Financial Enforcement Actions | Week of October 14 to October 19
Respondent: Robbi J. Jones, Kipling Jones & Company
Violation: Respondent Robbi J. Jones caused Respondent Kipling Jones & Co., LTD. (“KJC”) to willfully create and maintain inaccurate books and records and to file materially inaccurate FOCUS Reports… Read More
Respondent: Morgan Stanley & Co. LLC
Violation: The Staff determined that during the ISO Review Period, the Firm violated Rule 611(c) of Regulation NMS, NASD Rule 3010 (before December 1, 2014), FINRA Rule 3110 (beginning December 1, 2014) and FINRA Rule 2010… Read More
Respondent: Chris R. Kubiak
Violation: Between approximately June 2015 and August 2018 (the “Relevant Period”), while associated with a FINRA member firm, Kubiak converted customer funds in violation of FINRA Rules 2150(a) and 2010… Read More
Respondent: J.P. Morgan Securities LLC
Violation: During the Relevant Period, the Firm failed to detect these issues, which cost customers $4.4 million. As discussed in more detail below, the Firm violated NASD Rule 3010(a) (for the period prior to December 1, 2014), FINRA Rule 3110(a) (for the period on and after December 1, 2014) and FINRA Rule 2010… Read More
Respondent: Lenox Financial Services, Inc.
Violation: Between September 28, 2012 and November 23, 2015, Lenox failed to make required financial interest and beneficial ownership disclosures in research reports, in violation of NASD Rule 2711(h)(1)(A) and 2711(h)(1)(B), and failed to prevent trading in research analyst accounts, in violation of NASD Rule 2711(g)(2). Lenox also failed to establish a supervisory system reasonably designed to achieve compliance with these requirements, in violation of NASD Rule 3010(a) (for conduct before December 1, 2014) and FINRA Rule 3110(a) (for conduct on and after December 1, 2014)… Read More
Respondent: MBSC Securities Corporation
Violation: During the period January 2008 through April 2017 (the “Relevant Period”), MBSC failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to monitor the transmittal of funds from customer accounts to third parties. As a result, based upon instructions from two third party advisors, MBSC disbursed $971,289.07 in fees from accounts of approximately 75 customers to the advisors that exceeded the fees to which the advisors were entitled pursuant to their management agreements with MBSC’s customers. MBSC thereby violated NASD Rules 3010, 3012 and 2110 and FINRA Rules 3110, 3110(c)(2) and 2010… Read More
Respondent: Tracy Michelle Lund
Violation: Lund refused to provide information requested by FINRA staff pursuant to FINRA Rule 8210. Lund thereby violated FINRA Rules 8210 and 2010… Read More
Respondent: Christopher M. Herrmann
Violation: In September 2013, and again in October 2014, Herrmann recommended annuity transactions, while failing to facilitate the transactions as a tax-free 1035 exchange, which resulted in significant tax liabilities to the customers. Herrmann’s recommendations were not suitable for his customers, because the recommendations did not take into account his customers’ tax status and the tax consequences of the transactions he recommended to the customers. In so doing, Herrmann violated FINRA Rules 2111 and 2010… Read More
Respondent: Eric Kunis
Violation: Between February 2012 and January 2017 (the “Relevant Period”), Kunis engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts (“UlTs”) in connection with 11 customer accounts. Based on the foregoing, Kunis violated NASD Rule 2310 (for conduct prior to July 9, 2012), FINRA Rule 2111 (for conduct on or after July 9, 2012) and FINRA Rule 2010… Read More
Respondent: Maxim Group LLC
Violation: From January 1, 2012 to January 31, 2017 (the “Relevant Period”), Maxim failed to establish and maintain a supervisory system, and establish, maintain and enforce written supervisory procedures, reasonably designed to detect and prevent unsuitable short-term trading in Unit Investment Trusts (“UITs”). Based on the foregoing, Maxim violated NASD Rule 3010 (for conduct prior to December 1, 2014), FINRA Rule 3110 (for conduct on or after December 1, 2014) and FINRA Rule 2010… Read More
Respondent: SEC Complaint – Bryan B. Long
Violation: In May and June 2015, Long bought speculative call options on Xoom stock based on material nonpublic information about the planned acquisition that he misappropriated from his employer, in advance of the announcement of the deal. At the time of Long’s trades, he was eBay’s Director of SEC Reporting… Read More
Respondent: Bryan B. Long
Violation: Long purchased Xoom call options in late May 2015 shortly after PayPal made its initial acquisition offer. Approximately one month later, after learning that the deal was moving forward and could be announced in “early July,” Long allegedly engaged in a second round of illegal trades, purchasing additional Xoom call options that were due to expire in less than a month. As alleged in the complaint, Long reaped almost $36,000 in ill-gotten gains by selling all of the options after PayPal announced it was acquiring Xoom on July 1, 2015… Read More
Respondent: Chile Mining Technologies Inc.
