Financial Enforcement Actions | Week of Mar 24 to Mar 29

Financial Enforcement Actions | Week of Mar 24 to Mar 29

Regulatory Agency Updates | Week of March 18 - 25

FINRA

10 Enforcement Documents

$380,289.00 in Fines

Morgan Stanley

Penalties: N/A
Respondent: Ellen J. Donnelly
Violation: In August 2016, while registered with Morgan Stanley, Donnelly borrowed $30,000 from one of her brokerage customers without seeking or obtaining the Firm’s pre-approval in violation of FINRA Rules 3240 and 2010… Read More

Penalties: $340,289.00
Respondent: Kim K. Kopacka and Beth A. Debouvre
Violation: By permitting and enabling a statutorily disqualified and barred person to conduct a securities business through member firms and otherwise engaging in an unethical course of conduct as described above, Ms. Kopacka and DeBouvre violated NASD Rule 2110 (for conduct occurring before December 15, 2008) and FINRA Rule 2010 (for conduct occurring on or after December 15, 2008)… Read More

Penalties: N/A
Respondent: Sarah L. Banon
Violation: FINRA requested that Banon appear for on-the-record testimony in connection with an ongoing FINRA investigation. Banon declined to appear for the requested testimony and stated that she would not participate further in FINRA’s investigation, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $15,000.00
Respondent: Stonecrest Capital Markets, Inc.
Violation: Stonecrest failed to report 40 transactions in TRACE-eligible securities in violation of FINRA Rules 6730(a) and 2010. The firm also failed to mark order tickets for numerous securities transactions as either “solicited” or “unsolicited,” in violation of SEC Rule 17a-3(a)(6)(i) and FINRA Rules 4511 and 2010… Read More

Penalties: N/A
Respondent: Sam Aziz
Violation: Aziz indicated that he would not appear for on-the-record testimony that was requested pursuant to FINRA Rule 8210. As a result, Aziz violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Sam Aziz
Violation: Aziz indicated that he would not appear for on-the-record testimony that was requested pursuant to FINRA Rule 8210. As a result, Aziz violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Robert L. Bryant Ill
Violation: Bryant forged signatures on updated New Account Documents for nine of his existing Firm customers in Violation of FINRA Rules 4511 and 2010, by causing the Firm to create and maintain inaccurate books and records in Violation of Section 17(a) of the Exchange Act and Rule 17a-3, promulgated thereunder… Read More

Penalties: $5,000.00
Respondent: Robert L. Bryant II
Violation: Bryant forged signatures on updated New Account Documents for nine of his existing Firm customers in Violation of FINRA Rules 4511 and 2010, by causing the Firm to create and maintain inaccurate books and records in Violation of Section 17(a) of the Exchange Act and Rule 17a-3, promulgated thereunder… Read More

Penalties: $5,000.00
Respondent: Scott Blake Mintz
Violation: From February 2016 through June 2017 (the “Relevant Period”), while associated with the Firm as a GSR, Mintz violated NASD Rule 2510(b) and FINRA Rule 2010 by engaging in discretionary trading in two of his Firm customers’ accounts on at least 27 occasions over 14 separate dates… Read More

Penalties: $10,000.00
Respondent: Prabir Purohit
Violation: Purohit improperly used Firm funds by altering business-related transportation receipts to make it appear as though rides he took were eligible for expensing under the Firm’s policy when they were not and submitting the altered receipts to the Firm to obtain reimbursement for those rides. As a result, Purohit violated FINRA Rule 2010… Read More

Goldman Sachs

Penalties: £34,344,700.00
Respondent: Goldman Sachs International
Violation: Failed to accurately report an estimated 204.1 million transactions (which should have been reported accurately in accordance with SUP 17.4.1 EU/SUP 17 Annex 1 EU)… Read More

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

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

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

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

Penalties: N/A
Respondent: American Veterans Foundation, Inc.
Violation: Falsely claiming that consumers’ donations would be used to help police officers and families of slain officers, provide life-saving equipment to law enforcement agencies, and provide advanced, specialized training for law enforcement officers and departments… Read More

Penalties: N/A
Respondent: “Disabled Police and Sheriffs Foundation, Inc.”
Violation: Falsely claiming that consumers’ donations would be used to help police officers and families of slain officers, provide life-saving equipment to law enforcement agencies, and provide advanced, specialized training for law enforcement officers and departments… Read More

Penalties: $35,000,000.00
Respondent: Office Depot, Inc.
Violation: The companies tricked customers into buying millions of dollars’ worth of computer repair and technical services by deceptively claiming their software had found malware symptoms on the customers’ computers… Read More

SEC

34 Enforcement Documents

$177,007,704.30 in Fines

Penalties: $170,000.00
Respondent: Neil Maxwell
Violation: Maxwell, among other things, obtained $170,000 from two of his elderly clients to acquire an unsuitable blockchain investment fund without adequately disclosing the nature and risks associated with the investment… Read More

