Financial Enforcement Actions | Week of Mar 03 to Mar 08

Weekly Enforcement Action Tracker

UK-FCA

1 Enforcement Document

£0.00 in Fines

Penalties: N/A
Respondent: LBO France Gestion
Violation: It appears to the Authority that LBO is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that LBO is a fit and proper person having regard to all the circumstances, including whether LBO managed its business in such a way as to ensure that its affairs were conducted in a sound and prudent manner… Read More

FINRA

13 Enforcement Documents

$2,554,494.50 in Fines

Penalties: $20,000.00
Respondent: Great Point Capital LLC
Violation: In Review No. 20160519335, the OATS Compliance Team of the Department of Market Regulation (the “staff’) reviewed the firm’s compliance with OATS reporting requirements during the period July 1, 2016 through September 30, 2016 (the “3Q16 review period”). In Review No. 20170530034, the staff reviewed the firm’s compliance with OATS reporting requirements during the period September 1, 2016 through December 31, 2016 (the “3T16 review period”)… Read More

Penalties: N/A
Respondent: Raymond Keith Malicki
Violation: Malicki refused to appear for on-the-record testimony requested pursuant to FINRA Rule 8210 on the scheduled date or at any time. fly refusing, to provide on-the-record testimony as requested pursuant to l’INRA Rule 8210. Malieki violates FINRA Rules 8210 and 2010… Read More

Penalties: $6,068.50
Respondent: Jim Jinkook Seol
Violation: Registered representative participated in undisclosed private securities transactions, engaged in undisclosed outside business activities, and provided false statements on his firm’s annual compliance questionnaires in response to questions concerning the private securities transactions and outside business activities… Read More

Penalties: $2,000,000.00
Respondent: Cantor Fitzgerald & Co.
Violation: Cantor’s failure to act timely to remediate these issues, and to establish and maintain reasonable supervisory systems and procedures, resulted in short selling activity that violated SEC Rule 204. Specifically, Cantor: did not timely close-out FTDs on at least 4,879 occasions in violation of SEC Rule 204(a) routed and/or executed short sales in securities for which it had open FTDs during the period of January 2013 to October 2014 in violation of SEC Rule 204(b) did not issue notice to those broker-dealers from which it received trades for clearance and settlement that a pre-borrow was required, as required by SEC Rule 204(c)… Read More

Penalties: $154,001.00
Respondent: Andrew Kramer, Michael Boswell and TriPoint Global Equities, LLC
Violation: During the period November 2011 through December 2015 (the “Relevant Period”), TriPoint Global Equities, LLC (“TriPoint” or the “Firm”) engaged in the penny stock business, effecting transactions for customers whose primary trading activity involved the deposit and prompt liquidation of low-priced securities (also known as “penny stocks” or “microcap stocks”)… Read More

Penalties: N/A
Respondent: Derek Allen Sunderland
Violation: At two points in time in April 2016 and March 2018, Sunderland, while a supervisor at Questar, falsified certain firm records to create the appearance that he had reviewed the records as part of his supervisory review. He also provided those falsified records to Questar knowing that they would be provided, as if they were genuine documents, to FINRA in response to Rule 8210 requests sent to the Firm. And, on June 28, 2018, Sunderland gave false and misleading testimony about the records in his on-the-record interview with FINRA. By falsifying firm records, Sunderland violated FINRA Rule 2010. By causing the Firm to maintain inaccurate books and records, Sunderland violated FINRA Rules 4511 and 2010. By falsifying documents he knew would be provided to FINRA and giving false and misleading testimony, Sunderland violated FINRA Rules 8210 and 2010… Read More

Penalties: $100,000.00
Respondent: Sigma Financial Corporation
Violation: From May 22, 2014 through December 31, 2016 (the “Relevant Period”), Sigma failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to achieve compliance with securities laws, regulations, and FINRA Rules applicable to the sales of leveraged, inverse, and inverse-leveraged exchange-traded funds (“Non-Traditional ETFs”). As a result, Sigma violated FINRA Rules 3110 and 2010 and NASD Rule 3010. These violations were aggravated by the fact that Sigma represented to FINRA that it would implement specific corrective measures to cure these deficiencies, but failed to implement the measures in the time-frame anticipated by FINRA based on Sigma’s representations… Read More

Penalties: $20,000.00
Respondent: Parkland Securities, LLC
Violation: From May 22, 2014 through December 31, 2016 (the “Relevant Period”), Parkland failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to achieve compliance with securities laws, regulations, and FINRA Rules applicable to the sales of leveraged, inverse, and inverse-leveraged exchange-traded funds (“NonTraditional ETFs”). As a result, Parkland violated FINRA Rules 3110 and 2010 and NASD Rule 3010. These violations were aggravated by the fact that Parkland represented to FINRA that it would implement specific corrective measures to cure these deficiencies, but failed to implement the measures in the time-frame anticipated by FINRA based on Parkland’s representations… Read More

Penalties: $7,500.00
Respondent: Emanuel Omar Avina (“Avina”)
Violation: Between January and June 2017 (the “Relevant Period”), while associated with a FINRA member, Avina impersonated six Ameriprise customers during eight telephone calls made to Ameriprise’s customer service center. During the phone calls, Avina acted as the customers for the purposes of liquidating securities, transferring money, obtaining account information, and requesting copies of checks. Avina carried out all of the impersonations in order to facilitate underlying transactions and requests that the customers had authorized and wanted executed. By impersonating six customers, Avina violated FINRA Rule 2010… Read More

