Financial Enforcement Actions | Week of March 14 to March 20

Enforcement Report Mar 14 - 20

Enforcement Report Mar 14 - 20

FTC

2 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Health Center Inc.
Violation: Defendants engaged in their unlawful acts and practices repeatedly and unabated over a period of at least four years and continued their unlawful conduct despite having knowledge of numerous complaints. Defendants’ unlawful acts and practices were the subject of a September 2016 law enforcement action by the Iowa Attorney General, yet Defendants continued to engage in such practices until August 31, 2019, more than a year after being notified of the FTC’s investigation. Based on the facts and violations of law alleged in this Complaint, the FTC has reason to believe that Defendants are violating or are about to violate laws enforced by the Commission… Read More

Penalties: N/A
Respondent: Danaher Corporation
Violation: Sartorius further agrees that it will not object to the Commission’s right to seek the same relief against Sartorius for violation of Paragraph X (Prior Notice and Prior Approval) of the Decision and Order that the Commission can seek against any Respondent for violation of an Order issued by the Commission… Read More

FINRA

18 Enforcement Documents

$405,324.06 in Fines

Penalties: $75,000.00
Respondent: MML Investors Services, LLC
Violation: From March 2017 through March 2018 (the “Relevant Period”), MML failed to prevent certain registered and associated persons who had been terminated from the Firm from continuing to access customer records and information, including nonpublic personal information, in violation of the SEC’s Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information (“Regulation S-P”) and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Sofia T. Gonzalez
Violation: In January 2019, Gonzalez sent Firm customers JP and EC cashier’s checks in the amounts of $511 and $722, respectively, in order to reimburse them for losses sustained in connection with their purchase and sale of certificates of deposit (“CDs”). By sending JP and EC a total of $1,234 of her personal funds, Gonzalez shared in losses sustained by Firm customers, in violation of FINRA Rules 2150(c) and 2010… Read More

Penalties: $160,000.00
Respondent: Citigroup Global Markets Inc.
Violation: In the period from October 1, 2014 through August 4, 2017, the firm failed to transmit at least 1,714,788 Reportable Order Events (“ROEs”)1 to to the Order Audit Trail System In the period from June 11, 2012 through August 4, 2017, the firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules relating to OATS and trade reporting. This conduct violated NASD Rule 3010 (for conduct on or before November 30, 2014), FINRA Rule 3110 (for conduct on and after December 1, 2014) and FINRA Rule 2010… Read More

Penalties: $67,000.00
Respondent: Bay Crest Partners, LLC
Violation: The firm failed to properly qualify and register its Chief Compliance Officer (“CCO”) as a Securities Trader Principal, failed to implement reasonably designed market access controls, and failed to publish accurate information about its order routing practices. As a result, the firm violated NASD Rule 1022(a)(6), Rules 15c3-5 and 606, which the SEC promulgated under the Securities Exchange Act of 1934 (“Rule 15c3-5” and “Rule 606”), FINRA Rule 2010, and related supervisory requirements, during the period December 17, 2016 through June 1, 2018 (the “review period”)… Read More

Penalties: N/A
Respondent: Rodney Welsh
Violation: Welsh refused to give on-the-record testimony as requested by FINRA staff pursuant to FINRA Rule 8210. As a result, he violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Taylor C. Hoskins
Violation: Hoskins, after becoming registered through another FINRA member firm, improperly used MML login credentials to access MML’s third-party system for storing customer records and information, and then downloaded and printed nonpublic personal customer information from that system to assist him with transitioning customers to his new firm. As a result, Hoskins violated FINRA Rule 2010… Read More

Penalties: N/A
Respondent: James Blake Daughtry
Violation: While associated with Aegis, Afanador willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to disclose that he had been charged with, and pled guilty to, felonies, in violation of Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: $10,000.00
Respondent: Scott Patrick Kozak
Violation: Between 2011 and 2014, Kozak participated in three sets of private securities transactions without providing prior written notice to his member firm, collectively soliciting twelve firm customers and three Cetera registered representatives to invest $1,166,000 in the securities of two companies, in violation of NASD Rule 3040 and FINRA Rule 2010… Read More

