Weekly Enforcement Action Tracker (May 20 – May 25)

Financial Enforcement Action Summary

CA-DBO

Penalties: TBD
Respondent: Complaint – Grobecker Holland International, Inc.
Violation: On May 19, 2018, Respondent submitted its Annual Report, which was due on March 15, 2018, 46 business days late… Read More

Penalties: N/A
Respondent: Complaint – Ene Elite National Escrow Inc.
Violation: ENE failed to file an annual audit report in violation of Financial Code section 17406. ENE also failed to file a report required by law within 10 days from the day designated for the making of the report in violation of Financial Code section 17602.5. Under section 17602.5, such failure constitutes grounds for suspension or revocation of ENE’s license… Read More

Penalties: TBD
Respondent: Complaint – Allegro California, LLC
Violation: On April 19, 2018, Respondent submitted its Annual Report, which was due on March 15, 2018, 25 business days late… Read More

Penalties: TBD
Respondent: Complaint – Arete Investment Company, LLC
Violation: On May 15, 2018, Respondent submitted its Annual Report, which was due on March 15, 2018, 43 business days late… Read More

FTC

Penalties: TBD
Respondent: PointBreak Media, LLC
Violation: Falsely claiming to represent Google, falsely threatening businesses with removal from Google search results, and falsely promising first-place or first-page placement in Google search results… Read More

SEC

25 Enforcement Documents

$1,378,095.00 in Fines

Penalties: N/A
Respondent: Baltia Air Lines, Inc., et al.
Violation: Failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the period ended December 31, 2014. As of May 2, 2018, the company’s stock (symbol “GRMS”) was quoted on OTC Link, had five market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3)… Read More

Penalties 2,021,444.19

Penalties: $2,021,444.19
Respondent: Andre V. La Barbera, Douglas A. Leone and Newport Coast Securities, Inc.
Violation: Firm and registered representatives excessively traded and churned the accounts of customers; firm and registered representative made unsuitable recommendations; registered representative conveyed inaccurate account values to a customer, and firm failed to supervise reasonably the registered representatives who excessively traded and churned customers’ accounts… Read More

Penalties: N/A
Respondent: Leona Parsons
Violation: Parsons refused to appear for on-the-record testimony requested pursuant to FINRA Rule 8210. By refusing to provide testimony, Pars and violates FTNRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Louis Anthony Telerico
Violation: Between April 2012 and May 2016, Telerico willfully failed to disclose, via the filing of an amended Uniform Application for Securities Industry Registration or Transfer (“Form U4”), the filing of bankruptcy petitions by various companies he controlled, and three tax liens and three civil judgments filed or entered against him personally. By failing to amend his Form U4 to reflect these reportable events, Telerico willfully violated Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: N/A
Respondent: Sanjeev Sreetharan
Violation: Respondent violated FINRA Rules 8210 and 2010 by failing to appear and provide testimony in response to multiple requests pursuant to FINRA Rule 8210, in connection with an investigation concerning allegations that he incorrectly valued certain securities in his Firm trading portfolio… Read More

[vcex_divider]

Penalties: N/A
Respondent: Green Parts International, Inc., et al.
Violation: All of the Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters… Read More

Penalties: TBD
Respondent: Lisa A. Esposito
Violation: Respondent devised and participated in a scheme to defraud investors and obtain money and property by means of materially false and misleading statements intended to fraudulently manipulate the price of the stock of Viosolar, Inc. and FACT Corporation… Read More

Penalties: TBD
Respondent: COPsync Inc, et al.
Violation: All of the Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters… Read More

Penalties: N/A
Respondent: SEC Complaint – Bud Genius, Inc. and Aaron “Angel” Stanz, Taylor Moffitt, Carlos Febles, and U.S. CoProducts, LLC”)
Violation: Throughout 2014 and 2015, Bud Genius, Inc. (“Bud Genius”), a penny stock medical marijuana testing company, and its CEO Aaron “Angel” Stanz (“Stanz”), engaged in a scheme to defraud investors regarding Bud Genius’ business operations and financial condition to make Bud Genius look more valuable and attractive as a start-up company and potential investment. This fraudulent scheme helped facilitate an unregistered offering of the securities of Bud Genius, which generated approximately $540,000 in illicit profits to Bud Genius, Stanz, and others… Read More

