Financial Enforcement Actions | Week of October 21 to October 26

Weekly Enforcement Action Tracker

FRS

1 Enforcement Document

$0.00 in Fines

Penalties: N/A
Respondent: AllNations Bank
Violation: On October 18, 2018, the board of directors of the Bank, at a duly constituted meeting, adopted a resolution authorizing and directing Eastman Switch to enter into this Agreement on behalf of the Bank, and consenting to compliance with each and every provision of this Agreement by the Bank… Read More

FTC

3 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Watson Pharmaceuticals / Actavis Inc.
Violation: Watson Pharmaceuticals, Inc.’s proposed acquisition of Actavis Inc. would have been anticompetitive in the markets for 21 current and future generic drugs used to treat a wide range of conditions ranging from hypertension and diabetes to anxiety and attention deficit hyperactivity disorder (ADHD)… Read More

Penalties: N/A
Respondent: Jason Cardiff (Redwood Scientific Technologies, Inc.)
Violation: The defendants enrolled consumers in a negative option continuity plan without their knowledge or consent. Defendants allegedly charged consumers monthly for more product and continued to do so unless consumers took affirmative steps to cancel, and often put up roadblocks to canceling… Read More

Penalties: TBD
Respondent: Marathon Petroleum, et al.
Violation: The acquisition would harm competition for both retail gasoline and retail diesel in five local markets in New York State: Farmington, Fayetteville, Johnson City, Rochester, and Whitney Point. In four of the five local gasoline retail markets, the proposed acquisition would reduce the number of significant competitors from three to two. In the fifth, it would reduce the number from four to three… Read More

FINRA

4 Enforcement Documents

$58,061.98 in Fines

Penalties: N/A
Respondent: John S. Simoncic
Violation: Between August 2014 and November 2016 (the “relevant period”), while registered with Financial West, Simoncic churned customer accounts, engaged in excessive trading, and made unsuitable recommendations involving transactions in non-traditional exchange 2 traded funds (ETFs) in five accounts held by two customers, one of whom was a senior investor. As a result, Simoncic willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5 promulgated thereunder, and FINRA Rules 2020, 2111 and 2010… Read More

Penalties: $13,515.00
Respondent: Avalon Investment & Securities Group, Inc.
Violation: From November 1, 2013, through May 31, 2016 (the “Relevant Period”), Avalon failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that representatives’ recommendations of variable annuities complied with applicable securities laws and regulations, and FINRA Rules. As a result, the Firm violated FINRA Rules 2330(c) and (d), NASD Rule 3010 (for FINANCIAL INDUSTRY REGULATORY AUTHORITY LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. 2016047823901… Read More

Penalties: $10,000.00
Respondent: Investment Placement Group
Violation: Between May 2013 and April 2016, IPG paid approximately $3.85 million in commissions to two unregistered entities that were each co-owned by a registered person associated with the firm in violation of NASD Rule 2420 and FINRA Rules 2040 and 2010… Read More

Penalties: $34,546.98
Respondent: David Colflesh
Violation: From October 2014 to July 2015, Colflesh recommended three nondiversified mutual funds to approximately ninety customers without having a reasonable basis to believe that his recommendations were suitable for at least some investors because he did not understand the funds’ complexity and potential risks. Further, Colflesh recommended that approximately four dozen of those customers make concentrated investments in the funds, exposing them to a level of risk that was unsuitable given their investment objectives and tolerances for risk. By that conduct, Colflesh violated FINRA Rule 2111 and consequently FINRA Rule 2010… Read More

CFPB

1 Enforcement Document

$232,000.00 in Fines

Penalties: $232,000.00
Respondent: Cash Express, LLC
Violation: Violated the Consumer Financial Protection Act (CFPA) by deceptively threatening in collection letters that it would take legal action against consumers, even though the debts were past the date for suing on legal claims, and it was not Cash Express’s practice to file lawsuits against these consumers… Read More

SEC

15 Enforcement Documents

$9,046,078.00 in Fines

Penalties: $7,575,000.00
Respondent: Logitech International, S.A., Michael Doktorczyk and Sherralyn Bolles, CPA
Violation: Doktorczyk and Bolles, both former officers of Logitech, responsible for the improper accounting for warranty liabilities, which occurred during their employment… Read More

Penalties: N/A
Respondent: Logitech International, S.A., Michael Doktorczyk and Sherralyn Bolles, CPA – Corrected Distribution Plan
Violation: Recurring instances of improper accounting between 2008 and 2013 related to a product write-down, warranty liabilities, and revenue recognition… Read More

Penalties: N/A
Respondent: EMAV Holdings, Inc., et al.
Violation: HZNB 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, 2015… Read More

Penalties: TBD
Respondent: SEC Complaint – Mark E. Fisher and Joseph F. Capuozzo
Violation: In or shortly before November 2013, Marin took steps to secretly take control of VLBI’s publicly traded shares (the “float). Among other things, Marin caused VLBI to issue to himself and affiliated individuals and entities, including Fisher and Capuozzo, more than 50 million free trading VLBI shares – over 90% of the float… Read More

Penalties: TBD
Respondent: Bruce J. Fixelle, Genesis Advisory Services Corp., and Aurora Capital Management, LLC
Violation: From at least 2014 through at least 2017, Bruce J. Fixelle solicited investments from close friends he met through a local community organization, telling them that he was going to invest their money in initial and secondary offerings, which he would then sell before the end of the trading day… Read More

