Financial Enforcement Actions | Week of March 21 to March 27

Enforcement Report Mar 21 - 27

Enforcement Report Mar 21 - 27

FTC

4 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Strategic Student Solutions
Violation: Charged people illegal upfront fees and falsely promised to reduce their student loan debt or monthly payments by enrolling them in student loan forgiveness or other programs... Read More

Penalties: N/A
Respondent: Federal-Mogul Motorparts LLC
Violation: made unsubstantiated claims that its aftermarket Wagner OE brake pads could stop a vehicle in a shorter distance in an emergency and reduce the risk of collisions, as compared to competitors’ brake pads... Read More

Penalties: N/A
Respondent: Telestar Consulting
Violation: charged organizations for products they did not order. When recipients challenged the invoices or did not pay promptly, the company threatened to send them to “collections... Read More

UK-FCA

4 Enforcement Documents

£64,800.00 in Fines

Penalties: N/A
Respondent: Awesome3 Limited
Violation: Awesome3 does not meet the conditions set out in Regulations 14(7) and 14(10)... Read More

Penalties: £23,400.00
Respondent: Lloyd Arnold Pope
Violation: Failed to take reasonable steps to ensure that TMI assessed the suitability of the underlying product within the SIPP for the customer during the Relevant Period... Read More

Penalties: £41,400.00
Respondent: Robert Ian Shaw
Violation: Mr Shaw failed to take reasonable steps to ensure that the business of TMI, for which he was responsible in his controlled function, complied with the relevant requirements and standards of the regulatory system... Read More

FINRA

17 Enforcement Documents

$507,929.62 in Fines

Penalties: $25,000.00
Respondent: Merrimac Corporate Securities, Inc.
Violation: Failed to maintain a reasonable supervisory system and adequate written supervisory procedures, in violation of NASD Rules 3010 and 2110, and FINRA Rule 2010... Read More

Penalties: $12,730.01
Respondent: Louis Ottimo
Violation: Fraudulently omitted material information in his private placement memorandum (“PPM”) biography in the offer and sale of securities, in violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), Exchange Act Rule 10b-5, and FINRA Rules 2020 and 2010... Read More

Penalties: $5,226.61
Respondent: Linda C. Milberger
Violation: Respondent falsified customer wire request forms, provided false documents to her firm during an investigation, and provided a false document to FINRA in response to a request for information... Read More

Penalties: $45,000.00
Respondent: Arive Capital Markets, LLC
Violation: During the period October 27, 2015 through March 8, 2016 (the "Relevant Period"), Arive failed to develop and implement an anti-money laundering program ("AIVILCP") reasonably designed to achieve and monitor the Firm's compliance with requirements of the Bank Secrecy Act and the implementing regulations thereunder... Read More

Penalties: N/A
Respondent: Steven D. Rodemer
Violation: In March 2020, Rodemer refused to provide on-the-record testimony requested by FINRA pursuant to FINRA Rule 8210, thereby violating PIMA Rules 8210 and 20110... Read More

Penalties: $10,000.00
Respondent: Ameritas Investment Company, LLC
Violation: Between February 10, 2018 and August 20, 2018 (the "Relevant Period"), Ameritas provided underwriting services for a municipal issuer with which it had an active "blanket" financial advisory agreement, and thereby acted simultaneously as the issuer's financial advisor and its underwriter. Through this conduct, Ameritas violated MSRB Rule G-23... Read More

Penalties: $300,000.00
Respondent: Morgan Stanley Smith Barney LLC
Violation: From July 1, 2015 to December 31, 2018, Morgan Stanley failed to timely report a total 1,068 fixed income transactions, 609 of which qualify as a large block transaction, to TRACE or the Real-time Transaction Reporting System ("RTRS")... Read More

Penalties: $5,000.00
Respondent: Jennifer L. Basey
Violation: On two separate occasions between July 2019 and October 2019, while associated with Edward Jones, Basey falsified one customer’s signature and forged two customers’ initials on Firm paperwork used to facilitate her customers’ transfers of funds, in violation of FINRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Charles Henry Postel
Violation: During the period of October 31, 2017 through February 13, 2018 (the “Relevant Period”), Stifel’s Policies and Procedures Manual required its registered representatives to obtain written acknowledgements from the firm’s customers and written approval from the Firm before engaging in agency cross transactions between the Firm’s customers... Read More

Penalties: $100,000.00
Respondent: First Manhattan Co.
Violation: Respondent violated MSRB Rules G-17 and G-30 on seven occasions by failing to purchase municipal securities for its customers at prices that were fair and reasonable in relation to prevailing market conditions. Respondent also violated MSRB Rule G-27 by failing to adopt, maintain, and enforce written supervisory procedures reasonably designed to achieve compliance with MSRB Rule G-30... Read More