Penalties: $490,595.00
Respondent: Bud Genius, Inc. and Aaron “Angel” Stanz, Taylor Moffitt, Carlos Febles, and U.S. CoProducts, LLC
Violation: Defendants acquired, offered, and sold billions of shares of unregistered Bud Genius stock for a total profit of more than $540,000, approximately $140,000 of which was paid to Bud Genius and Stanz… Read More

Penalties: N/A
Respondent: Tibor Klein
Violation: Klein improperly used that material, non-public information to purchase King Pharmaceuticals’ stock for himself and his clients, including the lawyer. The complaint also alleged that Klein gave the acquisition information to a good friend, who was associated with a registered broker-dealer, and who also purchased King shares based on Klein’s tip. The complaint alleged Klein made $8,824 in profits for himself and $319,550 in profits for his clients based on the material, non-public information… Read More

Penalties: TBD
Respondent: Taylor Moffitt, Carlos Febles, and U.S. CoProducts, LLC – Bud Genius, Inc. and Aaron “Angel” Stanz, Taylor Moffitt, Carlos Febles, and U.S. CoProducts, LLC
Violation: From 2013 to 2015, Defendants Taylor Moffitt (“Moffitt”), Carlos Febles (“Febles”), and their entity U.S. CoProducts, LLC (“U.S. CoProducts”), acquired, offered, and sold billions of shares of unregistered Bud Genius stock in violation of Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”)… Read More

Penalties: N/A
Respondent: Adam S. Tracy, ESq.,
Violation: Tracy aided and abetted the filing of Forms S-1 and S-1/A of a corporation (the “Entity”) that contained material misrepresentations and omissions to investors. These material misrepresentations and omissions included, among others, identifying certain officers and directors in the Entity’s Forms S-1 and S1/A who, in fact, were neither officers nor directors of the Entity and concealing the identity of the control person and promoter of the Entity… Read More

Penalties: TBD
Respondent: Mullan Agritech, Inc., ReliaBrand, Inc. and UBL Interactive, Inc.
Violation: All of the Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters… Read More

Penalties: TBD
Respondent: Radiant Oil & Gas, Inc., Tungsten Corp. and Well Power, Inc.
Violation: All of the Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters… Read More

Penalties: $160,000.00
Respondent: Aberon Capital Management, LLC and Joseph Krigsfeld
Violation: Misrepresentations and omissions by Aberon and Krigsfeld concerning the assets and performance of a hedge fund called Aberon Capital Master Fund, LP (“ACMF”). Between 2011 and 2014, Aberon and Krigsfeld misrepresented ACMF’s performance and assets to ACMF investors. In addition, from October 2012 until April 2014, Aberon and Krigsfeld received excessive advisory fees from ACMF based on those inflated asset valuations, although Krigsfeld later returned a greater amount to ACMF… Read More

Penalties: TBD
Respondent: John C. Knight
Violation: Knight, acting through DEI, used the mails or other means or instrumentalities of interstate commerce, effected transactions in or induced or attempted to induce the purchase or sale of securities while neither Knight nor DEI was registered with the Commission as a broker or dealer or while Knight was not associated with an entity registered with the Commission as a broker or dealer. The Commission’s complaint also alleged that Knight, acting through DEI, offered and sold NGEY securities when no registration statement for the offers and sales was filed or in effect… Read More

Penalties: N/A
Respondent: Arthur Kaplan
Violation: Kaplan violated Section 17(a)(3) of the Securities Act, which prohibits, in the offer or sale of securities, knowingly, recklessly, or negligently engaging in transactions, practices, or courses of business which operate or would operate as a fraud or deceit upon purchasers of such securities… Read More

Penalties: $227,500.00
Respondent: Perry A. Gruss
Violation: Gruss aided and abetted DBZCO’s improper transfers of monies between its privately managed client funds, including transfers of $576 million to allow one of the client funds to make its investments, and transfers of $273 million to allow the same client fund to repay its revolving credit facility… Read More

