Weekly Enforcement Action Tracker (June 17 – June 22)

Financial Enforcement Action Summary

FTC

Penalties: TBD
Respondent: Québec Inc.
Violation: In numerous instances, in connection with the offering for sale or sale of Internet directory listings, search engine optimization services, and website design and hosting services, Defendants have represented, directly or indirectly, expressly or by implication, that consumers have a preexisting business relationship with Defendants… Read More

NYSE

Penalties: $52,500.00
Respondent: Integral Derivatives, LLC and Williamn Fallon
Violation: Integral Derivatives, LLC violated (i) NYSE Arca Rules 2.24(b) and 11.18(d) and former NYSE Arca Equities Rules 2.21(b) and 6.18(d), by failing to register its Chief Compliance Officer and Executive Manager and Floor Supervisor with the Exchange as General Securities Principals… Read More

Penalties: $55,000.00
Respondent: OTA LLC
Violation: OTA LLC violated (i) NYSE Arca Rule 7.23-E, by failing to maintain continuously, two-sided trading interest in approximately 1,183 full-day instances, and (ii) NYSE Arca Rule 11.18(b) and (c), by failing to establish and maintain adequate supervisory systems and written procedures reasonably designed to ensure compliance with NYSE Arca Rule 7.23-E… Read More

FINRA

12 Enforcement Documents

$445,000.00 in Fines

Penalties: N/A
Respondent: Dennis Mitchell Farrah
Violation: Farrah acknowledges that he received FINRA’s Rule 8210 requests for information and documents and will not produce the documentation and information requested… Read More

Penalties: TBD
Respondent: Bruce Martin Zipper
Violation: Dakota did not adequately supervise Zipper, allowing him to associate while suspended (and later while statutorily disqualified) and to falsify firm books and records by misidentifying the responsible broker for hundreds of trades… Read More

Penalties: N/A
Respondent: Steven R. Knuttila
Violation: Knuttila failed to appear for on-the-record testimony requested by FINRA staff pursuant to FINRA Rule 8210. Through this conduct, Knuttila violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Joseph Kortei Clottey
Violation: Clottey failed to provide on-the-record testimony in response to FINRA’s Rule 8210 requests… Read More

Penalties: $5,000.00
Respondent: Jianan Yang
Violation: From 2014 to 2016, Yang engaged in work as a career coach through an online career coaching company for approximately $10,000 in total compensation, without disclosing this activity to his employing FINRA-regulated broker-dealer, in violation of FINRA Rules 3270 and 2010… Read More

Penalties: $7,500.00
Respondent: James W. Stowell
Violation: On three occasions in December 2015 through February 2016, Stowell took instructions from an unauthorized person (his customer’s husband) to withdraw a total of $40,000 from his elderly customer’s account. At the time, the customer’s account did not have a cash balance to distribute. Without authorization, Stowell liquidated shares of a mutual fund to fund the withdrawals. Stowell authorized the issuance of checks from the customer’s account to distribute per the husband’s instructions. As a result, Stowell violated FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Sean William Killoran
Violation: Respondent failed to comply with those requests in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $400,000.00
Respondent: MTG LLC d/b/a Betterment Securities
Violation: The Firm did not ensure that its practices complied with certain FINRA and SEC financial and operational rules and interpretations… Read More

Penalties: $5,000.00
Respondent: Richard Feldman
Violation: During the Relevant Period, Feldman caused the Firm to fail to properly make and keep certain of its books and records… Read More

Penalties: $10,000.00
Respondent: Eli Broverman
Violation: Broverman caused the Firm to engage in “window dressing” by altering its practices on reserve computation days specifically to reduce its reserve formula computation and thereby reduce its reserve requirement… Read More

Penalties: $7,500.00
Respondent: Wills S. Henriquez
Violation: From May 2013 through May 2017, Henriquez exercised discretion without written authorization in four customers’ accounts despite his member firm prohibiting such activity, in violation of NASD Rule 2510 and FINRA Rule 2010. Additionally, from March 2016 through March 2017, Henriquez mismarked approximately 32 order tickets, in violation of FINRA Rules 4511 and 2010… Read More

