Financial Enforcement Actions | Week of June 09 to June 14

Financial Enforcement Actions | Week of June 09 to June 14

Financial Enforcement Actions | Week of June 09 to June 14

Penalties: N/A
Respondent: Auto Village Bristol Limited
Violation: AVBL failed to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that AVBL is a fit and proper person having regard to all the circumstances, including whether AVBL 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: GLR Scooters Hoddesdon Limited
Violation: GLR has failed to pay the Overdue Balance and it has not been open and cooperative in all its dealings with the Authority, in that GLR has failed to respond to the Authority’s repeated requests for it to pay the Overdue Balance, and has thereby failed to comply with Principle 11 of the Principles and to satisfy the Authority that it is ready, willing and organized to comply with the requirements and standards of the regulatory system… Read More

Penalties: N/A
Respondent: GLR Scooters Hoddesdon Limited
Violation: GLR has failed to pay the Overdue Balance and it has not been open and cooperative in all its dealings with the Authority, in that GLR has failed to respond to the Authority’s repeated requests for it to pay the Overdue Balance, and has thereby failed to comply with Principle 11 of the Principles and to satisfy the Authority that it is ready, willing and organized to comply with the requirements and standards of the regulatory system… Read More

Penalties: N/A
Respondent: Niel Russel Cheetham
Violation: Mr. Cheetham has failed to pay the Overdue Balance and he has not been open and co-operative in all his dealings with the Authority, in that Mr. Cheetham has failed to respond to the Authority’s repeated requests for him to pay the Overdue Balance, and has thereby failed to comply with Principle 11 of the Principles and to satisfy the Authority that he is ready, willing and organized to comply with the requirements and standards of the regulatory system… Read More

Penalties: $42,530.00
Respondent: Canon Inc.; Toshiba Corporation
Violation: During March 15-17, 2016, in a multi-step process, Toshiba, transferred ownership of TMSC to Canon, but in a way designed to evade notification requirements. First, Toshiba rearranged the corporate ownership structure ofTMSC to make the scheme possible: it created new classes of voting shares, a single non-voting share with rights custom-made for Canon, and options convertible to ordinary shares. Second, Toshiba sold Canon TMSC’s special non-voting share and the newly-created options in exchange for $6.1 billion, and at the same time transferred the voting shares ofTMSC (a $6.1 billion company) to MS Holding in exchange for a nominal payment of nine hundred dollars. Later-in December 2016—Canon exercised its options and obtained formal control ofTMSC’s voting shares… Read More

Penalties: N/A
Respondent: LightYear Dealer Technologies, LLC
Violation: Until at least June 2017, Respondent engaged in a number of practices that, taken together, failed to provide reasonable security for the personal information stored on its network… Read More

Penalties: $90,000.00
Respondent: Smart Home Protection Ltd
Violation: Smart Home Protection Ltd make nuisance calls to people registered with the Telephone Preference Service (TPS)… Read More

Penalties: N/A
Respondent: Smart Home Protection Ltd
Violation: Between 10 February 2017 and 24 September 2018 Smart Home Protection Ltd used a public telecommunication service for the purpose of making 125 unsolicited calls for direct marketing purposes to subscribers where the number allocated to the subscriber in respect of the line called was a number listed on the register of numbers kept by the commissioner in accordance with regulation 26, contrary to regulation 21 (1)(b) of PECR… Read More

FINRA

12 Enforcement Documents

$948,554.00 in Fines

Penalties: N/A
Respondent: Daniel Robert Rozzi
Violation: Between July 2016 and March 2018, Rozzi willfully failed to amend his Uniform Application for Securities Industry Registration or Transfer ( ” Form U4″) to disclose a $ 14,789 civil judgment in violation of Article V, Section 2 ( c ) of the FINRA By-Laws and FINRA Rules 1122 and 2010. In addition, in January and July 2018, Rozzi submitted false written responses to FINRA about the civil judgment in violation of FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Donna Flemming
Violation: From September 2013 to August 2015, Flemming failed to implement an AML compliance program reasonably designed to detect and cause the reporting of suspicious activity in SEI’s primary business—accepting and liquidating customers’ deposits of microcap securities—in violation of FINRA Rules 3310(a) and 2010… Read More

Penalties: N/A
Respondent: George C. Merhoff Jr.
Violation: Merhoff failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. Merhoff thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Kyung Soo Kim
Violation: In December 2017, Kim engaged in an outside business activity without providing prior written notice to his Firm. As a result, Kim violated FINRA Rules 3270 and 2010… Read More

