Financial Enforcement Actions | Week of October 28 to November 02

Weekly Enforcement Action Tracker

FTC

3 Enforcement Documents

$0.00 in Fines

Penalties: TBD
Respondent: Social Finance, Inc. and Sofi Lending Corp.
Violation: Since at least April 2016, they made prominent false statements about loan refinancing savings in television, print, and Internet advertisements… Read More

Penalties: TBD
Respondent: Campbell Capital LLC
Violation: The defendants’ employees often completed forms that showed they demanded more money than consumers allegedly owed, also known as “overbiffing” in the debt collection industry. In many cases, according to the complaint, consumers agreed to pay more than what they allegedly owed… Read More

Penalties: TBD
Respondent: Simple Health Plans LLC
Violation: The defendants misled people to think they were buying comprehensive health insurance that would cover preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing… Read More

FINRA

17 Enforcement Documents

$3,332,500.00 in Fines

Penalties: $2,750,000.00
Respondent: LPL Financial LLC
Violation: As a result of the AML program and supervisory failures, the Firm failed to file with the government and with FINRA information critical to the protection of investors and the public… Read More

Penalties: $25,000.00
Respondent: W. Michael Rosenberg
Violation: Between November 2013 and September 2015, Rosenberg failed to disclose in writing to Intrepid that he had 13 brokerage accounts that he held away from Intrepid, in violation of NASD Rule 3050(c) and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Richard Chard Aleen Riemer, Jr.
Violation: Riemer failed to disclose, and did not timely disclose, two tax liens and a bankruptcy on his Form U4 and did not disclose them on his firm’s annual compliance certifications… Read More

Penalties: N/A
Respondent: Thaddeus J. North
Violation: Failing to establish a reasonable supervisory system for the review of electronic correspondence, failing to reasonably review electronic correspondence, and failing to report a relationship with a statutorily disqualified person… Read More

Penalties: N/A
Respondent: Judith Bufis
Violation: Bufis violated FINRA Rules 8210 and 2010 in October 2018 by failing to provide documents and information as requested pursuant to FINRA Rule 8210. In response to a request for documents and information pursuant to FINRA Rule 8210, Respondent, through her counsel, stated that she would not provide the materials requested, and would not cooperate in the future… Read More

Penalties: $12,500.00
Respondent: Michael E. Heath
Violation: Respondent created 1-2 page account performance summaries for his firm clients which he regularly used in face-to-face meetings. These summaries, however, failed to comply with FINRA rules on communications with the public, in violation of NASD Rule 2210(d)(1)(A), successor FINRA Rule 2210(d)(1)(A)? and FINRA Rule 2010… Read More

Penalties: $500,000.00
Respondent: Windsor Street Capital, L.P. (f/k/a Meyers Associates, L.P.)
Violation: Respondent firm failed to establish and maintain a reasonable supervisory system and failed to reasonably supervise two registered representatives who engaged in unsuitable trading… Read More

Penalties: N/A
Respondent: D.A. Davidson & Co.
Violation: Davidson failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Davidson violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Jason David
Violation: Respondent Jason David possessed unauthorized study materials at, and cheated on, two Series 66 qualification exams in January and February 2017, in violation of NASD Rule 1080 and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Bruce Plyer
Violation: Respondent violated FINRA Rules 8210 and 2010 by failing to appear and provide testimony as requested pursuant to FINRA Rule 8210 in connection with an investigation concerning allegations that Respondent engaged in unauthorized trading in customer accounts… Read More

Penalties: $5,000.00
Respondent: James E. Barnes
Violation: From August 2015 through March 2016 (the “Relevant Period”), while he was associated, but not registered, with MML, Barnes solicited the sales of variable annuities to at least three customers of the Firm. Those activities required that Barnes be registered with FINRA. By engaging in activities at MML that required registration, despite not being registered with FINRA, Barnes violated NASD Rule 1031 and FINRA Rule 2010… Read More

