Financial Enforcement Actions | Week of June 23 to June 28

Financial Enforcement Actions | Week of June 23 to June 28

Financial Enforcement Actions | Week of June 23 to June 28

Penalties: N/A
Respondent: ETA Services Ltd
Violation: ETA Services Ltd has given this undertaking to the FCA under the Consumer Rights Act 2015 (the CRA) in respect of its Cycle Insurance Policy Wording which applied to contracts entered into between 1 October 2015 and 31 March 2019… Read More

Penalties: $6,500.00
Respondent: Sanford C. Bernstein & Co., LCC
Violation: Sanford C. Bernstein & Co., LLC violated Exchange Act Rule 611(c) and NYSE Arca Equities Rules 7.31(jj), by failing to take reasonable steps to establish that the ISOs it routed met definitional requirements… Read More

Penalties: $100,000.00
Respondent: EE Limited
Violation: 100000 Respondent has sent over 2.5 million direct marketing (unlawful text) messages to its customers, without consent… Read More

Penalties: $100,000.00
Respondent: EE Limited
Violation: Between 17 February 2018 and 25 March 2018 EE Limited sent a total of 2,590,456 direct marketing messages to subscribers without their consent… Read More

Penalties: N/A
Respondent: Metropolitan Police Service
Violation: Failed to comply with individuals’ rights in respect of subject access requests… Read More

Penalties: N/A
Respondent: Chief Constable of the Metropolitan Police Service
Violation: The data controller has contravened the sixth data protection principle in that, contrary to Section 7,it has failed to inform the 8 individuals, without undue delay, whether their personal data is being processed by or on behalf of the data controller and, where this is the case, failed, without undue delay, to have communicated to them in an intelligible form such information as may constitute personal data… Read More

Penalties: N/A
Respondent: Chief Constable of the Metropolitan Police Service
Violation: The fluctuating backlog is a cause of significant concern for the commissioner, and demonstrates that the controller is currently failing to adhere to its obligations in respect of the information rights of the individuals for whom it processes data. Precious meetings and protracted correspondence between the controller and commissioner have proven ineffective and so it has been determined that an Enforcement Notice is required to encourage compliance… Read More

FINRA

12 Enforcement Documents

$881,568.00 in Fines

Penalties: $12,500.00
Respondent: Fred Brown
Violation: Between May and December 2016, Brown borrowed $69,000 from two of his Firm customers (the “Loans”) without providing notice to, or receiving written pre-approval from, the Finn. In doing so, Brown violated FINRA Rules 3240 and 2010. Brown also made misstatements to the Firm about the Loans in his annual compliance questionnaire and during the Firm’s internal investigation in violation of FINRA Rule 2010… Read More

Penalties: $15,000.00
Respondent: Mark Gregory Raezer
Violation: Between January and March 2017, (the “Relevant Period”), while associated with TCM, Raezer participated in nine private securities transactions involving approximately $911,000 in securities issued by a purported real estate investment company (the “Issuer”). Raezer violated FINRA Rules 3280 and 2010 by participating in these private securities transactions without providing notice to or obtaining approval from the Firm… Read More

Penalties: N/A
Respondent: Larry Michael Crabtree
Violation: In May 2019, during the course of an ongoing investigation into whether Crabtree converted funds, he failed to appear and provide testimony requested pursuant to FINRA Rule 8210. Crabtree thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $19,534.00
Respondent: Jeffrey P. Schwebach
Violation: Between October 2016 and October 2017 (the “Relevant Period”), Schwebach violated FINRA Rules 3280 and 2010 by engaging in private securities transactions without providing notice to, or obtaining approval from, 1FG… Read More