Penalties: N/A
Respondent: Nicolas J. Barrios
Violation: Barrios failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. Barrios thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Nina S. Jessee
Violation: Jessee failed to appear for two on-the-record interviews requested by FINRA pursuant to FINRA Rule 8210. Jessee thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $200.00
Respondent: Ross Sinclaire & Associates. LLC
Violation: In March and April 2014, Ross Sinclaire; as the exclusive placement agent for a private placement of notes, assisted with the preparation and circulation of a Confidential Information Memorandum (“CIM”) to seven accredited investors for notes, the proceeds of which the issuer was to provide to a film production company for the advance funding of anticipated state tax credits. The CIM disclosed that in addition to a 2% commission. Ross Sinclaire would also earn a “certain percentage” of profits on the sale of tax credits but failed to. disclose that it would earn all of those profits, a material fact that would have been important to investors. The C1M also failed to disclose that one of Ross Sinclaire’s registered representatives was Vice President or the issuer. As a result. the Firm violated FINRA Rule 2010 by acting in contravention of Section I7(a)(2) of the Securities Act of 1933 (“Securities Act”)… Read More

Penalties: $762,261.00
Respondent: Spencer Edwards, Inc. (“SEI”)
Violation: From September 2013 to August 2015, SEI failed to establish and implement, as part of its anti-money laundering (“AML”) compliance program, policies and procedures reasonably designed to detect and cause the reporting of suspicious activity in its primary business—accepting and liquidating customers’ deposits of microcap securities. As a result, SEI violated FINRA Rules 2010 and 3310(a)… Read More

Penalties: N/A
Respondent: Rand A. Heckler
Violation: During the course of an ongoing examination, Respondent failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. Respondent also stated that he would not appear for on-the-record testimony before FINRA, also requested pursuant to FINRA Rule 8210. Respondent thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $56,093.00
Respondent: Brian Colin Doherty
Violation: Respondent, a registered representative at an interdealer broker, intentionally engaged in a fraudulent, prearranged trading scheme to enable his customer, the trader of a proprietary account at another member firm, to evade that firm’s aged inventory policy… Read More

Penalties: N/A
Respondent: Patrick Neal Foley
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 allegations that he accepted loans from an elderly Firm customer. In response to a request that he appear and provide testimony made pursuant to FINRA Rule 8210, Respondent stated through counsel that he would not appear as requested. Respondent subsequently failed to appear on the date requested and informed staff that he would not cooperate further in the investigation… Read More

SEC

22 Enforcement Documents

$75,087,744.00 in Fines

Penalties: N/A
Respondent: Alton and Xiang Mei Lin Perkins Family Trust
Violation: Defendants Perkins, Yilaime NC, and Perkins Hsu knowingly, intentionally, and/or recklessly engaged in the aforementioned devices, schemes, and artifices to defraud. While engaging in the course of conduct described above, Defendants Perkins, Yilaime NC, and Perkins Hsu acted with scienter, that is, with an intent to deceive, manipulate or defraud or with a severe reckless disregard for the truth… Read More

Penalties: N/A
Respondent: Alton Perkins, et al.
Violation: Between approximately January 2014 and April 2015, Perkins and the two companies made numerous representations to investors regarding their planned uses of the investment proceeds, entity expenses, related party transactions, and Perkins’s own compensation. The complaint alleges, however, that through a series of self-dealing transfers and withdrawals, Perkins misappropriated approximately $800,000 of the investors’ funds, including approximately $580,000 to purchase his home… Read More

Penalties: N/A
Respondent: Andy Altahawi
Violation: Altahawi, in unregistered transactions, sold shares of Longfin Corp., shares of which were traded on the Nasdaq Stock Market (“Nasdaq”), in violation of Section 5 and that no exemption from registration applied to these sales… Read More

Penalties: N/A
Respondent: Anthony G. Blumberg
Violation: From at least October 2006 through October 2011, Blumberg participated in a fraudulent scheme to conceal from customers of CGM the routine practice of routing their orders for the purchase or sale of securities to an offshore affiliate, CGM Limited, which would take substantial mark-ups and mark-downs on customer’s trades in addition to the disclosed commissions they paid to CGM. Blumberg participated in the scheme by directing employees who reported to him to mislead customers about this practice, including by falsifying trading data provided to customers who inquired about details of their securities transactions, suspending the practice of taking mark-ups or mark-downs when customers were monitoring execution prices, and using technological tools to prevent customers from discovering that mark-ups or mark-downs had been taken on their trades in markets where such mark-ups or mark-downs would otherwise have been obvious. As a result of the scheme, numerous customers paid millions of dollars in additional charges that were kept hidden from them… Read More