Penalties: $10,000.00
Respondent: Central States Capital Markets, LLC
Violation: Between April 22, 2014 and August 16, 2016 (the “Relevant Period”) Central States failed to have a properly registered Municipal Securities Principal (“MSP”) supervise the underwritings in the Firm’s Wichita, Kansas branch office. Through this conduct, the Firm violated MSRB Rules G-2 and G-3… Read More

SEC

25 Enforcement Documents

$49,679,445.91 in Fines

Penalties: TBD
Respondent: Bryan Lee Addington
Violation: For the purpose of enriching himself, between January 1, 2010, and April 14, 2016, he devised a scheme to defraud investors, which consisted of: (a) falsely representing that investors’ money would be invested in, among other things, real estate and land, insurance products, film tax credits, annuities, and stock, and would be used to purchase insurance policies… Read More

Penalties: $279,445.91
Respondent: Pawel P. Dynkowski, et al.
Violation: Bailey and several co-defendants participated in a pump-and-dump scheme involving GH3’s common stock that generated more than $700,000 of illicit profits… Read More

Penalties: TBD
Respondent: Larry A. Holley, et al.
Violation: Conspiracy to commit wire and mail fraud, wire fraud, mail fraud, and money laundering… Read More

Penalties: N/A
Respondent: Nicholas Rubbo
Violation: From 2012 through the present, he acted as an unregistered sales agent for VIP, run by his siblings and co-conspirators, that did business in Broward County, and elsewhere, by participating in the offer and sale of VIP stock and related investment offerings… Read More

Penalties: N/A
Respondent: Pasquale Rubbo
Violation: From 2012 through the present, he acted as an unregistered sales agent for VIP, run by his siblings and co-conspirators, that did business in Broward County, and elsewhere, by participating in the offer and sale of VIP stock and related investment offerings… Read More

Penalties: N/A
Respondent: Escalera Resources Co. and Force Minerals Corp.
Violation: All of the 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…. Read More

Penalties: N/A
Respondent: SEC Complaint – Texas Coastal Energy Company, LLC, et. al.
Violation: From early 2013 through November 2014, TCEC and Gordon defrauded at least 80 investors out of more than $8 million in connection with various unregistered securities offerings conducted for the purported purpose of drilling oil and gas wells. TCEC and Gordon generally solicited investors from multiple states and lured them to invest in the unregistered offerings, using a combination of high-pressure tactics, deceptive sales pitches, and false and misleading offering materials… Read More

Penalties: N/A
Respondent: Canwealth Minerals Corp., Cubed, Inc. and Enviro Cleanse, Inc.
Violation: The order contained in that decision is hereby declared final. The initial decision ordered that pursuant to Section 12(j) of the Securities Exchange Act of 1934, the registrations of each class of the registered securities of Canwealth Minerals Corp., Cubed, Inc., and Enviro Cleanse, Inc., are revoked. The revocation is effective as of June 20, 2018… Read More

Penalties: N/A
Respondent: California Mines Corp., Cindisue Mining Corp. and Dune Energy, Inc.
Violation: The order contained in that decision is hereby declared final. The initial decision ordered that, pursuant to Section 12(j) of the Securities Exchange Act of 1934, the registrations of the registered securities of California Mines Corp., Cindisue Mining Corp., and Dune Energy, Inc., are revoked. The revocation is effective as of June 20, 2018… Read More

Penalties: $42,000,000.00
Respondent: Merrill Lynch, Pierce, and Fenner & Smith Incorporated
Violation: Concerns Merrill Lynch’s sustained efforts to hide its practice of routing certain customer orders to other broker-dealers (“External Liquidity Providers,” “Electronic Liquidity Partners,” or “ELPs”), including proprietary trading firms and wholesale market makers, for execution… Read More

Penalties: N/A
Respondent: Radiant Oil & Gas, Inc., Tungsten Corp. and Well Power, Inc.
Violation: 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 June 30, 2014… Read More