Penalties: TBD
Respondent: Mass Hysteria Entertainment Company, Inc., Stark Naked Bobbers and TOA Holdings, Inc.
Violation: All of the Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters… Read More

Penalties: TBD
Respondent: Perry A. Gruss
Violation: D.B. Zwirn & Co., L.P., a now defunct investment adviser, improperly transferred monies between client funds in order to allow one of the client funds to fund its investments and also to repay its revolving credit facility. The Complaint alleged that Respondent, the Chief Financial Officer of the investment adviser, aided and abetted these improper transfers between the client funds… Read More

Penalties: $500,000.00
Respondent: Gregory M. Bercowy
Violation: Between August 4 and August 15, 2016, Bercowy, who during the relevant time period was associated with a state-registered investment adviser, sold shares of certain Fortune 500 companies, including Abbott and Apple, in his relative’s brokerage account in order to buy over three million shares of Aureus at a total cost of more than $2.8 million… Read More

Penalties: N/A
Respondent: Maxwell Technologies, Inc., et al.
Violation: On May 24, 2018, the Commission staff requested the appointment of Miller Kaplan as the Tax Administrator for the QSF in the above-referenced proceeding… Read More

Penalties: N/A
Respondent: Tobin J. Senefeld
Violation: Respondent and other defendants used the funds to make approximately $7 million in payments to investors in other unsuccessful offerings and to pay themselves over $800,000 in undisclosed “success” and “interest rate spread” fees. The amended complaint further alleged that, as part of the scheme, Respondent helped mislead investors about the risks, nature, and performance of their farm loan investments… Read More

Penalties: TBD
Respondent: Mullan Agritech, Inc., ReliaBrand, Inc. and UBL Interactive, Inc.
Violation: All of the Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters… Read More

Penalties: TBD
Respondent: Niel Martin Nielson and Carolyne Susan Johnson
Violation: Defrauding retail investors in a penny stock scheme involving an Ohio-based electronic-waste recycling company… Read More

Penalties: TBD
Respondent: Carolyne Susan Johnson; – Niel Martin Nielson and Carolyne Susan Johnson
Violation: From at least January 2011 through December 2012 in connection with her public shell company, T&G Apothecary, Inc. (“T&G”), and activity by Johnson that aided and abetted a separate fraudulent scheme at E-Waste Systems, Inc. (“EWSI”) from at least November 2012 through January 2015… Read More

Penalties: TBD
Respondent: Niel Martin Nielson – Niel Martin Nielson and Carolyne Susan Johnson
Violation: From at least November 2012 through April 2015, Niel Martin Nielson (“Nielson”) orchestrated a microcap fraud at E-Waste Systems, Inc. (“EWSI”), a purported e-waste recycler that was created in 2011 through the combination of a private entity in the United Kingdom and a public non-operating shell company in the United States… Read More

Penalties: TBD
Respondent: Solo International, Inc., Urban Hydroponics, Inc. and Your Event, Inc.
Violation: All of the Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters… Read More

FINRA

19 Enforcement Documents

$3,877,160.95 in Fines

Penalties: $7,500.00
Respondent: Lawrence Eugene Murphy
Violation: In 2015, Murphy provided nonpublic, personal MSI customer information to his son, a registered representative who had been terminated by MSI and had become associated with another member firm. Murphy’s conduct violated FINRA Rule 2010 by causing MSI to violate Regulation S-P… Read More

Penalties: $5,000.00
Respondent: Fuad Habba
Violation:In January to March 2016 (the “Relevant Period”), Respondent engaged in a check-kiting scheme whereby he wrote and deposited into his personal checking account at the Firm a total of five checks, totaling $2,765, that were drawn against Respondent’s other bank accounts that had been closed for years prior to the deposits. The Firm initially credited Respondent’s account for each of these deposits and then subsequently rejected each of these deposits. By depositing checks drawn against closed accounts, Respondent violated FINRA Rule 2010… Read More

Penalties: $59,790.00
Respondent: Peter D. Holler
Violation: Between September 2016 and August 2017 (the “Relevant Period”), while associated with SSN, Holler violated FINRA Rules 3280 and 2010 by engaging in a series of private securities transactions without providing notice to SSN… Read More