Penalties: N/A
Respondent: Dana Bruce Vietor
Violation: Between January 1, 2014 and November 11, 2018 ("Relevant Period"), Vietor engaged in the sale of promissory notes called "Deposit Agreements" in connection with at least 40 customers totaling more than $3 million... Read More

SEC

25 Enforcement Documents

$541,479,219.70 in Fines

Penalties: $236,314‬.00
Respondent: Joe Leland Tarver, Rock and Roll Cycles, LLC, and Cycle for Life, Inc.
Violation: According to the complaint, from about July 2014 through December 2017, Tarver and his companies raised approximately $491,000 from at least 18 investors in the form of promissory notes issued by RRC and CFL, promising annual returns of between 6% and 9.6%. The SEC alleges that, instead of using the investments to manufacture tricycles, Tarver diverted a significant amount to pay his personal expenses and used new investor funds to pay returns to existing investors. He also allegedly failed to disclose lawsuits brought by earlier investors for failing to repay their promissory notes... Read More

Penalties: $1,281,319.00
Respondent: Kendricks, et al., Hamed A. Ettu
Violation: The SEC's complaint, filed on August 29, 2018, alleged that Kendricks received illegal tips from codefendant Damilare Sonoiki, an analyst at an investment bank, about several upcoming corporate mergers. Kendricks traded on this information for a profit of approximately $1.2 million. On November 2, 2018, the SEC filed a related complaint against Ettu, a family friend of Sonoiki, alleging that he also traded based on information that he received from Sonoiki concerning two upcoming corporate acquisitions for a profit of approximately $93,000. The final judgments against Kendricks and Ettu permanently enjoin them from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder... Read More

Penalties: N/A
Respondent: Todd Lahr and Thomas Megas
Violation: The SEC's complaint alleges that for the better part of three years ending 2017, Lahr and Megas targeted clients of Lahr's law practice to raise funds for several Megas-led business ventures, including mining operations in Papua New Guinea and real estate investments in Barcelona and London. Instead, Lahr and Megas allegedly used investor funds to pay earlier investors and for various personal expenses, including Lahr's mortgage payments and credit card bills and Megas' restaurant bills and ATM withdrawals. The SEC's complaint, filed in the U.S. District Court for the Eastern District of Pennsylvania, charges Lahr and Megas with violating the antifraud and registration provisions of Sections 5(a) and (c), and 17(a)(1) and (3), of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rules 10b-5(a) and (c) thereunder... Read More

Penalties: N/A
Respondent: Justin W. Keener d/b/a JMJ Financial
Violation: The SEC's complaint, filed in federal court in Miami, Florida, alleges that between January 2015 and January 2018, Keener engaged in the business of purchasing convertible notes from penny stock issuers, converting the notes into shares of stock at a large discount from the market price, and selling those newly issued shares into the market at a significant profit. Keener allegedly purchased convertible notes from more than 100 separate issuers and sold more than 17.5 billion shares of newly issued penny stock into the market, generating over $21.5 million in profits. As alleged, Keener was not registered as a dealer with the SEC, in violation of the mandatory registration provisions of the federal securities laws. By failing to register, Keener avoided certain regulatory obligations for dealers that govern their conduct in the marketplace, including regulatory inspections and oversight, financial responsibility requirements, and maintaining books and records... Read More

Penalties: N/A
Respondent: Donald H. Hunter,
Violation: The complaint alleges that Hunter had acquired the company's shares personally or through companies he controlled, but as a result of the FINRA bar he was unable to sell them directly or indirectly to brokerage customers, as he had in the past. The complaint further alleges that Hunter failed adequately to disclose that the fund purchased the shares from Hunter or entities he controlled, or that he set the prices at which he sold those shares to the fund. The complaint alleges that Hunter violated the antifraud provisions of Sections 206(1), 206(2), 206(3), and 206(4) of the Investment Advisers Act and Rule 206(4)-8 thereunder... Read More

Penalties: N/A
Respondent: Bernard Findley and Halitron, Inc.,
Violation: The press releases allegedly included false and misleading descriptions of a purported financing arrangement that Halitron had in place, and falsely claimed that Halitron was implementing a stock buyback program. Findley allegedly misappropriated a majority of the money Halitron received from the financiers by using those funds to cover personal expenses and pay off personal credit card debt. The SEC's complaint, filed in federal district court in Connecticut, charges Findley and Halitron 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 seeks disgorgement of ill-gotten gains plus prejudgment interest, penalties, and injunctive relief. T... Read More

