Financial Enforcement Actions | Week of May 30 to June 05

Enforcement Report May 30 - June 05 feat

Enforcement Report May 30 - June 05

UK-FCA

2 Enforcement Documents

£0.00 in Fines

Penalties: N/A
Respondent: Jason Taylor
Violation: Mr Taylor is not a fit and proper person to perform any function in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm, as his conduct demonstrates a clear and serious lack of honesty, integrity and reputation. Specifically, Mr Taylor... Read More

Penalties: N/A
Respondent: Advantage Car Centre Limited
Violation: ACCL has failed to respond adequately to the Authority's repeated requests for it to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that it is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More

CFPB

3 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Main Street Personal Finance, Inc., ACAC, Inc. d/b/a Approved Cash Advance, and Quik Lend, Inc.
Violation: The Bureau of Consumer Financial Protection (Bureau) intends to initiate an administrative proceeding against Main Street Personal Finance, Inc.; ACAC, Inc. d/b/a "Approved Cash Advance;" and Quik Lend, Inc. (Respondents), under 12 U.S.C. §§ 5563 and 5565, for its payday and instalhnent loan practices in violation of the Consumer Financial Protection Act of2010 (CFPA), 12 U.S.C. §§ 5531, 5536(a)(l)(B), the Truth in Lending Act, 15 U.S.C. §§ 1601-1667f(TILA), and TILA's implementing regulation, Regulation Z, 12 C.F.R. pt. 1026... Read More

FTC

3 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Qualpay, Inc. a Delaware Corporation
Violation: Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts or practices in or affecting commerce.” Acts or practices are unfair under Section 5 of the FTC Act if they cause or are likely to cause substantial injury to consumers that consumers cannot reasonably avoid and that is not outweighed by countervailing benefits to consumers or competition. 15 U.S.C. § 45(n)... Read More

Penalties: N/A
Respondent: Quantum Wellness
Violation: Selling a product deceptively marketed as a cure-all for a range of age-related ailments including cell damage, heart attack damage, brain damage, and deafness... Read More

Penalties: N/A
Respondent: "Hyperbeard, Inc., a corporation, and Alexander Kozachenko and Antonio Uribe, individually and as officers of HyperBeard, Inc"
Violation: Defendants violated the Rule as described above with the knowledge required by Section 5(m)(l)(A) of the FTC Act, 15 U.S.C. § 45(m)(l)(A). Each collection, use, or disclosure of a child's personal information in which Defendants violated the Rule in one or more of the ways described above constitutes a separate violation for which Plaintiff seeks monetary civil penalties... Read More

CFTC

2 Enforcement Documents

$352,901.03 in Fines

Penalties: N/A
Respondent: William S. Evans III, individually and d/b/a Turning Point Investments Defendant, Frances Evans, Relief Defendant.
Violation: Evans also violated 7 U.S.C. § 6b(a)(1)(A) and (C) during the Relevant Period by misappropriating participant funds for personal benefit, including paying his personal mortgage and using participant funds to pay other participants, in the manner of a Ponzi scheme... Read More

Penalties: $352,901.03
Respondent: Eyal Alper
Violation: 17 C.F.R. § 4.30(a) prohibits a CTA, whether registered, required to be registered, or exempted from registration, from soliciting, accepting, or receiving from an existing or prospective customer funds in the CTA's name to purchase, margin, or guarantee any commodity interest of the customer. By the conduct described above, Alper violated 17 C.F.R. § 4.30(a), in that he solicited, accepted, and received funds from customers in his own name for the purpose of purchasing, margining, guaranteeing, or securing futures contracts and/or retail forex contracts for them... Read More

FINRA

12 Enforcement Documents

$7,965,700.10 in Fines

Penalties: $85,000.00
Respondent: Cantor Fitzgerald & Co.
Violation: Respondent further specifically and voluntarily waives any right to claim that a person violated the ex parte prohibitions of FINRA Rulc 9143 or the separation of functions prohibitions of FINRA Rule 9144, in connection with such person's or body's participation in discussions regarding the terms and conditions of this AWC, or other consideration of this AWC, including its acceptance or rejection... Read More

Penalties: $10,000.00
Respondent: Donald G. Padilla
Violation: From February 2011 to November 2015 (the "Relevant Period"), while associated with LPL, Respondent set up and used unapproved email accounts to correspond with Firm customers about securities business and circumvented LPL's supervision of his business in violation of FINRA Rule 2010. Respondent's use of unapproved email accounts to conduct Firm business also violated NASD Rule 3110 and successor FINRA Rule 4511 by causing his member firm to fail to comply with its recordkeeping obligations... Read More

