Financial Enforcement Actions | Week of September 02 to 07

Weekly Enforcement Action Tracker

FTC

1 Enforcement Document

$0.00 in Fines

Penalties: TBD
Respondent: Sunkey Publishing, Fanmail.com, et al.
Violation: Defendants target potential military recruits and induce them to submit their information by disguising their websites and advertisements as official recruiting channels and representing that the information will be used solely for recruiting purposes. In reality, Defendants are gathering the information to sell as marketing leads to post- secondary schools for a price ranging between $15 and $40 per lead… Read More

FINRA

22 Enforcement Documents

$372,500.00 in Fines

Penalties: N/A
Respondent: Mark C. Cohen
Violation: Between March 2012 and November 2013, while registered with member firm MetLife Securities, Inc., Mark Cohen prepared several false expense reports and submitted them to the Firm seeking reimbursement pursuant to the Firm’s marketing reimbursement program… Read More

Penalties: $10,000.00
Respondent: Richard S. Hughes
Violation: Between April 2015 and May 2016, Hughes made unsuitable recommendations to a senior customer resulting in short-term switches between Unit Investment Trusts (“UlTs”) and Class A-share mutual funds, products designed to be held for the long-term. Hughes also created a script for the customer to use if contacted by the firm about the transactions. The script contained false statements, including that the customer understood the costs associated with the short-term trading of long-term products. Hughes’ conduct violated FINRA Rules 2111 and 2010… Read More

Penalties: $5,000.00
Respondent: Richard H. Yada
Violation: While registered with LPL, Yada used discretion in the accounts of 12 customers without written authorization or acceptance of the accounts as discretionary accounts by LPL in violation of NASD Rule 2510(b) and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Roger Kroeger
Violation: Kroeger acknowledges that he received FINRA’s request and will not appear for on-the-record testimony at any time. By refusing to appear for on-the-record testimony as requested pursuant to FINRA Rule 8210, Kroeger violates FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Jeremy Keith Pritchett
Violation: Pritchett refused to appear for on-the-record testimony in response to FINRA’s Rule 8210 request, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Juergen Weber
Violation: In connection with its investigation into allegations that Weber made unsuitable recommendations and executed unauthorized trades, FINRA staff sent Weber a request for on-the-record testimony pursuant to FINRA Rule 8210. Weber failed to appear for the testimony as requested and informed FINRA staff that he would not appear for testimony at any time. As a result, Weber violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Lincoln Investment Planning, LLC
Violation: Lincoln failed to establish and maintain a supervisory system and written supervisory procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Lincoln 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: Stephen T. Hurtuk
Violation: In July 2018, Hurtuk violated FINRA Rules 8210 and 2010 by failing to cooperate with FINRA’s requests for on the record testimony pursuant to FINRA Rule 8210… Read More

Penalties: $5,000.00
Respondent: Andrew Markman Arthur
Violation: In June 2016 and January 2017, Arthur submitted falsified brokerage account statements to real estate agents in support of two apartment rental applications for himself and another family member. Each statement falsely represented that Arthur maintained an account value of over $1,800,000 when the actual value of the account was nearly zero. By virtue of the foregoing, Arthur violated FINRA 2010… Read More

Penalties: N/A
Respondent: Benjamin S. Johnson
Violation: Johnson violated FINRA Rules 8210 and 2010 by failing to provide documents and information, requested pursuant Rule 8210, in connection with Enforcement’s investigation concerning his failure to timely disclose to FINRA several reportable financial events… Read More

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

Penalties: $27,500.00
Respondent: National Financial Services LLC
Violation: As a result of these reviews, it was determined that the firm submitted Reportable Order Events (“ROEs”) to OATS during the relevant period that contained inaccurate data for institutional clients of the firm and institutional clients of a broker-dealer affiliate of the firm… Read More

Penalties: N/A
Respondent: Edward O. Daniel
Violation: Daniel failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. As a result, Daniel violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: John Ferramosca
Violation: During the period November 2015 through July 2016, Ferramosca falsified the customer contact information, including telephone numbers, of four customers in MLPFS’s computer system, thereby causing the Firm to maintain inaccurate books and records. As a result, Ferramosca violated FINRA Rules 4511(a) and 2010… Read More

