Financial Enforcement Actions | Week of May 26 to May 31

Financial Enforcement Actions | Week of May 26 to May 31

Financial Enforcement Actions | Week of May 26 to May 31

Penalties: $236,500.00
Respondent: Servis One, Inc., d/b/a BSI Financial Services
Violation: “BSI violated the Consumer Financial Protection Act of 2010, the Real Estate Settlement Procedures Act, or the Truth in Lending Act”… Read More

Penalties: N/A
Respondent: Terry John Farr
Violation: Between 1 January 2007 and 31 December 2010, Martins breached Principles 3 and 5 of the Authority’s Principles for Businesses through misconduct relating to the calculation of JPY LIBOR… Read More

Penalties: $775,100.00
Respondent: R. Raphael & Sons plc
Violation: Raphaels breached Principle 3 and SYSC 8.1.1R because its systems and controls failed to enable it properly to identify when it was relying on outsourcers for the performance of functions that were critical for the performance of its regulated activities (in particular, the provision of e- oney) on a continuous and satisfactory basis. It was unable to ensure it took reasonable steps to avoid undue additional operational risk, and its risk management systems were therefore inadequate… Read More

FINRA

7 Enforcement Documents

$1,620,377.75 in Fines

Penalties: $5,000.00
Respondent: Michael L. Carter
Violation: In October 2016, Carter engaged in an undisclosed and unapproved private securities transaction when he sold a $25,000 promissory note to an investor. Carter’s conduct violated FINRA Rules 3280 and 2010… Read More

Penalties: $5,000.00
Respondent: Alexander Michael Panas, III
Violation: Panas, after accepting an offer to join another FINRA member firm, improperly took nonpublic personal customer information from Summit, without Summit’s or the customers’ knowledge or consent. As a result, Panas violated FINRA Rule 2010 and caused Summit to violate the SEC’s Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information (“Regulation S-P”)… Read More

Penalties: N/A
Respondent: Benjamin Frank Bourgeois
Violation: During an investigation by FINRA into allegations that Bourgeois,among other things,borrowed money from a customer,converted customer funds and committed fraud,Bourgeois failed to produce documents and information requested by FINRA staff pursuant to FINRA Rule 8210,in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $1,318,109.02
Respondent: Windsor Street Capital, Arthur Tacopino, Edwin Rodriguez
Violation: Respondent Arthur Tacopino willfully misused his firm’s proprietary accounts to fraudulently allocate profitable trades to favored individuals and unprofitable trades to the firm’s customers or the firm’s accounts… Read More

Penalties: $5,000.00
Respondent: Frank H. Kelly
Violation: Kelly exercised discretion without written authorization in the account of that customer and four other customers’ accounts, in violation of NASD Rule 2510(b) and FINRA Rule 2010… Read More

Penalties: $14,268.73
Respondent: David John Strnad
Violation: Strnad exceeded the scope of his authority by selling CDs held by KW prior to maturity and using the proceeds to purchase new CDs for KW. As a result of this conduct, Stinad violated FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Curtis Ile
Violation: Between June 2015 and July 2018, Ile violated FINRA Rules 4511 and 2010 by mismarking 215 order tickets as unsolicited when the transactions were, in fact, solicited, thereby causing the firm’s books and records to be inaccurate. During the same period, Ile violated FINRA Rules 2114 and 2010 by recommending 16 over-the-counter (“OTC”) equity securities to customers without reviewing the current financial statements of the issuers. Finally, during the same period, Ile violated NASD Rule 251 O(b) and FINRA Rule 2010 exercising discretion without written authorization in 17 customer accounts… Read More

SEC

11 Enforcement Documents

$55,760,068.59 in Fines

Penalties: $505,381.00
Respondent: Stephen Brandon Anderson
Violation: In 2015 and 2016, Anderson overcharged River Source clients advisory fees of at least $367,000. In addition, Anderson made material misstatements to clients and in reports filed by River Source with the Commission, including overstating River Source’s assets under management by at least $61 million in 2016. Anderson further failed to keep required books and records and failed to adopt and implement required compliance policies and procedures… Read More