Penalties: N/A
Respondent: Changda International Holdings, Inc.
Violation: The time for filing a petition for review of the initial decision in this proceeding has expired. No such petition has been filed by Changda International Holdings, Inc., and the Commission has not chosen to review the decision on its own initiative… Read More

Penalties: $410,736.00
Respondent: Christopher Salis, et al
Violation: Salis was entrusted with confidential information concerning the pending merger by a close friend at Concur and then tipped Douglas Miller about the upcoming acquisition. Douglas Miller then tipped Edward Miller, and they rushed to place risky, short-term trades in Concur call options. After the Concur deal was announced, Douglas Miller, Edward Miller, and other friends and family members who traded collectively made over a half a million dollars in profit on the call options and, as alleged in the complaint, kicked a portion of the proceeds back to Salis… Read More

Penalties: $15,000.00
Respondent: David Vogel
Violation: KIT Digital acquired a private company, Corporation X, which offered a “cloud-based video delivery platform”, i.e. a method by which companies could stream video over the Internet. The deal team for KIT Digital included, among others, KIT Digital’s chief financial officer (“CFO”). At the time of its negotiations with KIT Digital, Corporation X had a contract to create and deliver a software product for two subsidiaries of a Mexican corporate conglomerate (“Customer A” and “Customer B”). By the time of the acquisition, Corporation X had not completely delivered the fully functional software product to Customers A and B… Read More

Penalties: $19,824,595.00
Respondent: DFRF Enterprises LLC, et al
Violation: In June 2015, the SEC charged Heriberto C. Perez Valdes, a former Florida resident, Massachusetts based DFRF Enterprises LLC, and Florida-based DFRF Enterprises, LLC, along with six other individual defendants, for their roles in a pyramid and Ponzi scheme that targeted investors in Spanish and Portuguese-speaking communities. The SEC alleged that investors were falsely told that the DFRF entities, purported gold mining companies, owned more than 50 gold mines in Africa and Brazil and that an investment in these companies would be fully insured and guaranteed. The defendants allegedly raised more than $15 million from at least 1,400 investors between 2014 and 2015 by recruiting new members in pyramid scheme fashion to keep the fraud afloat. Commissions were allegedly paid to earlier investors in a Ponzi-like fashion to encourage their recruitment efforts… Read More

Penalties: $42,835,192.00
Respondent: Industrial and Commercial bank of China Financial Services LLC
Violation: From at least September 2011 until approximately December 2015, ICBCFS was a Pre-Release Broker that obtained pre-released ADRs directly from four Depositaries pursuant to Pre-Release Agreements. Contrary to certain provisions in the Pre-Release Agreements and the Deposit Agreements, associated persons on ICBCFS’s securities lending desk regularly obtained pre-released ADRs from Depositaries and loaned them to customers or counterparties without taking reasonable steps to determine whether the requisite number of ordinary shares was owned and custodied by ICBCFS or its counterparties. The result of this conduct was the issuance of ADRs that in many instances were not backed by ordinary shares as required by the Deposit… Read More

Penalties: $2,882,221.00
Respondent: Kimberly Pine Kitts
Violation: Kitts was charged by the SEC for her six-year scheme to steal money from client accounts by forging client signatures on withdrawal requests from variable annuities, forging client signatures to wire funds from client brokerage accounts, and misleading clients into withdrawing funds to make fake tax payments. Kitts used the money she stole for personal expenses, including paying for vacations and several luxury vehicles… Read More

Penalties: N/A
Respondent: Leon Vaccarelli
Violation: Vaccarelli defrauded at least nine investors, several of whom were elderly, of over $1,000,000. Instead of investing the customers’ funds in investment accounts and other investment opportunities as promised, Vaccarelli used the funds for his own living and business expenses. In some instances, he used the customers’ funds to pay back prior investors. Vaccarelli asked one customer to sign an agreement that she would not provide certain information to FINRA or the SEC… Read More

Penalties: $8,370,000.00
Respondent: Orthofix International N.V.
Violation: Pursuant to Rule 1105(d) of the Commission’s Rules, 17 C.F.R. § 201.1105(d), that OFM pays the Fund Administrator’s fees and expenses in the amount of $101,295.06. Further, OFM is authorized to pay, at the direction of the Assistant Director, any future fees and expenses from the Fair Fund, so long as the total amount paid to the Fund Administrator, including the invoice to be paid, does not exceed the total amount of the cost proposal submitted by the Fund Administrator… Read More

Penalties: $750,000.00
Respondent: Steven Fisho, et al
Violation: Tang, who was then a Vice President of Clinical Research for Sangamo and a close friend and business associate of Govender, tipped Govender about confidential licensing agreement negotiations… Read More

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