read More

Penalties: N/A
Respondent: Brixmor Property Group Inc.
Violation: Between the third quarter of 2013 and the third quarter of 2015 (the “Relevant Period”), Brixmor, acting through its then senior executives, manipulated and falsely reported its “Same Property Net Operating Income Growth Rate,” or “SP NOI Growth Rate,” a non-GAAP measure relied on by investors and analysts to assess Brixmor’s financial performance. During the Relevant Period, Brixmor materially misstated its SP NOI Growth Rate in all but one of its quarterly filings (Forms 10-Q), each of its two annual filings (Forms 10-K), and its related Forms 8-K… Read More

Penalties: $7,311.00
Respondent: Christopher Plaford
Violation: Christopher Plaford, a resident of Bedford, N.Y., and fellow hedge fund manager Stefan Lumiere engaged in a fraudulent scheme to falsely inflate the value of securities held by a hedge fund advised by their firm. For an 18-month period, Plaford and Lumiere allegedly used sham broker quotes to mismark as many as 28 securities per month, surreptitiously passing their desired prices along to brokers via Lumiere’s personal cell phone or a flash drive delivered by a courier. SEC charged Plaford for his role in an insider trading scheme conducted on behalf of certain funds advised by his firm… Read More

Penalties: N/A
Respondent: Commonwealth Equity Services, LLC d/b/a Commonwealth Financial Network
Violation: Commonwealth violated the antifraud and compliance provisions of Section 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder… Read More

Penalties: $99,974.00
Respondent: John T. Place, et al.,
Violation: John Place, John Kirk, and Paul Kirk each consented to the entry of final judgments permanently enjoining them from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the registration provisions of Section 15(c)(1) of the Exchange Act… Read More

Penalties: N/A
Respondent: Alan Shinderman
Violation: On July 26, 2019, a final judgment was entered against Respondent, permanently enjoining him from future violations of Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, and from aiding and abetting future violations of Section 17A(d)(1) of the Exchange Act and Rules 17Ad-12 and 17Ad-13 thereunder, in the civil action entitled Securities and Exchange Commission v. Quicksilver Stock Transfer, LLC et al., Civil Action Number 2:18-cv-00131, in the United States District Court for the District of Nevada… Read More

Penalties: N/A
Respondent: Hybrid Coating Technologies, Inc., Infrastructure Developments Corp., and Oro East Mining, Inc
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: $25,000.00
Respondent: Jonathan Brosk
Violation: Respondent willfully violated Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) thereunder, which prohibit fraudulent conduct in connection with the purchase or sale of securities… Read More

Penalties: $18,527.18
Respondent: James W. Holden
Violation: Holden violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in connection with the purchase or sale of securities… Read More

Penalties: $13,922.00
Respondent: Christopher Plaford
Violation: Plaford, entered on July 15, 2019, by the U.S. District Court for the Southern District of New York, enjoins him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 204A, 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder… Read More

FINRA

22 Enforcement Documents

$1,547,500.00 in Fines

Penalties: $1,250,000.00
Respondent: Citigroup Global Markets Inc.
Violation: CGMI also failed to create and maintain certain required records in violation of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder, NASD Rule 3110 (for conduct occurring before December 5, 2011), FINRA Rule 4511 (for conduct occurring on or after December 5, 2011), and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Eric Nichols
Violation: In September and October 2018, Nichols, while registered through Morgan Stanley, settled a customer complaint away from the Firm, in violation of FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Matthew Albers
Violation: Between May 2017 and May 2018, Albers placed at least 16 trades on behalf of at least 16 customers on a discretionary basis, without speaking to the customers on the same day the transactions took place. Although Albers’ customers had authorized him to make those purchases, Albers did not have written authorization from the customers to exercise discretionary authority in their accounts, and he did not seek or obtain from his firm prior written acceptance of the accounts as discretionary… Read More

