Financial Enforcement Actions | Week of Mar 31 to Apr 05
Penalties: N/A
Respondent: Samrat Deep Bhandari
Violation: It appears to the Authority that Mr. Bhandari is not a fit and proper person to perform any function in relation to any regulated activity carried on by any authorized person, exempt person or exempt professional firm. His convictions demonstrate a clear and serious lack of honesty and integrity. In reaching this decision, the Authority has had regard to all relevant circumstances, including the severity of the risk posed by Mr. Bhandari to consumers and financial institutions and to confidence in the market generally… Read More
Penalties: N/A
Respondent: James Roper Chatfield
Violation: It appears to the Authority that Mr. Chatfield is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that Mr. Chatfield is a fit and proper person having regard to all the circumstances, including whether Mr. Chatfield 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: UrthBox, Inc. & Behnam Behrouzi.
Violation: The Commission’s Bureau of Consumer Protection (“BCP”) prepared and furnished to Respondents a draft Complaint. BCP proposed to present the draft Complaint to the Commission for its consideration. If issued by the Commission, the draft Complaint would charge the Respondents with violations of the Federal Trade Commission Act, 15 U.S.C. § 45, and the Restore Online Shoppers’ Confidence Act (“ROSCA”), 15 U.S.C. § 8403… Read More
Penalties: N/A
Respondent: Merits Briefs
Violation: A party may be held in civil contempt for failure to comply with a court order if the order was clear and unambiguous, proof of noncompliance is clear and convincing, and the party did not diligently attempt to comply in a reasonable manner… Read More
Penalties: N/A
Respondent: Impax Laboratories, Inc.
Violation: Impax, a generic manufacturer, had entered into an unlawful reverse payment settlement with Endo, the maker of Opana ER, an extended-release formulation of oxymorphone, an opioid used to treat pain… Read More
FINRA
Penalties: $105,000.00
Respondent: Cantor Fitzgerald & Co.
Violation: In more than 182 instances, the firm failed to include a code that reflected its reliance on an information barrier when appropriate in its submissions to OATS. This conduct violated FINRA Rules 7440 and 7450… Read More
Penalties: N/A
Respondent: Bradley Allen Latting
Violation: Latting violated FINRA Rules 8210 and 2010 by refusing to appear and provide testimony requested pursuant to FINRA Rule 8210 in connection with FINRA’s Department of Enforcement (“Enforcement”) investigation concerning Latting’s commingling and/or conversion of funds belonging to his elderly client while serving as her power-of-attorney… Read More
Penalties: N/A
Respondent: Adrian Torres Ortega
Violation: Ortega failed to provide documents and information requested pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More
Penalties: $5,000.00
Respondent: Fabiano de Franco
Violation: De Franco emailed unencrypted spreadsheets containing the confidential personal financial information of retirement plan participants to the email account of his outside business. By virtue of the foregoing, de Franco failed to observe high standards of commercial honor and just and equitable principles of trade in violation of FINRA Rule 2010… Read More
Penalties: $27,752.00
Respondent: John D. Ernst
Violation: Ernst engaged in undisclosed and unapproved private securities transactions totaling approximately $509,000. Ernst’s conduct violated FINRA Rules 3280 and 2010… Read More
Penalties: $5,000.00
Respondent: Scott P. Klor
Violation: Klor participated in a private securities transaction by soliciting investors to purchase a variable life insurance policy through a specially-formed LLC for approximately $1.4 million. For his participation in this transaction, Klor received a four-percent interest in the LLC. Klor failed to notify LPL of his participation in the transaction as required under NASD Rule 3040. As a result, Klor violated NASD Rule 3040 and FINRA Rule 2010… Read More
Penalties: $10,000.00
Respondent: James B. Eichner, Jr.