Penalties: $35,000.00
Respondent: Ascensus Financial Services
Violation: From October 1, 2014 through August 31, 2017 (the “Relevant Period”), Ascensus conducted a securities business while failing to meet its net capital requirements, in violation of Section 15(c) of the Securities Exchange Act of 1934 (“Exchange Act”) and Exchange Act Rule 15c3-1 promulgated thereunder, and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Jonathan Freehill
Violation: Between June and July 2014, Freehill coirverted$5,000 firma customer’s Finn account. By converting customer furls, Reehill violated FINRA Rules 2150(a) and 2010… Read More

Penalties: N/A
Respondent: David C. Ferwerda
Violation: During the course of an ongoing examination, Ferwerda failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. Ferwerda thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: David C. Ferwerda
Violation: During the course of an ongoing examination, Ferwerda failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. Ferwerda thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: John Paul Angelone
Violation: Angelone will not appear for on-the-record testimony in response to FINRA’s Rule 8210 request… Read More

Penalties: N/A
Respondent: Terrance S. Hood
Violation: Between January 2015 and December 2016, Hood submitted falsified receipts in order to receive childcare reimbursements from Merrill Lynch that he was not qualified to receive. As a result, Hood converted $4,910 from the Firm in violation of FINRA Rule 2010… Read More

SEC

19 Enforcement Documents

$22,862,101.15 in Fines

Penalties: $13,828,155.00
Respondent: Charles A. Banks, IV
Violation: Banks fraudulently induced the former professional athlete to invest $7.5 million in a sports team apparel and merchandise company based on a series of misrepresentations about the investment and allegedly misappropriated funds from his client… Read More

Penalties: N/A
Respondent: Yorkville Advisors, LLC, Mark Angelo, and Edward Schinik
Violation: On May 18, 2018, Judge Daniels approved the parties’ joint stipulation of dismissal, with prejudice, as to all remaining claims against Defendants… Read More

Penalties: TBD
Respondent: Sean Kelly et al.
Violation: Sean Kelly used his companies, Lion’s Share Financial of East Cobb, Inc., Lion’s Share & Associates, Inc., and Lionsshare Tax Services, LLC, to raise at least $1 million from 12 investors, including elderly retirees, promising that he would invest their funds in a variety of investment products including private placements and real estate funds. Rather than investing the money, Kelly spent it on personal expenses including Super Bowl tickets, luxury vacations, and cash withdrawals… Read More

Penalties: N/A
Respondent: Roger Knox et al.
Violation: Knox and Wintercap helped microcap securities holders evade federal securities laws that restrict sales by large shareholders. The complaint charges that Knox and Wintercap helped sellers conceal their stock ownership and provided anonymous access to brokerage accounts to sell the shares in the U.S. market… Read More

Penalties: $307,510.15
Respondent: Aric Yerusalem Swartz
Violation: Swartz participated in a fraudulent scheme to create and sell public shell corporations… Read More

Penalties: TBD
Respondent: SEC Complaint – Sean Kelly et al.
Violation: This matter involves an ongoing fraudulent scheme by Sean Kelly, a registered stockbroker, and various entities that he operates under the “Lion’s Share” umbrella. Defendants Lion’s Share & Associates, Inc. (“LS Associates”), Case 1:18-cv-04939-TCB Document 1 Filed 10/25/18 Page 1 of 21 -2- Lionsshare Tax Services, LLC (“LS Tax”), and Lion’s Share Financial of East Cobb, Inc. (“LS Financial”) (collectively “Lion’s Share”) are all involved in Kelly’s fraudulent scheme… Read More

Penalties: $391,436.00
Respondent: Brian Weber and Bebida Beverage Co.
Violation: Weber devised and operated a multi-pronged scheme, who created a fictitious convertible note and then, by deceiving Bebida’s transfer agent, had the note converted into common shares that were sold to the public with the proceeds transferred back to Bebida… Read More