Penalties: $55,000.00
Respondent: Sanford C. Bernstein & Co., LLC
Violation: During the period of October 1, 2014 through March 31, 2015 (the “First Review Period”), the Firm, acting as a trading center, failed to establish, maintain, and enforce written policies and procedures that were reasonably designed to prevent trade-throughs of protected quotations in national market system (“NMS”) stocks when it executed orders in NMS stocks internally but failed to simultaneously send ISOs to one or more markets displaying protected quotations in that stock, in violation of Exchange Act Rule 611(a) and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Daniel M. Soliman
Violation: During the course of an ongoing investigation, Soliman failed to appear for on the-record testimony requested pursuant to FINRA Rule 8210. As a result, Soliman violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Mijin Kim
Violation: Between January and April 2018, Respondent altered signed customer documents without permission from the customers. Although the customers had not given Respondent permission to make the alterations, Respondent altered the documents as an accommodation to the customers in order to facilitate the Firm’s processing of the documents. When her supervisor questioned her about one of the altered documents, to conceal her misconduct, Respondent fabricated two fictitious emails to create the misimpression that she had sent the altered document to the customer and that the customer had reviewed and authorized the alteration. Respondent then provided those fictitious emails to her supervisor even though they were not actual communications with the customer. By virtue of this conduct, Respondent violated FINRA Rule 2010… Read More

Penalties: $19,534.00
Respondent: Jeffrey P. Schwebach
Violation: Between October 2016 and October 2017 (the “Relevant Period”), Schwebach violated FINRA Rules 3280 and 2010 by engaging in private securities transactions without providing notice to, or obtaining approval from, 1FG… Read More

Penalties: $250,000.00
Respondent: Axos Clearing LLC
Violation: From January 2013 through October 2018 (the “Relevant Period”), Axos Clearing failed to have established procedures reasonably designed to assure that customers received the initial margin interest rate disclosures and failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with Rule 10b-16(a)(1). In fact, many customers did not receive the initial disclosure stating the annual rate or rates of margin interest that can be imposed. As a result, Axos Clearing violated SEC Rule 101)-16(0(1), NASD Rules 3010(a) and (b), and FINRA Rules 3110(a) and (b) and 2010… Read More

Penalties: N/A
Respondent: Gregory John Lane
Violation: “In March 2019, during the course of Enforcement’s investigation, Lane violated FINRA Rules 8210 and 2010 by failing to provide documents and information and by refusing to appear and provide testimony requested pursuant to FINRA Rule 8210″… Read More

Penalties: $5,000.00
Respondent: Zvi Ben-Zvi
Violation: “In March and May 2018, while associated with Paulson, Ben-Zvi participated in private securities transactions without providing prior written notice to his Firm, in violation of FINRA Rules 3280 and 2010″… Read More

Penalties: $500,000.00
Respondent: Meyers Associates, L.P.
Violation: Meyers violated NASD Rule 3010(a) and FINRA Rule 2010 by failing to adequately supervise its Chicago office and specifically George E. Johnson, a former registered representative who engaged in market manipulation and defrauded customers in violation of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and FINRA Rules 2020 and 2010… Read More

Penalties: N/A
Respondent: First Choice Horizon LLC; First Southern Trust LLC; First United Mutual LLC; Premier Un Ion Trust LLC; South Premier Trust LLC; Suncoast Mutual LLC; Raymond Gonzalez; Carlos S. Guerrero; Joshua Hernandez
Violation: Defendants have initiated, or caused others to initiate, an outbound telephone call to a telephone number within a given area code when Defendants had not, either directly or through another person, paid the required annual fee for access to the telephone numbers within that area code that are included in the National Do Not Call Registry, in violation of the TSR, 16 C.F.R. § 310.8… Read More

Penalties: N/A
Respondent: Derek Jason Bartoli
Violation: Bartoli has failed to transmit or cause to be transmitted to caller identification services the telephone number and name of the telemarketer making the call, or the customer service number and name of the seller on whose behalf the telemarketer called, in violation of 16 C.F.R. § 310.4(a)(8)… Read More

Penalties: $7,600,000.00
Respondent: Media Mix 365, LLC ; Nicholas J. Long ; Nicole J. Long
Violation: Defendants have initiated or caused others to initiate an outbound telephone call to a person’s telephone number on the National Do Not Call Registry in violation of the TSR. 16 C.F.R. §310.4(b)(1)(iii)(B)… Read More