Penalties: N/A
Respondent: Fortino R. Rivera
Violation: Rivera provided false information during on-the-record (“OTR”) testimony regarding a joint account he held with a Centaurus customer (“Customer A”) at another FINRA member firm, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Diane Zhu
Violation: Zhu failed to provide information and documents as requested by FINRA staff’s Rule 8210 letter dated June 17, 2019. As a result, Zhu violated FNRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Robert Charles McNamara
Violation: McNamara failed to disclose to AAM accounts held at Merrill Lynch in which he had a financial interest, and therefore violated NASD Rule 3050 and FINRA Rule 2010; (2) McNamara purchased shares in an equity IPO while associated with AAM, and therefore violated FINRA Rules 5130 and 2010; and (3) McNamara provided inaccurate information to Merrill Lynch about his status as an associated person to facilitate the IPO transaction, in violation of FINRA Rule 2010… Read More

Penalties: $20,000.00
Respondent: Allen Holeman
Violation: Holeman’s false statements violated FINRA Rule 2010. FINRA Rule 2010 required members and associated persons to “observe high standards of commercial honor and just and equitable principles of trade.”This rule applies to all business-related misconduct regardless of whether it involves securities. The record establishes that Holeman knew about the liens at the time of the Annual Compliance Certification. We have found that Holeman’s claim that he was not aware of the liens at or around the time they were filed is not credible… Read More

Penalties: N/A
Respondent: James Hal Heafner
Violation: Heather refused to appear for testimony as requested by FINRA pursuant to FINRA Rule 8210. Heafner thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Ricky Alan Mantei
Violation: By his conduct in engaging in the Wells Fargo R66 SCD Trades and the Citibank FN6 SCD Trades and by submitting, or causing to be submitted, order tickets to JPT that failed to reflect Mantei’s directions to SP, identify those transactions as cross-trades, or provide the information required by JPT’s procedures for cross-trades, Mantei circumvented JPT’s supervisory procedures and contravened JPT’s prohibition against prearranged trading. As a result of the foregoing conduct, Mantei violated FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Cynthia Rice Jones
Violation: Respondent refused to provide testimony requested pursuant to FINRA Rule 8210 on the scheduled date or at any time. By virtue of this misconduct, Respondent has violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Cheryl C. Blakey
Violation: Between August 2018 and September 2018, Blakey paid $1,019.05 to Customer A to settle Customer A’s verbal complaint, made to Blakey, regarding an annuity surrender charge Blakey previously had said the customer would not incur. Blakey failed to notify Santander Securities of Customer A’s claim and did not seek or receive authorization from Santander Securities to resolve Customer A’s complaint. By virtue of the foregoing, Respondent violated FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Beth Hamilton
Violation: “In May 2019, Respondent violated FINRA Rules 8210 and 2010 by failing to appear and provide testimony as requested pursuant to FINRA Rule 8210 in connection with an investigation into Respondent being reimbursed by the Firm for unauthorized, personal expenses based on her submission of false expense reports… Read More

Penalties: N/A
Respondent: Orlando Vargas
Violation: On May 20, 2016 and August 19, 2016, Vargas sought reimbursement under the program by submitting to Fidelity order information for computer equipment that he had not actually purchased. In fact, Vargas had canceled the orders before completing the purchase of the computer equipment. Through this conduct, Vargas falsely represented to Fidelity that he had purchased computer equipment, obtained $2,000 in reimbursement to which he was not entitled and thereby converted Firm funds. By converting Firm funds, Vargas violated FINRA Rule 2010… Read More

Penalties: $200,000.00
Respondent: Dinosaur Financial Group LLC
Violation: In response to FINRA requests for information made pursuant to FINRA Rule 8210, Dinosaur provided inaccurate Quality of Market Report Card (“QMRC”) reports that purported to evidence the Firm’s supervisory review of its TRACE transaction reporting. The Firm produced eight monthly QMRC reports to FINRA that a senior Firm employee initialed and dated to reflect the time of his purported trading review… Read More