Penalties: $7,200,000.00
Respondent: Texas Coastal Energy Company, LLC, et. al.
Violation: Jefferey Gordon and Texas Coastal Energy Company, LLC (TCEC) cold-called investors across the country, soliciting their interest in financing the drilling and completion of oil-and-gas prospects in Kansas and Texas in exchange for a share of future oil-and-gas production revenue… Read More

Penalties: N/A
Respondent: SEC Complaint – Joseph A. Fiore, Berkshire Capital Management Company, Inc., and Eat at Joe’s, Ltd. (n/k/a SPYR, Inc.)
Violation: Fiore orchestrated a fraudulent scheme to promote and otherwise manipulate the market for the common stock of microcap company Plandai Biotechnology, Inc. (“Plandai”). Fiore engaged in a variety of deceptive conduct to affect the market for Plandai stock while concealing that he controlled a large number of Plandai shares and intended to sell them… Read More

Penalties: TBD
Respondent: SEC Complaint – Santillo, et al.
Violation: The Commission brings this action to stop an ongoing fraudulent scheme in which the Defendants have raised more than $102 million from at least 637 investors across the United States since 2011… Read More

Penalties: TBD
Respondent: PlexCorps, et al.
Violation: Violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933 (Securities Act)… Read More

Penalties: TBD
Respondent: Santillo, et al.
Violation: The defendants defrauded more than 600 investors through sales of securities in issuers they controlled, including First Nationle Solution LLC, United RL Capital Services, and Percipience Global Corp… Read More

Penalties: TBD
Respondent: Joseph A. Fiore, Berkshire Capital Management Company, Inc., and Eat at Joe’s, Ltd. (n/k/a SPYR, Inc.)
Violation: Fiore financed and directed a promotional campaign that included recommendations to buy Plandai stock without disclosing that Fiore beneficially owned Plandai stock, intended to sell and was selling millions of shares, comprising a substantial portion of his Plandai stock holdings, into the public market… Read More

Penalties: TBD
Respondent: James E. Hocker
Violation: Engaging in a Ponzi scheme that targeted retail investors who lacked significant investment experience… Read More

Penalties: TBD
Respondent: SEC Complaint – James E. Hocker
Violation: From at least 2010 through 2017, Hocker engaged in a fraudulent investment scheme, in which he falsely promised retail investors that he would invest their funds and achieve guaranteed returns of between 10% and 30%… Read More

Penalties: N/A
Respondent: Apex Fund Services (US), Inc.
Violation: IT IS ORDERED that pursuant to Rule 1104 of the Rules,2 for good cause shown, the time for entering an order approving or disapproving the Plan is extended to September 28, 2018… Read More

Penalties: N/A
Respondent: Development Capital Group, Inc., et al.
Violation: All of the 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… Read More

Penalties: N/A
Respondent: FuelNation, Inc. and 3D Total Solutions, Inc.
Violation: All of the 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… Read More

Penalties: $200,000.00
Respondent: Stephen Pence
Violation: Misled the company’s auditors and investors by concealing his knowledge regarding $2.3 million in missing company cash and several related-party transactions… Read More

Penalties: N/A
Respondent: Orthofix International N.V.; Jeffrey Hammel, CPA; Brian Mccollum; Kenneth Mack and Bryan Mcmillan
Violation: Accordingly, IT IS HEREBY ORDERED that pursuant to Rule 1104 of the Commission’s Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1104, the Plan is approved, and shall be posted simultaneously with this Order on the Commission’s website at www.sec.gov… Read More

Penalties: N/A
Respondent: Orthofix International N.V.; Jeffrey Hammel, CPA; Brian Mccollum; Kenneth Mack and Bryan Mcmillan – Distribution Plan
Violation: The Plan provides for a distribution of the funds collected in the above-referenced proceedings from Orthofix International N.V. (“Orthofix”), Jeffrey Hammel, CPA (“Hammel”), Bryan McCollum (“McCollum”), Kenneth Mack (“Mack”), and Brian McMillan (“McMillan”) (collectively, the “Respondents”) to investors who purchased shares of Orthofix International common stock at inflated prices during the period from March 2, 2010, through August 7, 2013, inclusive (“Recovery Period”) and who suffered losses in the value of their investments subsequent to disclosures by the Respondents… Read More

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