Violation: LVEN has failed to comply with Exchange Act Section 13(a) and Rules 13a1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the period ended September 30, 2013… Read More
Respondent: Mark R. Graham, Blue Capital Management, Inc. and Blue Alternative Asset Management, L.L.C.
Violation: On October 15, 2018, the Commission staff requested the appointment of Miller Kaplan as the Tax Administrator for the QSF in the above-referenced proceeding… Read More
Respondent: Fern Holdings Corp., et al.
Violation: Global Food 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, 2014… Read More
Respondent: BKS Advisors LLC and Robert Denha
Violation: On August 17, 2018, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Sections 203(f) and 203(k) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial 2 Sanctions and a Cease-and-Desist Order (“Order”)1 against Roger T. Denha (“Denha”)… Read More
Respondent: Richard J. Greenlaw et al.
Violation: Beginning in 2014, Richard J. Greenlaw, of Kittery, Maine, raised approximately $500,000 from at least 59 investors by offering securities in twenty cannabis-related entities that he formed, which purportedly sold medical marijuana products that did not contain THC, the chemical compound responsible for most of marijuana’s psychological effects… Read More
Respondent: John H. Rogicki
Violation: Between 2004 and 2016, Rogicki perpetrated a fraudulent scheme in which Rogicki misappropriated approximately $9 million from a charitable foundation advisory client for which Rogicki served as President, Trustee and investment adviser… Read More
Respondent: Ross McLellan
Violation: Violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and aiding and abetting violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder by others at State Street… Read More
Respondent: Americas Wind Energy Corporation, et al.
Violation: CUAU 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, 2013… Read More
Respondent: Jean Danhong Chen, Tony Jianyun Ye, Kai Hao Robinson, Kuansheng Chen, Law Offices of Jean D. Chen, A Professional Corporation, Tree Lined Holdings, LLC, And Golden State Regional Center, LLC
Violation: Jean Danhong Chen, Tony Jianyun Ye, and Law Offices of Jean D. Chen, with the assistance of a personal friend, Kuansheng Chen, secured over $10 million in undisclosed commissions by selling EB-5 securities to hundreds of Chen’s legal clients… Read More
Respondent: SEC Complaint – Jean Danhong Chen, Tony Jianyun Ye, Kai Hao Robinson, Kuansheng Chen, Law Offices of Jean D. Chen, A Professional Corporation, Tree Lined Holdings, LLC, And Golden State Regional Center, LLC
Violation: This case involves fraud, self-dealing, and unregistered brokerage activity in violation of the federal securities laws. Defendants Attorney Jean Chen, her law firm, Law Offices of Jean D. Chen, and her husband, Tony Ye, were paid over $12 million in undisclosed commissions to sell securities to their legal clients in offerings under the federal EB-5 Immigrant Investor Program… Read More
Respondent: Michael B. Rothenberg
Violation: In furtherance of this scheme, Rothenberg used various deceptive acts to both (i) misappropriate fund and fund investor money, and (ii) create the false appearance that the misappropriated money was used for legitimate fund expenses or investments or had otherwise been paid back. Rothenberg used the misappropriated funds to finance his personal business ventures and his lifestyle, and his deceptive acts have allowed him to continue his scheme for years… Read More
Respondent: Zachary S. Berkey
Violation: From April 1, 2013, through December 31, 2014, Berkey violated the antifraud provisions of the federal securities laws by recommending an investment strategy that he had no reasonable basis to believe would be suitable for anyone, recommending an investment strategy that was unsuitable for three customers, making material misrepresentations and omissions regarding the investment strategy that he recommended to his customers, churning customer accounts, and engaging in unauthorized trading… Read More
Respondent: RealPage, Inc.
Violation: Failed to take reasonable steps to ensure the accuracy of tenant screening information that it provided to landlords and property managers, a violation of federal law that caused some potential renters to be falsely associated with criminal records… Read More
Respondent: Regenerative Medical Group, Inc.
Violation: A California-based physician and the two companies he controls have settled charges of deceptively advertising that “amniotic stem cell therapy” can treat serious diseases, including Parkinson’s disease, autism, macular degeneration, cerebral palsy, multiple sclerosis, and heart attacks… Read More