Penalties: $15,000.00
Respondent: Lek Securities Corporation
Violation: The firm failed to report 54 short interest positions totaling 1,633,997 shares in Foreign-Listed Securities because the firm was unaware that short interest positions in Foreign-Listed Securities were reportable… Read More

Penalties: $5,000.00
Respondent: Integrated Trading and Investments, Inc.
Violation: Integrated failed to maintain and preserve certain business-related emails in a non-erasable, non-rewritable format, also known as “WORM” format; failed to establish, maintain, and enforce a reasonably designed supervisory system relating to the review, maintenance, and preservation of business-related emails… Read More

Penalties: N/A
Respondent: Harold F. Couglar
Violation: In violation of FINRA Rules 3270 and 2010, Couglar failed to notify Montage that he was engaged in tax preparation services for compensation, which was a business activity that was outside the scope of his relationship with that firm… Read More

Penalties: $550,000.00
Respondent: Citigroup Global Markets, Inc.
Violation: The Firm failed to have adequate supervisory procedures reasonably designed to ensure compliance with federal securities laws and NASD and FINRA rules regarding the issuance of accurate customer trade confirmations… Read More

Penalties: $800,000.00
Respondent: EFG Capital International Corp. (“EFG” or “Firm”)
Violation: EFG failed to establish and implement an adequate supervisory system, including written supervisory procedures (“WSPs”), or anti-money laundering (“AML”) program related to two material areas of its international business model. EFG did not adequately assess, supervise or mitigate the business risks associated with: (1) its payment of transaction-based compensation to non-registered individuals or entities… Read More

Penalties: $150,000.00
Respondent: Arvest Wealth Management
Violation: Arvest failed to provide required initial and annual privacy notices to certain brokerage customers and also failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to ensure that it was meeting its privacy notice obligations. By virtue of the foregoing, Arvest violated Rules 4 and 5 of SEC Regulation S-P, NASD Rule 3010(a)(2) and (b)(1),1and FINRA Rules 3110 (a)(2), (b)(1) and 2010… Read More

Penalties: TBD
Respondent: Herbert Voss, Jr.
Violation: On April 25, 2018, FINRA requested that Voss appear to provide on-the-record testimony, pursuant to FINRA Rule 8210. Voss has indicated that he will not provide testimony in connection with this matter. By failing to appear for on-the-record testimony as requested pursuant to FINRA Rule 8210, Voss violates FINRA Rules 8210 and 2010… Read More

Penalties: $34,474.35
Respondent: Aon D. Miller
Violation: Respondent participated in private securities transactions without providing written notice to his firm… Read More

Penalties: $24,212.08
Respondent: Allen Holeman
Violation: Respondent willfully failed to timely disclose material information on his Form U4 and made false statements to his firm on its annual compliance questionnaire… Read More

Penalties: $60,000.00
Respondent: Clearpool Execution Services, LLC
Violation: The firm failed to accurately report the capacity in which it acted (and mishandled its reporting of the contra party’s capacity) in connection with more than 77 million non-media reports of transactions to the FINRA/NYSE TRF during the review period. The misreporting resulted from the firm’s failure to implement certain coding changes to its trading systems in response to certain technical changes associated with reporting to the TRF that went into effect at the beginning of the review period… Read More

Penalties: $144,740.33
Respondent: Capitol Securities Management, Inc.
Violation: From March 15, 2011, to March 15, 2017 (the “Relevant Period”), Capitol failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to detect and prevent unsuitable short-term trading in Unit Investment Trusts (“UITs”)… Read More

Penalties: N/A
Respondent: Brian John Hussey, Jr.
Violation: From February 2014 through July 2014, Ilussey made unsuitable recommendations to a customer resulting in her investing 100% of her accounts in two penny stocks in violation of FINRA Rule 2111 and 2010. Hussey’s member firm prohibited soliciting trades in these type of stocks, and thus, in order to effect the transactions, Hussey mismarked 16 trades as “unsolicited” in violation of FINRA Rules 4511 and 2010… Read More

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