Penalties: N/A
Respondent: Cynthia Rice Jones
Violation: Respondent refused to provide testimony requested pursuant to FINRA Rule 8210 on the scheduled date or at any time. By virtue of this misconduct, Respondent has violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Elizabeth Stockwell
Violation: In December 2018, Stockwell received permission from a customer to obtain information about annuity positions that were not sold to her by Stockwell or the Firm. Thereafter, Stockwell impersonated the customer during two telephone calls with the customer service hotline of the annuity issuer and obtained information about the customer’s annuity positions. Although the customer gave Stockwell permission to obtain this information, she did not give Stockwell permission to impersonate her with the annuity company. By virtue of the foregoing, Stockwell violated FINRA Rule 2010… Read More

Penalties: $20,000.00
Respondent: Dawson James Securities, Inc.
Violation: During the Relevant Period, Dawson James required that its registered representatives use the Gryphon Network, which blocked calls to telephone numbers that appeared on the national DNC list and the firm’s DNC list. Nevertheless, during the Relevant Period, registered representatives in Dawson James’ New York branch office bypassed the Firm’s Gryphon Network when they called at least 49 telephone numbers that appeared on the national DNC list and for which no exception applied. By virtue of the foregoing, Dawson James violated FINRA Rules 3230 and 2010… Read More

Penalties: $5,000.00
Respondent: Damien Berkowicz
Violation: On August 3, 2018, while associated with NSC, Berkowicz was charged with two felonies, namely Conspiracy in the Fourth Degree and Criminal Possession of a Controlled Substance in the Third Degree. On August 10, 2018, Berkowicz was indicted on these charges. The indictment clearly identified the charges as felonies, and Berkowicz was represented by counsel in his criminal case. Berkowicz knew that he was required to amend his Form U4 to disclose his felony charges. At no time during his association with the Firm, however, did Berkowicz disclose on his Form U4 that he had been charged with two felonies. By virtue of the foregoing, Berkowicz willfully violated Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: $7,500.00
Respondent: Lori Sullivan Antolovic
Violation: Pursuant to MSRB Rule G-17, Antolovic had a duty to disclose the material aspects of financing structures if she reasonably believed that the conduit borrower personnel did not otherwise have knowledge of such structures. The material aspects of the financing, including the $2 million development fee, were disclosed to Individual A, whom Antolovic reasonably believed was authorized to act on behalf of the conduit borrower… Read More

Penalties: N/A
Respondent: James Paquette
Violation: Paquette failed to update his Form U4 to disclose a felony charge, in willful violation of Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: N/A
Respondent: Electronic Cigarettes International Group, Ltd., Seaniemac International, Ltd., and Ziwira, Inc.,
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Michael Filipidis
Violation: In connection with an investigation into allegations of misconduct in a customer bank account, FINRA staff sent Filipidis a request for information and documents pursuant to FINRA Rule 8210. On May 31, 2019, Filipidis, through his legal counsel, informed FINRA staff that he would not provide any substantive responses to FINRA’s request for information. Filipidis thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: David J. Volpe
Violation: Following the Form U5 filed by First Financial, FINRA began an investigation into whether Volpe engaged in a private securities transaction or borrowed funds from a customer. On May 17, 2019, in connection with that investigation, FINRA staff sent a request to Volpe for the production of information and documents pursuant to FINRA Rule 8210. As stated in a letter received by FINRA on June 24, 2019 and during telephone calls in June 2019, and by this agreement, Volpe acknowledges that he received FINRA’s request and will not produce the information and documents requested. By refusing to produce information and documents as requested pursuant to FINRA Rule 8210, Volpe has violated FINRA Rules 8210 and 2010… Read More

Penalties: $20,000.00
Respondent: Yousuf Saljooki
Violation: Between December 17, 2017 and January 16, 2018, Saljooki willfully failed to timely disclose an unsatisfied federal tax lien in violation of Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

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