Penalties: N/A
Respondent: 8 Figure Dream Lifestyle LLC; JL Net Bargains, Inc.; Kappy Enterprises, LLC; Millionaire Mind Enterprises LLC; OEA, LLC; Spirit Consulting Group, Inc.; John A. Bain; Alex Dee; Brian M. Kaplan; Jerrold S. Maurer
Violation: Defendants made Misrepresentations Regarding Earnings and thereby violated Section 5(a) of the FTC Act, 15 U.S.C. § 45(a)… Read More

SEC

39 Enforcement Documents

$99,750,365.92 in Fines

Penalties: N/A
Respondent: Suzanne Aileen Gagnier
Violation: In connection with the sale of Jersey Consulting, LLC securities, Gagnier acted as an unregistered broker. The complaint further alleged that Gagnier misrepresented to investors that Jersey Consulting, LLC had a commercially viable technology, failed to disclose that Jersey was owned and operated by a convicted felon and had no material revenues, otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. The complaint also alleged that Gagnier offered and sold securities of Jersey in unregistered transactions and did so without registering with the Commission as a broker during the period of her solicitation of Jersey securities… Read More

Penalties: $529,925.00
Respondent: Avi Chiat
Violation: Murakami misappropriated investor funds for business and personal expenses and made approximately $1.3 million in Ponzi-like payments. The SEC also alleged that Chiat helped Murakami raise money from investors while providing investors with fabricated account statements that grossly overstated investment performance… Read More

Penalties: $3,983,661.51
Respondent: Fifth Street Management, LLC
Violation: In 2013 and 2014, the Respondent improperly allocated to its former business development clients — Fifth Street Finance Corp. and Fifth Street Senior Floating Rate Corp. (collectively, the “BDC clients”) — rent and other overhead expenses, and certain compensation expenses that the Respondent should have paid… Read More

Penalties: N/A
Respondent: Worldwide Markets, Ltd., TAB Networks, Inc.; Thomas F. Plaut
Violation: Worldwide Markets furthered its fraudulent scheme by improperly misappropriating at least $400,000 of customer deposits. Worldwide Market used customer deposits for undisclosed purposes such as financing other business lines and reimbursing employee expenses. Despite its representations that customer withdrawals would be processed within two business days, Worldwide Markets allegedly has not honored a single customer withdrawal request since 2017… Read More

Penalties: N/A
Respondent: Richard Vu Nguyen, et al
Violation: Nguyen offered investors the chance to invest in a “fund” he called “Nguyen Tran Le Fund”; undisclosed to investors, however, the so-called fund is really a collection of financial accounts held by Nguyen, NTV, and Nguyen’s girlfriend. Nguyen also, according to the complaint, falsely promised investors 16% annual returns, that their investments were 100% guaranteed, that he had never lost money managing client accounts, and that they could withdraw their money at any time-all while he was losing significant investor money. Nguyen allegedly also improperly used about $600,000 in investor funds for business and personal expenses, including purchases of a home and vehicles… Read More

Penalties: $105,321.00
Respondent: Richard Vu Nguyen, A/KI A Nguyen ThannH VI; NTV Financial Group, Inc.
Violation: Defendants NTV Financial and Nguyen each defrauded actual and potential separately managed account clients by making false and misleading statements and omissions to investors about Nguyen’s background and employment history and Defendants’ trading results and thereby violated Sections 206(1) and (2) of the Advisers Act, 15 U.S.C. §§ 80b6(1) & 80b-6(2)… Read More

Penalties: $1,232,510.41
Respondent: Amrit J. S. Chahal
Violation: From at least February 2015 through February 2018, Chahal fraudulently solicited approximately $1.4 million from about 50 individuals by falsely claiming to be an experienced and successful trader who could generate above-market returns for clients through a low-risk trading strategy. Chahal initially invested client funds in a variety of investments, and suffered significant trading losses… Read More