Penalties: $18,906,903.52
Respondent: Anthony B. Brandel and M.Y. Consulatants , Inc.
Violation: Respondent M.Y. Consultants, finding that it violated Sections 5 and 17(a) of Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled SEC v. Malom Group AG, et al.; 2:13-cv-2280, in the U.S. District Court for the District of Nevada. On June 29, 2017, a final judgment was entered against Respondent Brandel, finding that he violated Sections 5 and 17(a) of Securities Act and Sections 15(a) and 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled SEC v. Malom Group AG, et al.; 2:13-cv-2280, in the U.S. District Court for the District of Nevada. The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Anthony B. Brandel (“Respondent Brandel”) and M.Y. Consultants, Inc. (“Respondent M.Y. Consultants”) (collectively “Respondents”)... Read More

Penalties: $11,271,704.00
Respondent: Nicholas J. Genovese
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Nicholas J. Genovese (“Respondent” or “Genovese”)... Read More

Penalties: $1,773,549.00
Respondent: EZTD Inc
Violation: On November 10, 2016, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”)1 against EZTD Inc. (the “Respondent”). In the Order, the Commission found that between June 2001 and August 2014, the Respondent made offers and sales of binary options to U.S. customers through two online trading platforms, eztrader.com and globaloption.com. These binary options constituted securities under the federal securities laws. The Respondent, however, failed to register any of its offers and sales of binary options with the Commission and it failed to register with the Commission as a broker-dealer... Read More

Penalties: $500,000,000.00
Respondent: Wells Fargo & Company
Violation: The Division of Enforcement (“Division”) has requested an extension of time until October 30, 2020 to submit a Proposed Plan of Distribution under Rule 1101(a) of the Commission’s Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1101(a). On February 21, 2020, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”)1 against Wells Fargo & Company (the “Respondent”)... Read More

Penalties: $8,000,000.00
Respondent: DeVere USA, Inc.,
Violation: Notice is hereby given, pursuant to Rule 1103 of the United States Securities and Exchange Commission’s Rules on Fair Fund and Disgorgement Plans (“Commission’s Rules”), 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a proposed plan of distribution (the “Plan”) for the distribution of monies paid in the abovecaptioned matter. On June 4, 2018, the Commission issued an Order Instituting Administrative and Ceaseand-Desist Proceedings, Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”)1 against DeVere USA, Inc. (the “Respondent”)... Read More

Penalties: $186,661.00
Respondent: David M. Mahan
Violation: The complaint alleges that, the next morning, Mahan sold all of his Rite Aid stock and exercised and sold all of his available Rite Aid employee stock options. On January 20, 2017, a news article citing multiple sources reported that Federal Trade Commission (FTC) officials likely would not approve the merger by the deadline. Rite Aid's stock price fell, closing approximately 13% lower than the prior day's closing price. The complaint alleges that, by selling his Rite Aid stock and exercising and selling his Rite Aid stock options before the FTC's concerns became public, Mahan avoided a loss of over $87,000. The SEC's complaint, filed in federal court in the Middle District of Pennsylvania, charges Mahan with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder... Read More

Penalties: $10,000.00
Respondent: Adam Matthew Root
Violation: According to the complaint, between at least February 2016 and January 2017, Root made material misstatements and omissions related to several issues, including the amount and nature of investments that had been "committed" by others to the funds, the number of startup companies that Tricent had invested in or deployed capital to, the nature of the returns obtained from the sale of a company, and the "patent pending" status of Tricent's investment model. Ultimately Root was never successful in raising any money for Tricent's investment funds. The SEC's complaint, which was filed in federal court in Texas, charges Root with violating antifraud provisions Section 17(a)(1) and 17(a)(3) of the Securities Act of 1933... Read More

Penalties: $49,083.15
Respondent: Benjamin Kirkland
Violation: As a result of the conduct described above, Kirkland violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in connection with the purchase or sale of securities... Read More

Penalties: N/A
Respondent: Endless Charge, Inc.
Violation: The Securities and Exchange Commission (“Commission”) deems it necessary and appropriate for the protection of investors that proceedings be, and hereby are, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”) against Endless Charge, Inc.(“Endless Charge” or “Respondent”)... Read More

Penalties: N/A
Respondent: PositiveID Corporation,
Violation: The Securities and Exchange Commission (“Commission”) deems it necessary and appropriate for the protection of investors that proceedings be, and hereby are, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”), against PositiveID Corporation (“PSID” or “Respondent”)... Read More

Penalties: N/A
Respondent: Bryan Cohen
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Bryan Cohen (“Respondent”)... Read More

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