Penalties: N/A
Respondent: Charles G. Stivers
Violation: Pursuant to Section 203(f) of the Advisers Act, that Respondent Stivers be, and hereby is barred from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization… Read More

Penalties: $14,525.00
Respondent: Karl R. Dierman
Violation: According to the sentencing order and criminal information, the forgery count for which Dierman was found guilty was premised on his forgery of a signature on a written instrument in September 2011 to wrongfully obtain loan proceeds against a life insurance policy owned by others… Read More

Penalties: $3,649,541.11
Respondent: Kevin D. Wanner
Violation: According to his plea agreement, the mail fraud count to which Wanner pleaded guilty was premised on his operation of a fraudulent scheme between 2000 and 2015 in which Wanner defrauded his investment clients out of more than $3 million by intentionally providing false information and counterfeit documents, including, but not limited to, sham account statements, tax documents, and account summaries, to create the appearance that certain investments were legitimate when, in fact, the investments did not exist… Read More

Penalties: $20,431,157.00
Respondent: Visium Asset Management, LP
Violation: Visium, through two of its portfolio managers, engaged in a mismarking scheme, using sham broker quotes to falsely inflate the value of securities held by a fund for which Visium acted as investment adviser (the “Credit Fund”). As a result, the Credit Fund reported falsely inflated returns, overstated its net asset value (“NAV”), misclassified certain distressed assets, and paid approximately $3.15 million in falsely charged performance and management fees… Read More

Penalties: $209,697.54
Respondent: Tiber Creek. and James M. Cassidy
Violation: Cassidy failed to file timely reports on Schedule 13G as required to disclose his fifty-percent ownership of each Tiber Creek public shell. It was not until September 2015, when Cassidy became aware of the investigation by the Commission’s staff, that he filed more than 45 delinquent reports on Schedule 13G. Those filings contain admissions that they were past due. In at least 40 instances, Cassidy’s ownership disclosure reports on Schedule 13G were more than one year late… Read More

Penalties: N/A
Respondent: Mullan Agritech, Inc., and Reliabrand, Inc.
Violation: The time for filing a petition for review of the initial decision in this proceeding has expired. No such petition has been filed by Mullan Agritech, Inc., or ReliaBrand, Inc., and the Commission has not chosen to review the decision on its own initiative… Read More

Penalties: $4,068,699.46
Respondent: Howard M. Appel
Violation: Appel has been convicted of a felony within the meaning of Rule 102(e)(2) of the Commission’s Rules of Practice… Read More

Penalties: $422,387.18
Respondent: Oscar Francis
Violation: Francis falsely represented that Mahum was affiliated with MML and that investments in Mahum would generate high rates of return. Francis misappropriated the funds he received, spending them on cocaine, alcohol, strip clubs, and luxury items. When investors inquired or complained about the status of their investments, Francis would obtain loans and use other investment funds to repay the investors to prevent them from reporting Francis’s activity to MML or to law enforcement… Read More

Penalties: $209,697.00
Respondent: James K. McKillop
Violation: McKillop and Cassidy failed to timely file required beneficial ownership reports, including Schedules 13G and Forms 4, in connection with the public shell companies… Read More

Penalties: $10,000.00
Respondent: James K. McKillop
Violation: Sections 15(b)(4) and 21 C of the Exchange Act, censured McKillop, and ordered him to cease and desist from committing or causing any violation or future violation of Section 15(a) of the Exchange Act… Read More

Penalties: $197,000.00
Respondent: First Southwest Company, LLC
Violation: First Southwest, a registered broker-dealer, municipal securities dealer and municipal advisor, willfully violated the fair dealing and financial advisory agreement rules of the Municipal Securities Rulemaking Board (“MSRB”) in connection with financial advisory services rendered by First Southwest to its municipal client, the Rhode Island Economic Development Corporation (“RIEDC”) (now known as the Rhode Island Commerce Corporation), relating to a private placement offering of municipal securities on October 22, 2010 (the “2010 bond issuance”)… Read More

Penalties: TBD
Respondent: Dennis Gibb and Sweetwater Investments, Inc.
Violation: Gibb and Sweetwater willfully violated Section 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in the offer or sale of securities and in connection with the purchase or sale of securities… Read More

Penalties: $147,000,000.00
Respondent: Fresenius Medical Care AG & Co. KGaA
Violation: Under Section 21C of the Exchange Act, the Commission may impose a cease-and-desist order upon any person who is violating, has violated, or is about to violate any provision of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or would be a cause of the violation, due to an act or omission the person knew or should have known would contribute to such violation… Read More

Penalties: $625,000.00
Respondent: Vision Financial Markets LLC
Violation: Despite clearing these suspicious transactions and other related red flags, VFM did not file timely SARs related to relevant activities by at least 100 of these accounts when it knew, suspected, or had reason to suspect that these transactions involved the use of VFM to facilitate fraudulent activity, or had no business or apparent lawful purpose. As a result of this conduct, VFM willfully violated Section 17(a) of the Exchange Act and Rule 17a-8 thereunder… Read More

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