Penalties: N/A
Respondent: Todd Elliott Hitt
Violation: From 2014 to at least September 2018, Hitt, acting individually and through Kiddar Capital and Kiddar Group, raised at least $20 million from at least 29 investors to invest in (i) an office building along the Washington, DC-area Metro line; (ii) construction projects for new homes in Northern Virginia; and (iii) a start-up technology venture… Read More

Penalties: N/A
Respondent: America Greener Technologies, Inc., MV Portfolios, Inc. and Trycera Financial, Inc.
Violation: TRYF 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, 2015… Read More

Penalties: N/A
Respondent: JuQun, Inc., et al.
Violation: Live Brands 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: TBD
Respondent: SEC Complaint – Bruce J. Fixelle, Genesis Advisory Services Corp., and Aurora Capital Management, LLC
Violation: Since at least 2014, and continuing through at least 2017, Fixelle, an investment adviser with a history of securities regulatory violations, made material misrepresentations to investors and used his investment fund, Aurora, and Aurora’s unregistered investment adviser, Case 2:18-cv-15026 Document 1 Filed 10/16/18 Page 1 of 17 PageID: 1 2 Genesis, to perpetrate a scheme to misappropriate investor funds… Read More

Penalties: TBD
Respondent: Mark E. Fisher and Joseph F. Capuozzo
Violation: Fisher and Capuozzo coordinated with Marin and others to launch a marketing campaign touting Valentine’s purported operations. Once the promotional campaign increased the liquidity and price of Valentine’s stock, Fisher and Capuozzo sold a significant portion of their shares, collectively reaping more than $150,000 in stock sale proceeds… Read More

Penalties: TBD
Respondent: SEC Complaint – Alexander C. Burns, et al.
Violation: From March 2013 to February 2014 (the “Relevant Period”), Burns, with the substantial assistance of Scherr, perpetrated multiple schemes to defraud their advisory clients, which were insurance companies and reinsurance trusts… Read More

Penalties: TBD
Respondent: Alexander C. Burns, et al.
Violation: From March 2013 to February 2014, Alexander C. Burns, the majority owner, and control person of Southport Lane Management, LLC, acquired insurance companies and thereby obtained the ability to control the investment decisions for the insurance companies and those companies’ related reinsurance trusts… Read More

Penalties: $83,311.00
Respondent: John Madsen, Andalusian Resorts and Spas, Inc., and Bernard Fried
Violation: Masterminding a pump-and-dump scheme involving Nevada-based penny stock company, Andalusian Resorts, and Spas, Inc. and with recruiting a strawman CEO, Bernard Fried, to conceal Madsen’s secret control of the issuer and his prior guilty plea to mail fraud… Read More

Penalties: N/A
Respondent: Bahamas Concierge, Inc., Emoneco, Inc. and Titanium Healthcare, Inc.
Violation: EMON 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 July 31, 2015… Read More

Penalties: N/A
Respondent: Bitzio, Inc. and Enerpulse Technologies, Inc.
Violation: ENPT 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, 2015… Read More

Penalties: TBD
Respondent: Emilio Francisco
Violation: Francisco and PDC Capital misappropriated at least $9.5 million of investors’ capital contributions to support their business, pay marketing expenses, and support a luxury lifestyle… Read More

Penalties: N/A
Respondent: Swissinso Holding, Inc., SYDYS Corporation and UnifiedOnline, Inc.
Violation: SWHN 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 June 30, 2015… Read More

Penalties: $187,767.00
Respondent: Marilyn R. Thomassen
Violation: Respondent participated in a fraudulent scheme to offer and sell securities in the form of promissory notes issued by entities associated with PDC Capital Group, LLC… Read More

Penalties: N/A
Respondent: Mass Hysteria Entertainment Company, Inc., Stark Naked Bobbers and TOA Holdings, Inc.
Violation: MHYS 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 May 31, 2015… Read More

Penalties: N/A
Respondent: Penny Auction Solutions, Inc., Sebring Software, Inc. and Studio II Brands, Inc.
Violation: Penny Auction 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 February 29, 2016… Read More

Penalties: TBD
Respondent: Joseph Alborano
Violation: From October 2008 through April 2013, Terminus raised approximately $7.9 million from over 200 investors, using various private placement memoranda and business plans to offer and sell Terminus securities… Read More

Penalties: $1,200,000.00
Respondent: Philip Thomas Kueber
Violation: Kueber concealed his control of Cynk and its purportedly non-restricted shares through nominees and straw shareholders. Although Cynk’s stock surged on July 10, 2014, to a high of more than $21 per share (despite having no assets or operations), Kueber was thwarted from profiting from his scheme when the Commission’s July 11, 2014 Order suspended trading in the securities of Cynk… Read More

OCC

1 Enforcement Document

$100,000,000.00 in Fines

Penalties: $100,000,000.00
Respondent: Capital One Bank (USA)
Violation: Failed to adopt and implement a compliance program that adequately covered the required BSA/AML program elements due to an inadequate system of internal controls and ineffective independent testing, and the Bank failed to file all necessary Suspicious Activity Reports (“SARs”) related to suspicious customer activity… Read More

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