Penalties: $27,500.00
Respondent: Pluris Capital Group, Inc. John Fletcher
Violation: In August 2017, Fletcher, on behalf of Pluris, negligently signed two documents containing false statements Fletcher knew that those documents would be submitted to a court to obtain judicial confirmation that securities issued in exchange for the satisfaction of claims against two companies would be deemed exempted securities under Section 3(aX10) of the Securities Act of 1933 (“Securities Act”) and thus generally not subject to the registration requirements of Section 5 of the Securities Act. Respondents’ conduct contravened Section 17(a)(2) of the Securities Act, thereby violating F1NRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Tishon Lamon Afanador
Violation: While associated with Aegis, Afanador willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to disclose that he had been charged with, and pled guilty to, felonies, in violation of Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: $5,000.00
Respondent: Andre Derricotte
Violation: On August 22, 2019, Derricotte sat for the Uniform Combined State Law Examination (Series 66), during which he possessed and accessed unauthorized materials, including personal notes, writing instruments, and a cellular phone, On September 16, 2019, Derricotte sat for the Uniform Investment Adviser Law Examination (Series 65), during which he also possessed and accessed unauthorized materials, including personal notes and a writing instrument. Derricotte’s possession of, and access to, unauthorized materials during the Series 66 and Series 65 examinations violated FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Quincy D. Caldwell
Violation: Between February 2014 and September 2018, Caldwell recommended and effected 119 unsuitable short-term trades in Class A mutual fund shares in six customer accounts, including 22 mutual fund switches in three of those accounts. Based on the foregoing, Caldwell violated FINRA Rules 2111 and 2010… Read More

Penalties: $7,500.00
Respondent: Caleb Austin Jamison
Violation: In July 2017, Jamison participated in a private securities transaction without providing prior written notice to his firm, in violation of FINRA Rules 3280 and 2010… Read More

Penalties: $10,000.00
Respondent: Frederic O’Hara
Violation: Between October 2009 and May 2012, O’Hara engaged in an outside business activity by serving as an outside director of a private company (“Company 1”) without providing prior written notice to his broker-dealer employers in violation of NASD Rule 3030, for conduct before December 15, 2010, FINRA Rule 3270, for conduct on or after December 15, 2010, and FINRA Rule 2010… Read More

Penalties: $13,324.06
Respondent: Peter Orlando
Violation: Unethically exploited a senior customer for financial reasons, made an unsuitable recommendation to the customer, and inappropriately maintained in his files two forms that the customer signed in blank… Read More

Penalties: $10,000.00
Respondent: Frederic O’Hara
Violation: Between October 2009 and May 2012, O’Hara engaged in an outside business activity by serving as an outside director of a private company (“Company 1”) without providing prior written notice to his broker-dealer employers in violation of NASD Rule 3030, for conduct before December 15, 2010, FINRA Rule 3270, for conduct on or after December 15, 2010, and FINRA Rule 2010… Read More

SEC

11 Enforcement Documents

$1,394,923.00 in Fines

Penalties: $122,419.00
Respondent: Hologram USA Networks Inc. and Alkiviades
Violation: Purported to stage holographic shows featuring the likenesses of famous deceased performers, and David, its founder, Chairman, and CEO, made materially false and misleading representations to investors and potential investors about Hologram’s business… Read More

Penalties: N/A
Respondent: Meta 1 Coin Trust, et al.
Violation: Meta 1 Coin Trust, Dunlap, Bowdler, and Schmidt with violating antifraud and securities registration provisions of the federal securities laws… Read More

Penalties: $25,000.00
Respondent: Brandon E. Copeland and E.B. & Copeland Capital, Inc
Violation: The complaint charges Copeland with willfully violating Section 203(f) of the Advisers Act by associating with an investment adviser in violation of the bar in the Commission Order, violating his cease-and-desist order, and failing to pay the ordered $25,000 civil penalty… Read More

Penalties: $1,247,504.00
Respondent: Scott O. Hirsch and Kenneth L. Friedman
Violation: The SEC’s complaint alleges that Scott O. Hirsch and Kenneth L. Friedman, both Delray Beach, Florida residents, were tipped material, nonpublic information by an acquaintance who was then a senior manager of PetMed and a member of PetMed’s management committee… Read More

Penalties: N/A
Respondent: Barry Honig, et al
Violation: Violations of registration provisions of Sections 5(a) and (c) of the Securities Act of 1933, and ownership reporting provisions of Sections 13(d) and 16(a) of the Securities Exchange Act of 1934 and Rules 13d-2(a) and 16a-3 thereunder… Read More

Penalties: N/A
Respondent: Denis Georgiyevich Sotnikov, et al.
Violation: The SEC’s complaint, filed in federal court in the District of New Jersey, charges Sotnikov, Adaptive Technology LLC, AGQ Business Group LLC, ATL Business Group LLC, BO&SA Corp., DN Industrial LLC, and Expert Digital LLC with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sotnikov with aiding and abetting those violations… Read More

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