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

Penalties: $175,000.00
Respondent: Securities America, Inc.
Violation: Between August 4, 2014, and January 28, 2016 (the “Relevant Period”), SAl 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, SAI violated FINRA Rules 2330(d), and (e), NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on and after December 1, 2014) and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Howard R. Utz
Violation: Utz failed to produce documents and information requested by FINRA pursuant to FINRA Rule 8210 in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $35,000.00
Respondent: StockCross Financial Services, Inc.
Violation: STXG failed to execute a total of 141 orders fully and promptly. Further, for 48 of the 141 orders, the firm failed to use reasonable diligence to ascertain the best market for the subject securities and failed to buy or sell in such market so that the resultant price to the customer was as favorable as possible under prevailing market conditions. Lastly. during the Review Period, STXG’s supervisory system did not provide for supervision reasonably designed to achieve compliance with executing marketable customer orders fully and promptly… Read More

Penalties: TBD
Respondent: Andrew Dean Kramer, Michael Robert Boswell, and TriPoint Global Equities, LLC
Violation: During the period November 2011 through December 2015 (the “Relevant Period”), TriPoint Global Equities, LLC (“TriPoint” or the “Firm”) engaged in the penny stock business, effecting transactions for customers whose primary trading activity involved the deposit and prompt liquidation of low-priced securities (also known as “penny stocks” or “microcap stocks”)… Read More

Penalties: $100,000.00
Respondent: Citigroup Global Markets Inc.
Violation: During this period, CGMI 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… Read More

Penalties: $5,000.00
Respondent: Michael Prcela
Violation: From January 1, 2014 to September 23, 2016 (the “Relevant Period”), Prcela submitted 16 business expense reimbursement requests, totaling approximately $5,300, that he knew were not compliant with the Firm’s reimbursement policies. He obtained Firm approval for these expense reimbursements by providing inaccurate information to the Firm regarding the expenses. As a result, Prcela made improper use of Firm funds in violation of FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Ryan Stefan
Violation: From January 1, 2014, to September 23, 2016 (the “Relevant Period”), Stefan submitted 23 business expense reimbursement requests, totaling approximately $16,000, that he knew were not compliant with the Firm’s reimbursement policies. He obtained Firm approval for these expense reimbursements by providing inaccurate information to the Firm regarding the expenses. As a result, Stefan made improper use of Firm funds in violation of FINRA Rule 2010… Read More

SEC

47 Enforcement Documents

$10,127,936.60 in Fines

Penalties: $5,000,000.00
Respondent: Sanofi
Violation: From at least 2011 to 2015, employees and agents of Sanofi’s subsidiaries in Kazakhstan, Levant (which includes the countries Jordan, Lebanon, Syria, and the region of Palestine), and the Gulf (which includes the countries Bahrain, Kuwait, Qatar, Yemen, Oman, and the United Arab Emirates) acted to provide things of value to foreign officials, including healthcare professionals (“HCPs”), in order to improperly influence them and increase sales of Sanofi products… Read More

Penalties: N/A
Respondent: Michael J. Kipp
Violation: On June 20, 2017, Kipp was convicted of conspiracy to commit securities fraud, in violation of Title 15, United States Code, Sections 78j(b), 78ff, 78m(b)(2)(A), and 78m(b)(5) and Title 17, Code of Federal Regulations, Sections 240.10b-5, 240.13b2-1 and 240.13b2-2, wire fraud in violation of Title 18 United States Code, Section 1343, securities fraud in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and bank fraud in violation of Title 18 United States Code, Section 1344 in United States v. Kipp, No. 3:15-cr-00244-MOC, in the United States District Court for the Western District of North Carolina… Read More

Penalties: N/A
Respondent: David R. Frost
Violation: From at least 2010 to 2016, Frost purchased new issue municipal bonds in primary offerings from underwriters, which he then immediately sold, or “flipped” to broker-dealer customers for a profit… Read More

