Financial Enforcement Actions | Week of October 12 to October 18

Financial-Enforcement-Actions-Week-of-October-12-to-October-18

Financial-Enforcement-Actions-Week-of-October-12-to-October-18

FTC

1 Enforcement Document

$0.00 in Fines

Penalties: N/A
Respondent: NatureCity, LLC
Violation: The FTC brings this action under Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 53(b), to obtain permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief for Defendants’ acts or practices in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52, in connection with the advertising, marketing, distribution, and sale of products purporting to improve cholesterol and triglycerides, relieve chronic pain, and mitigate or treat various diseases and health conditions, including ulcerative colitis, diabetes, and acid reflux… Read More

SEC

17 Enforcement Documents

$190,000.00 in Fines

Penalties: N/A
Respondent: Cetera Advisors, LLC and Cetera Advisor Networks LLC
Violation: Cetera Advisor Networks breached its fiduciary duty and defrauded retail advisory clients by, among other things, failing to disclose conflicts of interest related to the firm’s receipt of undisclosed compensation in the form of 12b-1 fees, revenue sharing, administrative fees, and mark-ups. The SEC’s initial complaint against Cetera Advisors LLC, filed in federal court in Colorado in August, charged Cetera Advisors LLC with similarly failing to adequately disclose to its advisory clients unlawful practices concerning undisclosed compensation and the conflicts of interest associated with them… Read More

Penalties: $150,000.00
Respondent: Domenick Migliorato
Violation: Migliorato failed to take reasonable steps to address whether ICBCFS personnel under his supervision confirmed ownership of the underlying ordinary shares that purportedly backed the ADRs to be pre-released. As a result, under Section 15(b)(6) of the Exchange Act, Migliorato failed reasonably to supervise employees assigned to ICBCFS’s securities lending desk, who were subject to his supervision, with a view to preventing and detecting violations of Section 17(a)(3) of the Securities Act by such persons, who committed violations of Section 17(a)(3)… Read More

Penalties: N/A
Respondent: Eric J. “EJ” Dalius et al.
Violation: The amended complaint alleges that defendants Dalius, Evans, and the Saivian companies falsely claimed that Saivian funded its cash back payments to investors by selling receipt data submitted by its members. Instead, the defendants operated a Ponzi scheme in which they paid returns to investors from the funds of later investors, rather than through legitimate business activity. The amended complaint also alleges that the defendants engaged in an illegal pyramid scheme when they promised a daily residual income stream for affiliates who sold Saivian memberships to downline recruits. The SEC also alleges Dalius concealed his control of the Saivian scheme and failed to disclose his prior criminal conviction in connection with an earlier multilevel marketing fraud… Read More

Penalties: N/A
Respondent: Hengyi International Industries Group, Inc., Jacobs Financial Group, Inc., and Ranger Gold Corp.,
Violation: RNGC has 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, 2013… Read More

Penalties: N/A
Respondent: Kevin B. Merrill, et al.
Violation: The criminal charges against Merrill stem from the same misconduct alleged in the SEC’s complaint, filed on September 13, 2019 in federal district court in Baltimore. From at least 2013 to 2018, Merrill and co-defendant Jay B. Ledford allegedly attracted investors to the Ponzi-like scheme by making false statements about how investors’ money would be used and propping up their misstatements through the creation of sham entities and fraudulent documents. Rather than use investor funds to acquire and service debt portfolios as promised, the amended complaint alleges that defendants used the money to make Ponzi-like payments to investors and to fund Merrill’s and Ledford’s extravagant lifestyles. Ledford and another co-defendant, Cameron R. Jezierski, entered guilty pleas in the parallel criminal case and are awaiting sentencing… Read More

Penalties: $40,000.00
Respondent: Philip R. Jacoby, et al.
Violation: The SEC’s action, filed November 2, 2017, charged Osiris with routinely overstating company performance and issuing fraudulent financial statements for a period of nearly two years, and charged several of its former officers for related misconduct. The SEC alleged that Montgomery, Osiris’s former chief business officer, caused Osiris to book fictitious revenue and provided false information to Osiris’s auditors… Read More

Penalties: N/A
Respondent: Michael J. Starkweather and Andiamo Corporation, William White
Violation: According to the SEC’s second complaint, filed in federal district court in Brooklyn on September 30, 2019, Michael J. Starkweather of Ohio, while serving as CEO of Andiamo, fraudulently caused Andiamo to issue a false and misleading press release announcing the “unveiling” of a smartphone Andiamo had purportedly developed, touting the phone’s technical features, and claiming that the phone was available for distribution. In reality, the complaint alleges, the purported smartphone did not exist, as Starkweather knew. The complaint further alleges that Starkweather accepted payment in connection with the issuance of forward-looking press releases, which were designed to prime the market in advance of the fraudulent press release… Read More

Penalties: N/A
Respondent: William White
Violation: According to the SEC’s second complaint, filed in federal district court in Brooklyn on September 30, 2019, Michael J. Starkweather of Ohio, while serving as CEO of Andiamo, fraudulently caused Andiamo to issue a false and misleading press release announcing the “unveiling” of a smartphone Andiamo had purportedly developed, touting the phone’s technical features, and claiming that the phone was available for distribution. In reality, the complaint alleges, the purported smartphone did not exist, as Starkweather knew. The complaint further alleges that Starkweather accepted payment in connection with the issuance of forward-looking press releases, which were designed to prime the market in advance of the fraudulent press release… Read More

Penalties: N/A
Respondent: Gyrotron Technology, Inc. and Nation Energy, Inc.,
Violation: GYTI has 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 September 30, 2016… Read More

Penalties: N/A
Respondent: Blockchain Solutions, Inc. and Universal Resources (f/k/a Global Immune Technologies Inc.),
Violation: GIMU has 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 September 30, 2013… Read More

Penalties: N/A
Respondent: Richard Andrew Mallion
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”) against Richard Andrew Mallion (“Respondent”)… Read More

Penalties: N/A
Respondent: Donald Toomer, Jr.
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 Donald Toomer, Jr. (“Respondent”)… Read More

Penalties: N/A
Respondent: Green Ballast, Inc. and Lithium Exploration Group, Inc.,
Violation: LEXG has 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 March 31, 2018… Read More

FRS

1 Enforcement Document

$1,000,000.00 in Fines

Penalties: $1,000,000.00
Respondent: Michael Joseph Erickson
Violation: “Erickson, without the prior written approval of the Board of Governors and, where necessary pursuant to section 8(e)(7)(B) of the FDI Act, 12 U.S.C. § 1818(e)(7)(B), another Federal financial institutions regulatory agency, is hereby and henceforth prohibited from participating in any manner in the conduct of the affairs of any institution or agency specified in section 8(e)(7)(A) of the FDI Act, 12 U.S.C. § 1818(e)(7)(A), including, but not limited to, any insured depository institution or any holding company of an insured depository institution, or any subsidiary of such holding company, or any foreign bank or company to which subsection (a) of 12 U.S.C. § 3106 applies and any subsidiary of such foreign bank or company”… Read More

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