Penalties: $217.00
Respondent: James Alan Craig
Violation: Craig disseminated these false statements using Twitter accounts that he deceptively created to look like real Twitter accounts of well-known securities research firms. After making the fraudulent tweets, Craig allegedly placed trades in an attempt to capitalize on the stock price movements… Read More

Penalties: N/A
Respondent: Sean D. Premock
Violation: Premock pled guilty to nine counts of mail fraud in violation of Title 18 United States Code, Section 1341, nine counts of wire fraud in violation of Title 18 United States Code, Section 1343, one count of securities fraud in violation of Title 15 United States Code, Sections 78j(b) and 78ff, and one count of investment adviser fraud in violation of Title 15 United States Code, Sections 80b-6 and 80b-17 before the United States District Court for the Eastern District of Pennsylvania… Read More

Penalties: N/A
Respondent: Henry Ford et al
Violation: Ford, of Port St. Lucie, Florida, falsely told investors that wellknown insurers and state governments had expressed interest in Fallcatcher’s technology. Ford allegedly told investors that this technology tracked patients receiving opioid addiction treatment to prevent medical billing fraud… Read More

Penalties: N/A
Respondent: Henry Ford f/k/a Cleothus Lefty Jackson and Fallcatcher, Inc.
Violation: Ford secretly caused Fallcatcher to violate the Board Resolution. Among other disbursements and without notice to Commission counsel, Ford caused to be transferred over $1 million, including almost $250,000 to himself and over $16,000 to his wife from a Fallcatcher bank account holding investors’ funds. Ford and Fallcatcher violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]… Read More

Penalties: N/A
Respondent: George Slowinski
Violation: Slowinski and Rebuilding America allegedly told investors that Rebuilding America would pool investor proceeds to acquire, refurbish, and sell for profit residential real estate primarily located in the South Side ofChicago. Slowinski and Rebuilding America allegedly lured investors by touting Rebuilding America as a successful real estate program, and falsely promising to pay investors 38% returns in only two years. They allegedly raised more than $20 million from over 600 investors with assistance from London-based Project Kudos Group Limited and Singapore-based Infinity Treasures Private Limited… Read More

Penalties: $359,251.59
Respondent: David A. Altom and Gabriel V. Graven
Violation: Patterson-UTI Energy, Inc. (“Patterson”) had agreed to acquire Seventy Seven in an all-stock transaction. In advance of the announcement, David A. Altom, a senior manager at Seventy Seven, tipped material nonpublic information concerning Seventy Seven’s imminent acquisition to Gabriel V. Graven, his close friend and neighbor. Graven, in turn, purchased 6,614 shares of Seventy Seven and tipped the material nonpublic information to another person (“Trader A”), who purchased 500 shares of Seventy Seven. Following the public announcement, Seventy Seven’s stock price increased by approximately 70 percent, yielding illegal profits of $126,835.35 for Graven and $9,625 for Trader A. By engaging in this conduct, Graven and Altom each violated Section 10(b) of the Exchange Act and Rule 10b-5… Read More

Penalties: $7,895,219.00
Respondent: Donald A. Milne III et al
Violation: Milne falsely told investors that their money would be used to pay for the operating expenses of Instaprin Pharmaceuticals, which was purportedly developing a revolutionary fast acting aspirin to instantly stop heart attacks and strokes. Instead, Milne allegedly used investors’ money to largely pay for personal expenses, such as a vacation, clothing, spa treatments, divorce expenses, and on Island Raceway & Hobby, Inc., his now-defunct remote-controlled toy racecar business, which had previously operated in Lindenhurst, New York… Read More

Penalties: $47,000,000.00
Respondent: Craig H. Carton
Violation: Carton and another New York City man, Joseph Meli, along with six of their companies, were charged with stealing millions of dollars from investors who were allegedly promised their funds would be used for the purchase and resale of concert tickets… Read More

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