Penalties: N/A
Respondent: Philip A. Weiner
Violation: From at least 2001 to 2016, Weiner purchased new issue municipal bonds in primary offerings from underwriters, which he then immediately sold, or “flipped” to broker-dealer customers for a profit… Read More

Penalties: N/A
Respondent: Douglas J. Derryberry
Violation: From at least 2011 to the present, Derryberry purchased new issue municipal bonds in primary offerings from underwriters, which he then immediately sold, or “flipped” to broker-dealer customers for a profit… Read More

Penalties: N/A
Respondent: Ralph M. Riccardi
Violation: From at least 2009 to the present, Riccardi directed the purchase of new issue municipal bonds in primary offerings from underwriters, which were then immediately sold, or “flipped” to broker-dealer customers for a profit… Read More

Penalties: TBD
Respondent: SEC Complaint – Tangoe, Inc. et. al.
Violation: Through a variety of misstatements, improper accounting, and artificial transactions, Tangoe overstated its revenues in the annual and quarterly reports it filed with the Commission from 2013 through 2015, thereby violating federal securities laws governing public Case 3:18-cv-01479 Document 1 Filed 09/04/18 Page 1 of 40 2 company reporting… Read More

Penalties: N/A
Respondent: Dewey T. Tran
Violation: From at least 2008 to the present, Tran purchased new issue municipal bonds in primary offerings from underwriters, which he then immediately sold, or “flipped” to broker-dealer customers for a profit… Read More

Penalties: TBD
Respondent: SEC Complaint – Sandy J. Masselli, Jr. et al.
Violation: This case involves a securities offering fraud perpetrated by Masselli, who misappropriated at least hundreds of thousands, and potentially millions, of dollars from retail investors for his own personal use… Read More

Penalties: N/A
Respondent: John Pierrard
Violation: On October 20, 2015, Pierrard pleaded guilty to one count of conspiracy to commit securities fraud, in violation of Title 15, United States Code, Sections 78j(b), 78ff, 78m(b)(2)(A), and 78m(b)(5) and Title 17, Code of Federal Regulations, Sections 240.10b-5, 240.13b2-1 and 240.13b2-2 in United States v. Pierrard, No. 3:15-cr-00238-MOC, in the United States District Court for the Western District of North Carolina… Read More

Penalties: $1,670,000.00
Respondent: Tangoe, Inc. et. al.
Violation: Tangoe, Inc., formerly a public company headquartered in Connecticut, improperly recognized approximately $40 million of revenue out of the total of $566 million reported between 2013 and 2015. In some instances, Tangoe allegedly reported revenue prematurely for work that had not been performed, including service pre-payments, and for transactions that did not produce any revenue at all. The SEC alleges that Donald J. Farias, a Tangoe executive, falsified business records, some… Read More

Penalties: N/A
Respondent: Timothy J. McAloon
Violation: From at least 2011 to the present, McAloon purchased new issue municipal bonds in primary offerings from underwriters, which he then immediately sold, or “flipped” to broker-dealer customers for a profit… Read More

Penalties: N/A
Respondent: David S. Luttbeg
Violation: From at least 2011 to 2014, Luttbeg purchased new issue municipal bonds in primary offerings from underwriters, which he then immediately sold, or “flipped” to broker-dealer customers for a profit… Read More

Penalties: N/A
Respondent: Joanne K. Viard, CPA
Violation: On June 20, 2017, Viard was convicted of one count of conspiracy to commit securities fraud, in violation of Title 15, United States Code, Sections 78j(b), 78ff, 78m(b)(2)(A), and 78m(b)(5) and Title 17, Code of Federal Regulations, Sections 240.10b-5, 240.13b2-1 and 240.13b2-2 in United States v. Viard, No. 3:15-cr-00244-MOC, in the United States District Court for the Western District of North Carolina… Read More