Penalties: TBD
Respondent: ProEquities, Inc.
Violation: Between January 1, 2011, and March 2016, (the “Relevant Period”), ProEquities disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares it certain mutual funds without a front-end 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. During this period, ProEquities failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, ProEquities violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and MIRA Rule 2010… Read More

Penalties: N/A
Respondent: Donovan S. Hunter
Violation: Hunter refused to provide information requested by FINRA staff pursuant to FINRA Rule 8210. Hunter thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $60,000.00
Respondent: Halifax America, LLC
Violation: Between December 2014 and May 2015, Halifax America made misleading statements to FINRA in connection with its application for registration as a new FINRA member in violation of FINRA Rules 1122 and 2010. Between May and October 2015, Halifax America permitted an unregistered person to engage in securities activities requiring registration in violation of NASD Rule 1031 and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Paul N. Gershon
Violation: In June 2018, Gershon exercised discretionary trading authority in 29 customer accounts without written authorization in violation of NASD Rule 2510(b) and FINRA Rule 2010… Read More

Penalties: $189,425.00
Respondent: Richard Wayne Demetriou, Brad C. Brooks, and Titan Securities
Violation: Demetriou made false or misleading misrepresentations of fact in three widely distributed emails to 36 current and former customers. Demetriou is liable on the first cause of action and ordered to pay restitution in the amount of $84,425, plus prejudgment interest… Read More

FTC

2 Enforcement Documents

$7,000,000.00 in Fines

Penalties: $7,000,000.00
Respondent: Advertising Strategies, LLC
Violation: The defendants cold-call consumers and urge them to buy or invest in e-commerce websites, or websites that link to popular e-commerce websites, such as Amazon.com. The defendants falsely promise lavish returns and assure skeptical consumers that their investment is “risk-free” or that it comes with a “100 percent money back guarantee… Read More

Penalties: TBD
Respondent: Elite IT Partners, Inc.
Violation: Utilized fake computer diagnostics and misleading, false, and unsubstantiated statements that scare consumers into believing that computer viruses have hijacked their computers, exposing their personal and financial information to hackers… Read More

SEC

15 Enforcement Documents

$106,447,776.00 in Fines

Penalties: $302,483.00
Respondent: William C. Gennity and Rocco Roveccio
Violation: From July 2012 to August 2014, William C. Gennity recommended to four customers a pattern of high-cost, in-and-out trading without any reasonable basis to believe that his customers could make a profit… Read More

Penalties: TBD
Respondent: MinTrade Technologies, LLC, Carla Marin
Violation: The SEC subpoenas seek documents from MinTrade, and documents and testimony from Marin, related to activities conducted by a foreign-based broker-dealer and its principal concerning potential violations of the federal securities laws involving solicitation of U.S.-based customers and the movement of customer funds… Read More

Penalties: N/A
Respondent: William C. Gennity
Violation: During the period from July 2012 to August 2014, Gennity recommended to four customers – Customers 1 through 4 – a pattern of high cost, in-and-out trading without any reasonable basis to believe that his recommendations were suitable for anyone… Read More

Penalties: $360,540.00
Respondent: Rong Chen, et al.
Violation: Shortly before the deal was made public, Chen opened a brokerage account in his wife’s name and used it to make a series of purchases of RDA securities, generating more than $75,000 in illicit profits… Read More

Penalties: N/A
Respondent: Raymond K. Montoya
Violation: From at least 2009 to around June 2017, Montoya engaged in a scheme to defraud investors in the RMA Fund of millions of dollars. Montoya made fraudulent representations to investors concerning the RMA Fund and its performance, represented to investors that he would invest their money in stocks and bonds while diverting millions of dollars to business and personal accounts and using it to pay for personal expenses, and sent fabricated account statements to investors using the United States mails… Read More

Penalties: $5,709,753.00
Respondent: BB&T Securities, LLC
Violation: From at least 2013 to 2016 (the “Relevant Period”), Valley Forge made misleading statements in its Forms ADV Part 2A and investment advisory contracts with clients regarding the services and prices offered by its in-house broker that led numerous clients to choose Valley Forge for brokerage services over other significantly less expensive options… Read More

Penalties: $100,000,000.00
Respondent: Mobile TeleSystems PJSC
Violation: From 2004 to at least 2012, MTS offered and paid bribes in violation of Section 30A of the Exchange Act, to a government official in Uzbekistan in connection with its Uzbek operations… Read More

Penalties: $75,000.00
Respondent: Goldsky Asset Management, LLC and Kenneth Grace
Violation: Goldsky’s Forms ADV for 2016 and 2017, which Grace signed, falsely stated that Goldsky’s hedge fund, Goldsky Global Alpha Fund, LP, had an auditor, a prime broker and custodian, and an administrator… Read More

Penalties: N/A
Respondent: Ascension Asset Management, LLC and Grenville M. Gooder, Jr.
Violation: Accordingly, notice is hereby given, pursuant to Rule 360(d) of the Commission’s Rules of Practice, that the initial decision of the administrative law judge has become the final decision of the Commission with respect to MarilynJean Interactive Inc… Read More

Penalties: N/A
Respondent: Lewis Dean Mcbride
Violation: From 2005 to 2010, McBride knowingly and willfully misappropriated funds that CFA’s investment advisory clients had entrusted to him for investment, in violation of Section 203(e)(2)(C) of the Advisers Act… Read More

Penalties: N/A
Respondent: John Gregory Schmidt
Violation: Between 2003 and October 2017, Respondent Schmidt misappropriated over $1.16 million from accounts belonging to seven of his retail brokerage customers and transferred that cash to at least ten other customers whose accounts were experiencing shortfalls… Read More

NEW eBook: Methods for Improving Compliance Risk Management Check It Out

X