Penalties: $507,019.00
Respondent: Mark Allen Plummer
Violation: From February 2015 to April 2017, Texas E&P raised $6.1 million from retail investors by offering and selling interests in joint ventures formed to drill and operate two separate oil well projects. Contrary to representations made to investors, Plummer allegedly spent nearly $400,000 of these investor funds improperly for personal or improper business expenses, including entertainment, travel, retail expenses, and income taxes… Read More

Penalties: $88,780,861.00
Respondent: State Street Bank and Trust Company
Violation: From 1998, and lasting into 2015, State Street overcharged its mutual fund clients and other registered investment companies (together, “RICs”) for certain reimbursable expenses, and reflected those overcharges in records of RIC clients. State Street acted as a custody bank for RICs. State Street entered into contracts with its RIC clients providing that State Street would bill them for out-of-pocket expenses that State Street incurred in providing services to the RICs… Read More

Penalties: $50,000.00
Respondent: IFS Securities
Violation: These proceedings involve a violation of the Municipal Securities Rulemaking Board’s (“MSRB”) “fair dealing” rule by Respondent in connection with a municipal bond offering. In 2014, Respondent was engaged by the Harvey, Illinois Public Library District (the “District”) to underwrite the issuance of a $6,000,000 offering of municipal bonds… Read More

Penalties: $1,988,351.00
Respondent: Matthew A. Krimm, et al
Violation: Krimm and KFS falsely claimed that they owned and operated their own highly successful mortgage loan business when, in fact, Krimm and KFS operated no mortgage lending business of their own. The Complaint further stated that Krimm and KFS used over 75% of the money from new investors to pay Krimm’s personal expenses and to make Ponzi-like payments to prior investors… Read More

Penalties: $792,207.00
Respondent: Rajeshwar R. Gannamaneni; Deepthi Gandra; Linga R. Gannamaneni
Violation: Gannamaneni worked as an IT contractor at the Singapore branch of an investment bank and that he used nonpublic information about impending mergers, acquisitions, and tender offers involving the investment bank’s clients to trade in advance of at least 40 corporate events. According to the complaint, the illicit trading was conducted in Gannamaneni’s own name and in accounts in the names of his wife Deepthi Gandra, his father Linga Rao Gannamaneni, and another family member… Read More

Penalties: $70,000.00
Respondent: R. Gordon Jones
Violation: Jones failed to comply with GAAP in determining the accounting treatment of the company’s most significant transactions. His actions resulted in the company improperly recording on its books and records and reporting in its financial statements a purported $44 million “Construction in Progress” asset, instead of allocating almost the entirety of that amount to goodwill. The asset comprised 56% and 51% of the company’s reported assets in the financial statements included in the company’s Form 10-Q for the third quarter of 2013, filed in November 2013, and its 2013 Form 10-K, filed in March 2014, respectively… Read More

Penalties: $70,000.00
Respondent: Johnny R. Thomas, et al.
Violation: Four former executives of Blue Earth Inc., a now-bankrupt alternative and renewable energy services company, stemming from their participation in disclosure and accounting fraud. Blue Earth’s former executives, Johnny R. Thomas, John C. Francis, Jonathan Brett Woodard, and Robert C. Potts, defrauded investors by materially misrepresenting the company’s scope of business operations and financial condition. From at least March 2014 until at least March 2015, the defendants allegedly repeatedly misrepresented the certainty and status of Blue Earth’s construction, ownership, and operation of seven combined-heat-and-power plants… Read More

Penalties: $179,000.00
Respondent: Robert F.X. Sillerman
Violation: Function(x), Inc., formerly an online publishing and entertainment business, incurred significant losses during the first quarter of 2017. To raise capital and fund its operations, Function(x) completed a public securities offering in February 2017, which brought in $4.8 million from investors. The complaint alleges that Sillerman fraudulently diverted $500,000 of the offering proceeds to repay certain loans he had made to Function(x)… Read More

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