Penalties: N/A
Respondent: Mark Morrow
Violation: From at least 2008 until June 2012, in connection with the sale of promissory notes and equity interests in Detroit Memorial Partners, LLC (“DMP”), Morrow falsely stated to investors that their funds would be secured by interests in real property and assets of DMP, when in fact, DMP had no real property and, at the time, had nominal assets… Read More

Penalties: TBD
Respondent: SEC Complaint – Jeffrey Goldman and Christopher Eikenberry
Violation: The Nonko team lured investors to day-trade through Nonko with promises of generous leverage, low trading commissions, and low minimum deposit requirements. But instead of providing investors with access to a live securities trading platform, as it had promised, the Nonko team secretly provided certain investors with training accounts that merely simulated the placement and execution of trade orders. So when these investors sent funds to Nonko and proceeded to place what they believed were securities trade orders, the orders were never actually routed to the markets. Instead, the Nonko team simply stole the investors’ money, using it, among other things, to fund their personal expenses and to make Ponzi-like payments to those investors who asked to close their Nonko accounts… Read More

Penalties: TBD
Respondent: SEC Complaint – Robert William Dorrance
Violation: Between at least January 2015 and February 2016, Defendant Robert William Dorrance (“Dorrance”) aided and abetted a scheme by David R. Greenlee (“Greenlee”) and David A. Stewart, Jr. (“Stewart”) that resulted in the fraudulent offering and sale of at least $15 million of securities to more than 150 investors… Read More

Penalties: TBD
Respondent: SEC Complaint – In Ovations Holdings, Inc. and Mark Goldberg
Violation: From at least 2014 through 2015 (the “Relevant Period”), Defendants Ovations and Goldberg—a microcap issuer of publicly-traded stock and its chief executive officer, respectively-issued materially false press releases to fraudulently induce investors to buy Ovations stock… Read More

Penalties: TBD
Respondent: In Ovations Holdings, Inc. and Mark Goldberg
Violation: Issuing false and misleading press releases as part of a market manipulation scheme… Read More

Penalties: TBD
Respondent: Jeffrey Goldman and Christopher Eikenberry
Violation: Jeffrey Goldman of West Bloomfield, Michigan, and Christopher Eikenberry of Birmingham, Michigan, participated in and profited from a scheme to defraud Nonko’s customers out of at least $1.4 million… Read More

Penalties: $143,575.00
Respondent: Robert William Dorrance
Violation: Concealing from investors that two convicted criminals ran the company and led a $15 million oil investment scheme affecting more than 150 investors… Read More

Penalties: $181,814.60
Respondent: Steven H. Davis, et al.
Violation: Dewey’s 2010 bond offering fraudulently relied on the firm’s materially misstated financial results for 2008 and 2009, which were incorporated into the private placement memorandum for the offering and provided to investors… Read More

Penalties: $80,000.00
Respondent: Joel N. Burstein
Violation: Burstein aided and abetted Quiros’ misappropriation and misuse of investor money that flowed through various brokerage accounts held at Raymond James. Burstein, who is Quiros’ former son-in-law, managed those accounts… Read More

Penalties: TBD
Respondent: SEC Complaint – Joel N. Burstein
Violation: From approximately June 2008 through March 2014, Defendant Joel N. Burstein aided and abetted violations of the antifraud provisions of the federal securities laws by substantially assisting a massive fraudulent scheme in which the Miami owner and the cheif executive of a Vermont ski resort systematically looted more than $50 million of the more $350 million raised from hundreds of foreign investors through the U.S. Citizenship and Immigration Service’s EB-5 Immigrant Investor Program… Read More

Penalties: $2,527,547.00
Respondent: Mark R. Graham, Blue Capital Management, Inc. and Blue Alternative Asset Management, L.L.C.
Violation: These proceedings arose out of fraudulent conduct by investment advisers BAAM and BCM and their 100% owner and President in connection with their management of various client assets… Read More