Violation: Eichner violated NASD Rule 2510(b) and FINRA Rule 2010 by exercising discretion without written authorization in at least ten customer accounts during the period of May 2015 through April 2016 and by accepting instructions from an unauthorized third party to place a trade in a deceased customer’s account in March 2016… Read More
Penalties: N/A
Respondent: James C. Bylenga
Violation: Based on LPL Financial’s October 2018 amended Form U5 filing for Bylenga described above, FINRA commenced an investigation of Bylenga’s conduct and issued requests for information and documents pursuant to FINRA Rule 8210. Bylenga, through his counsel, informed FINRA staff that Bylenga would not provide the information or documents requested. Bylenga thereby violated FINRA Rules 8210 and 2010… Read More
SEC
Penalties: $10,000.00
Respondent: Mutual Coin Fund LLC and Usman Majeed
Violation: Respondents misrepresented the amount of money raised by the Fund and the size of other investors’ actual and prospective investments in the Fund. Respondents failed to take reasonable steps as to the accuracy of these statements before disseminating them to actual and potential investors… Read More
Penalties: N/A
Respondent: Jennifer F. Wolf
Violation: Wolf’s conduct resulted in Logitech’s filing a false and misleading Form 10-K for the fiscal year ended March 31, 2011 based on Logitech’s failure to record an inventory reserve for its Revue product… Read More
Penalties: $6,500,000.00
Respondent: Robert P. DePalo
Violation: Robert P. DePalo with defrauded over twenty investors by misrepresenting the value of their investments and use of their funds, including by sending the first $2.3 million of investor funds to his personal bank account. DePalo made false statements to SEC examiners in an attempt to conceal the fraud… Read More
Penalties: N/A
Respondent: Kevin E. Brooks
Violation: Quest Software, Inc. (“Quest”), in part through the misconduct of Brooks, misstated its financial statements by failing to report compensation expense associated with stock options granted in-the-money through undisclosed backdating of grant dates from 1999 through 2001… Read More
Penalties: $3,085,939.00
Respondent: Kimberly Pine Kitts
Violation: Kitts pled guilty to charges filed by the U.S. Attorney for the District of Massachusetts of wire fraud, investment adviser fraud, and aggravated identity theft… Read More
Penalties: $420,894.97
Respondent: Chad Starkey
Violation: Starkey violated Section 17(a)(2) of the Securities Act, which prohibits, directly or indirectly, in the offer or sale of securities, obtaining money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading… Read More
Penalties: N/A
Respondent: Evan R. Kita
Violation: Kita has been found guilty of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371, and securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240.10b-5 and 240.10b5-2… Read More
Penalties: $16,640,000.00
Respondent: Daniel Mattes
Violation: Mattes grossly overstated Jumio’s 2013 and 2014 revenues and then sold shares he held personally to investors in the private, secondary market… Read More
Penalties: $125,677.00
Respondent: AVEO Pharmaceuticals, Inc
Violation: Johnston, AVEO, and two other AVEO officers had charged with defrauding investors through misleading statements about the prospect for FDA approval of AVEO’s flagship drug… Read More
Penalties: $442,006.00
Respondent: Evan R. Kita
Violation: The SEC charged Evan R. Kita for provided confidential information about the company to Perez and Richard Yu, who purchased Celator stock based on Kita’s tips and agreed to share their trading profits with Kita… Read More
Penalties: N/A
Respondent: Jerey E. Wall and The Lighthouse Events, LLC
Violation: Wall and Lighthouse falsely told potential investors, among other things, that their funds would be used solely to promote and host Christian music concerts and festivals, claiming that repayment of the investment was “secured” and “guaranteed” within one year of the initial investment… Read More
Penalties: $427,120.00
Respondent: Lisa C. Berry, Esq.
Violation: Berry was permanently enjoined by the United States District Court for the Northern District of California (“Northern District”) from future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, Section 13(b)(5) of the Exchange Act of 1934 (“Exchange Act”) and Rule 13b2-1 under the Exchange Act, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) and 14(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, 13a-13 and 14a-9 thereunder… Read More
Penalties: $57,086.62
Respondent: Tai-Cheng Yang
Violation: Unbeknownst to Family Member A, Wife told Yang about Family Member A’s involvement in the proposed transaction, and between June 9 and June 13, 2017, in breach of a duty of trust and confidence owed to Wife, Yang misappropriated the information he received from Wife and purchased Whole Foods securities in advance of the Announcement. Yang knew or was reckless in not knowing that his purchases of Whole Foods options were in breach of the duty of trust or confidence that he owed to Wife. The Commission finds that Yang 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: $1,567,384.00
Respondent: Scott Newsholme
Violation: Newsholme fabricated account statements, doctored stock certificates, and forged promissory notes as part of a scheme in which he convinced clients seeking his financial planning advice that he would invest on their behalf… Read More
Penalties: $6,330,510.00
Respondent: William B. Frentz, Jr.; John P. Freeman; Covenant Capital Management Partners; Covenant Partners
Violation: Fretz, Freeman, and CCMP willfully violated, and Covenant violated 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, Fretz, Freeman, and CCMP willfully violated Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder… Read More
Penalties: $7,575,000.00
Respondent: Logitech International; Micahel Doktorczyk, and Sherralyn Bolles, CPA
Violation: Logitech responsible for recurring instances of improper accounting between 2008 and 2013 related to a product write-down, warranty liabilities, and revenue recognition. Doktorczyk and Bolles, both former officers of Logitech, responsible for the improper accounting for warranty liabilities, which occurred during their employment… Read More