Penalties: $450,000.00
Respondent: Electronic Transaction Clearing, Inc.
Violation: "During the period of April 1, 2015 through June 30, 2017, ETC failed to satisfy its customer protection requirements for its customer and proprietary business, including hindsight deficiencies in two instances; adhere to capital withdrawal rules specific to clearing firms in two instances; and, comply with its recordkeeping and supervision requirements... Read More

Penalties: N/A
Respondent: Hector Ramos
Violation: During the period February 2015 to March 2016 (the "Relevant Period"), Ramos made unsuitable recommendations to AV, an unemployed, disabled customer with limited investment experience, to concentrate her investments almost entirely in a handful of speculative energy sector securities, in violation of FINRA Rules 2111 and 2010... Read More

Penalties: N/A
Respondent: Marie Bernadette Kincheloe
Violation: In May 2020, Kincheloe refused to respond to an information request issued pursuant to FINRA Rule 8210, thereby violating FINRA Rules 8210 and 2010... Read More

Penalties: $5,000.00
Respondent: Mark William Menard
Violation: In May 2019, while associated with Merrill, Menard falsified documents as an accommodation for customers, with their permission, by manually copying and pasting three customers' signatures onto Letter of Assignment of Estate forms in violation of FINRA Rule 2010... Read More

Penalties: $7,225,700.10
Respondent: Merrill Lynch, Pierce, Fenner & Smith Incorporated
Violation: Between April 2011 arid April 2017 (the "Relevant Period"), Merrill Lynch failed to provide over 13,000 accounts with mutual fund sales charge waivers and fee rebates to which the customers were entitled through rights of reinstatement offered by mutual fund companies. As a result, eligible customers paid approximately $6 million in excess sales charges and fees during the Relevant. Period... Read More

Penalties: $150,000.00
Respondent: Mizuho Securities USA LLC
Violation: From February 2015 through December 2016 (the "Review Period"), as a result of systemrelated issues connected to its third-party order management system ("OMS"), Mizuho overstated its trading volume in numerous securities it had advertised through Bloomberg, L.P. ("Bloomberg"), a private subscription-based provider of market data, in violation of FINRA Rules 5210 and 2010... Read More

Penalties: $5,000.00
Respondent: Quinn Daniel Campbell
Violation: In March 2016, Campbell removed nonpublic personal customer information from the Firm without MetLife’s or the customers’ knowledge or consent. As a result, Campbell 2 violated FINRA Rule 2010 by causing MetLife to violate the SEC’s Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information (“Regulation S-P”)... Read More

Penalties: $10,000.00
Respondent: Robert Silverman
Violation: From January 2016 to August 2018 (the "Relevant Period"), while associated with Cetera, Respondent effected transactions in his customer's accounts based on instructions given to him by the customer's son-in-law, who was not authorized to direct transactions in the customer's accounts. By virtue of this misconduct, Respondent made unauthorized transactions in violation of FINRA Rule 2010... Read More

Penalties: $25,000.00
Respondent: TPEG Securities, LLC
Violation: Between March 2016 and August 2018 (the "Relevant Period"), TPEG Securities failed to timely file certain offering documents with FINRA in 34 of its private placement offerings as required, in violation of FINRA Rules 5123 and 2010. Additionally, the Firm failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with FINRA Rule 5123 because it did not designate any individual to be responsible for filing the required offering documents or monitoring to ensure the filings were timely made... Read More

SEC

18 Enforcement Documents

$22,950,669.58 in Fines

Penalties: $900,000.00
Respondent: Argo Group International Holdings, Ltd.,
Violation: Argo violated Rule 12b-20 under the Exchange Act, which requires that, in addition to the information expressly required to be included in a statement or report filed with the Commission, there shall be added such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading. As a result of the conduct described above, Argo violated Section 13(b)(2)(A) of the Exchange Act, which requires reporting companies to make and keep books, records and accounts which, in reasonable detail, accurately and fairly reflect their transactions and dispositions of their assets... Read More

Penalties: N/A
Respondent: Todd A. Esh
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”) and Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Todd A. Esh (“Respondent”)... Read More

Penalties: N/A
Respondent: Tamara Steele
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate an in the public interest that administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”), against Tamara Steele (“Steele” or “Respondent”)... Read More

Penalties: N/A
Respondent: Navellier & Associates, Inc., and Louis Navellier
Violation: The court previously granted partial summary judgment in favor of the SEC on February 13, 2020, holding that Navellier & Associates and Mr. Navellier violated the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The court found that the defendants knew there were misleading statements in their marketing materials and that there had been inadequate due diligence, yet they failed to inform their clients. Instead, as the court determined, the defendants continued to sell the Vireo AlphaSector investment strategies despite their knowledge that representations about the strategies were false and misleading... Read More