Penalties: $225,000.00
Respondent: Joohyun Bahn and a/k/a Dennis Bahn
Violation: From March 2013 through May 2015, Bahn, while acting as a broker for Colliers International Group Inc. (“Colliers”), a foreign private issuer, violated the Foreign Corrupt Practices Act (the “FCPA”) of the Exchange Act, when he attempted to bribe a foreign official of a country in the Middle East in connection with his efforts to broker the sale of an $800 million highrise commercial building in Vietnam, known as Landmark 72… Read More

Penalties: N/A
Respondent: BNY Mellon Securities, LLC and Mark Shaw
Violation: On February 28, 2014, the Commission issued an Order Approving Modified Plan of Distribution, Appointing Fund Administrator, and Setting Fund Administrator Bond Amount… Read More

Penalties: N/A
Respondent: Credit Suisse Securities (USA) LLC and Sanford Michael Katz
Violation: Katz’s practice of putting advisory clients in Class A shares when those clients were eligible for less expensive institutional share classes resulted in Credit Suisse collecting approximately $3.2 million in 12b-1 fees, approximately $1.1 million of which was paid to Katz… Read More

Penalties: TBD
Respondent: SEC Complaint – Barry C. Honig, et al.
Violation: This case involves three highly profitable “pump-and-dump” schemes perpetrated by Honig, Stetson, Brauser, O’Rourke, Groussman, and Frost, and their entities GRQ, SCI, Grander, HSCI, Melechdavid, ATG, Opko, FGIT, and Southern Biotech from 2013 through 2018 in the stock of three public companies (Company A, Company B, and Company C) that, while enriching Defendants by millions of dollars, left retail investors holding virtually worthless shares… Read More

Penalties: $100,000.00
Respondent: BB&T Securities, LLC, as successor entity to BB&T Investment Services, Inc.
Violation: BB&T Investment Services failed to disclose sufficient facts to enable clients to determine that the compensation arrangement between BB&T Investment Services and the Affiliated Adviser created an incentive for BB&T Investment Services and its investment advisory representatives (“Investment Counselors”) to recommend that clients invest in the Affiliated Adviser’s wrap fee program rather than the programs offered by the other two sponsors. By failing to disclose fully its compensation arrangement with the Affiliated Adviser, BB&T Investment Services violated Section 206(2) of the Advisers Act… Read More

Penalties: TBD
Respondent: SEC Complaint – Christopher Davies, et al.
Violation: Between 2012 and 2016, Davies and penny stock issuer ATHI hid from the investing public, among other things, that Davies, who was ATHI’s former CEO, continued to secretly control the Company and that the Company was not actually engaged in any business activity, in an effort to illegally issue millions of shares to entities that Davies controlled… Read More

Penalties: N/A
Respondent: SEC Complaint – Amer Deeba
Violation: Deeba tipping his brothers with material nonpublic information, both brothers sold all of their Qualys shares ahead of the announcement and avoided losses of $456,636 and $124,534, respectively… Read More

Penalties: TBD
Respondent: Barry C. Honig, et al.
Violation: From 2013 to 2018, a group of prolific South Florida-based microcap fraudsters led by Barry Honig manipulated the share price of the stock of three companies in classic pump-and-dump schemes… Read More

Penalties: TBD
Respondent: Christopher Davies, et al.
Violation: Fraudulently controlled a penny stock company from behind the scenes and made false statements about its business plans and operations so he could illegally obtain millions of shares, which he planned to profit on by selling into the market… Read More

Penalties: $200,000.00
Respondent: VSS Fund Management LLC and Jeffrey T. Stevenson
Violation: VSS’s failure to provide the limited partners of a private equity fund it advised, VS&A Communication Partners III, L.P. (“Fund III”), with material information related to a change in value of the Fund III assets in connection with an offer by Stevenson, the owner and managing partner of VSS, to purchase the limited partnership interests… Read More

Penalties: N/A
Respondent: Sarah E. Adams, CPA
Violation: Weatherford improperly inflated its earnings and materially understated its effective tax rate and tax expense through the use of deceptive intercompany tax accounting. The Commission found that Adams and others failed to comply with Public Company Accounting Oversight Board standards related to due professional care, professional skepticism, supervision, staffing, training, and documentation… Read More

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