Penalties: TBD
Respondent: SEC Complaint – Brian Weber and Bebida Beverage Co.
Violation: From January 2014 through December 2015, Bebida, by and through its CEO and President Weber, engaged in a three-pronged scheme for the purpose of unlawfully generating cash to support its failing business operations and for Weber’s benefit. Each part of the scheme Case 1:18-cv-05019 Document 1 Filed 09/05/18 Page 1 of 14 PageID #: 1 2 involved Weber deceiving Bebida’s transfer agent (the “Transfer Agent”) and the public, in violation of the federal securities laws… Read More

Penalties: TBD
Respondent: 1Pool Ltd. a.k.a. 1Broker and Patrick Brunner
Violation: Brunner and 1Broker failed to transact its security-based swaps on a registered national exchange, and failed to properly register as a security-based swaps dealer… Read More

Penalties: TBD
Respondent: SEC Complaint – 1Pool Ltd. a.k.a. 1Broker and Patrick Brunner
Violation: From at least 2012 until September 2018, the Defendants have illegally offered and sold security-based swaps to U.S. investors through their website 1broker.com while failing to file a registration statement with the SEC. As 1Broker’s CEO and sole shareholder, Brunner controls 1Broker and its operations. He is also the developer of the 1broker.com platform… Read More

Penalties: TBD
Respondent: Timothy J. Atkinson, et al., – Timothy J. Atkinson, et al., Ronald C. Montano, et al., Justin Blake Barrett and Grayson Brookshire
Violation: This case concerns U.S.-based marketers who engaged in a massive fraud involving the offer and sale of securities called “binary options” through false, misleading and otherwise deceptive videos, websites, and other forms of marketing promoted on the Internet and disseminated via spam email to tens of millions of prospective investors in the U.S. and globally… Read More

Penalties: TBD
Respondent: Douglas P. Simanski
Violation: Douglas P. Simanski raised over $3.9 million from approximately 27 of his brokerage customers and investment advisory clients, many of them retired or elderly, by telling them that he would invest their money in either a “tax free” fixed rate investment, a rental car company, or one of two coal mining companies in which Simanski claimed to have an ownership interest… Read More

Penalties: $4,142,500.00
Respondent: Ronald C. Montano, et al., – Timothy J. Atkinson, et al., Ronald C. Montano, et al., Justin Blake Barrett and Grayson Brookshire
Violation: Created and disseminated elaborate rags-to-riches videos to trick retirees and other retail investors into opening brokerage accounts and trading high-risk securities known as binary options… Read More

Penalties: TBD
Respondent: SEC Complaint – Douglas P. Simanski
Violation: This matter involves a fraudulent securities offering conducted by Douglas P. Simanski (“Simanski”), a registered representative and investment adviser who defrauded investors in and around Altoona, Pennslyvania for more than a decade… Read More

Penalties: TBD
Respondent: Justin Blake Barrett and Grayson Brookshire – Timothy J. Atkinson, et al., Ronald C. Montano, et al., Justin Blake Barrett and Grayson Brookshire
Violation: Beginning in at least January 2014 through June 2016 (“Relevant Period”), Justin Blake Barrett and his brother-in-law and business partner, Grayson Brookshire (collectively “Defendants”), launched and disseminated numerous marketing campaigns that fraudulently solicited and induced investors to open and fund unregistered, off-exchange binary options trading accounts… Read More

Penalties: $4,142,500.00
Respondent: Timothy J. Atkinson, et al., Ronald C. Montano, et al., Justin Blake Barrett and Grayson Brookshire
Violation: Created and disseminated elaborate rags-to-riches videos to trick retirees and other retail investors into opening brokerage accounts and trading high-risk securities known as binary options… Read More

Penalties: $50,000.00
Respondent: Brian Pappas, et al.
Violation: Brian Pappas, the former CEO of Creative Learning Corp., in August 2017 with fraud for making numerous false statements concerning payments to his family members, his business experience, his personal financial history, and his evaluation of the company’s disclosure and financial reporting controls… Read More

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