Penalties: $373,841.88
Respondent: Jana Faith Kiena, CPA
Violation: As a result of the conduct described above, Kiena 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: $3,983,661.50
Respondent: Fifth Street Management, LLC
Violation: On December 3, 2018, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Section 21C of the Securities Exchange Act of 1934, Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, and Section 9(f) of the Investment Company Act of 1940 Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (the “Order”)1 against Fifth Street Management, LLC (“Fifth Street”). In the Order, the Commission found, in relevant part, that, in 2013 and 2014, Fifth Street improperly allocated to Fifth Street’s former BDC clients -- Fifth Street Finance Corp. (“FSC”) and Fifth Street Senior Floating Rate Corp. (“FSFR”) (collectively, the “BDC Clients”) -- rent and other overhead expenses, and certain compensation expenses that Fifth Street should have paid... Read More

Penalties: N/A
Respondent: E*Hedge Securities, Inc., et al.
Violation: According to the SEC's complaint, from mid-April 2020 to the present, E*Hedge and Parks, while operating COVID-19-related investment websites, have failed to produce books and records requested by SEC examination staff, as required by the Investment Advisers Act of 1940. The complaint alleges that this is the second time E*Hedge and Parks have failed to respond to an SEC examination attempt. The complaint further alleges that E*Hedge is improperly registered with the Commission as an Internet investment adviser because it does not meet the applicable registration requirements, and does not otherwise appear to be qualified for registration with the Commission... Read More

Penalties: N/A
Respondent: Douglas Leighton
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 Douglas Leighton (“Leighton” or “Respondent”)... Read More

Penalties: N/A
Respondent: Daniel F. Putnam, Jean Paul Ramirez Rico, Angel A. Rodriguez, MMT Distribution, LLC, R & D Global
Violation: The SEC's complaint, filed under seal on May 7, 2020, charges Putnam, Ramirez, Rodriguez, MMT Distribution, and R & D Global 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. The complaint further charges Putnam, Ramirez, and MMT Distribution with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act, and names Putnam's father, Richard T. Putnam, as a relief defendant. In addition to the asset freeze and other emergency relief obtained, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties... Read More

Penalties: N/A
Respondent: Christopher D. Larson (CPA),
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Christopher D. Larson (“Respondent”) pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice... Read More

Penalties: N/A
Respondent: Advantage Car Centre Limited
Violation: ACCL has failed to comply with the regulatory requirement to submit the Return. ACCL has not been open and co-operative in all its dealings with the Authority, in that ACCL has failed to respond adequately to the Authority's repeated requests for it to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that it is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More

Penalties: N/A
Respondent: William Vescio
Violation: As a result of the negligent conduct described above, Vescio willfully violated Section 206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client.” Scienter is not required to establish a violation of Section 206(2), but rather may rest on a finding of negligence... Read More

Penalties: $15,992,441.00
Respondent: U.S. Bancorp Investments, Inc.
Violation: As a result of the conduct described above, USBI willfully4 violated Section 206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to “engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client.” Scienter is not required to establish a violation of Section 206(2), but rather may rest on a finding of negligence. As a result of the conduct described above, USBI willfully violated Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require a registered investment adviser to adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder... Read More

Penalties: $1,700,725.20
Respondent: Train, Babcock Advisors LLC
Violation: (“TBA”), an investment adviser registered with the Commission, in connection with certain client accounts for which TBA’s principals acted as trustee and over which TBA had custody. First, two principals of TBA misappropriated more than $10 million collectively from two TBA client accounts in separate fraudulent schemes that spanned 12 years. Second, TBA failed to comply with the requirements of Rule 206(4)-2 under the Advisers Act (the “Custody Rule”) because TBA failed to obtain surprise examinations for certain client accounts for which it had custody. Third, TBA failed to adopt and implement policies and procedures reasonably designed to prevent violations of the Advisers Act and its rules, particularly as to the safeguarding of client assets. Finally, TBA made false statements in a number of its Forms ADV filed with the Commission... Read More

Penalties: N/A
Respondent: Jason Taylor
Violation: The Authority has concluded, on the basis of the facts and matters and conclusions described in the Warning Notice, and in the Decision Notice, that Mr Taylor is not a fit and proper person to perform any function in relation to any regulated activity carried on by any authorised person, exempt person or exempt professional firm, as his conduct demonstrates a clear and serious lack of honesty, integrity and reputation. Specifically, Mr Taylor: (a) was convicted, upon his own confession, on 14 January 2019, of attempting to acquire criminal property; and (a) was sentenced on 18 January 2019 to three and a half years imprisonment... Read More

X