Financial Enforcement Actions | Week of September 07 to September 13

Financial-Enforcement-Actions-Week-of-September-07-to-September-13

Financial-Enforcement-Actions-Week-of-September-07-to-September-13

FTC

5 Enforcement Documents

$0.00 in Fines

Penalties: N/A
Respondent: Sysco, USF Holding Corp., and US Foods, Inc.
Violation: According to the FTC complaint, a combined Sysco/US Foods would account for 75% of the national market for broadline distribution services. In addition, the parties would also hold high shares in a number of local markets. The Commission also charged that the proposed sale of 11 US Foods distribution centers to Performance Food Group would neither enable PFG to replace US Foods as a competitor nor counteract the significant competitive harm caused by the merger… Read More

Penalties: N/A
Respondent: Manhattan Beach Venture, LLC, et al.
Violation: Based on the facts and violations of law alleged in this Complaint, the Plaintiffs have reason to believe that Defendants are violating or are about to violate laws enforced by the Commission and the State of Minnesota because, among other things, Defendants have knowingly engaged in the unlawful acts and practices alleged in this Complaint. To the extent that Defendants discontinued their unlawful conduct, they did so only after they were contacted by the State of Minnesota and were informed of the State of Minnesota’s investigation… Read More

Penalties: N/A
Respondent: Progress Advocates Group, LLC, et al.
Violation: EAC participated in deceptive acts or practices in violation of the FTC’s Trade Regulation Rule entitled the Telemarketing Sales Rule (“TSR”), 16 C.F.R. § 310, by providing substantial assistance or support to Defendants Progress Advocates Group, LLC dba Student Advocates; Student Advocates Team, LLC; Student Advocates Group, LLC; and Assurance Solutions Services, LLC (collectively, “Corporate Debt Relief Defendants”) and individual defendants, Bradley Jason Hunt and Sean Quincy Lucero, whom EAC allegedly knew, or consciously avoided knowing, were engaged in violations of the TSR, and charges that these acts or practices are deceptive telemarketing acts or practices that violate the TSR, 16 C.F.R. § 310.3(b)… Read More

Penalties: N/A
Respondent: DTE Energy Company
Violation: Respondent NEXUS Gas Transmission LLC, a joint venture between Respondents DTE Energy Company and Enbridge Inc., entered into a transaction to acquire Generation Pipeline LLC, in violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45, and which, if the acquisition is consummated, may substantially lessen competition in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 5 of the FTC Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint pursuant to Section 5(b) of the FTC Act, 15 U.S.C. § 45(b), and Section 11(b) of the Clayton Act, 15 U.S.C. § 21(b)… Read More

Penalties: N/A
Respondent: US Foods and SGA
Violation: The complaint alleges that, in Eastern Idaho, Western North Dakota, Eastern North Dakota, and the Seattle area, the transaction would eliminate a key broadline distributor and limit customers’ ability to switch between distributors to obtain better pricing and service. Under the proposed consent agreement, within 30 days of the acquisition closing, US Foods must divest three FSA distribution centers: one in Boise, Idaho; another in Fargo, North Dakota (FSA competes in both Eastern and Western North Dakota out of this facility); and a third in the greater Seattle area… Read More

NYSE

1 Enforcement Document

$250,000.00 in Fines

Penalties: $250,000.00
Respondent: Jump Trading, LLC
Violation: Firm generally failed to sufficiently document how it determined its market access controls. And while the Firm did have a process by which capital usage limits were set, it was unable to provide specific documentation demonstrating how it set those capital limits at the Firm or group level. Thus, for the aforementioned reasons, the Firm violated Exchange Act Rules 15c3-5(b) and 15c3- 5(c)(1), and NYSE Chicago Article 6, Rule 5… Read More

SEC

39 Enforcement Documents

$48,861,633.80 in Fines

Penalties: N/A
Respondent: Northridge Holdings, Ltd., Southridge Holdings, Ltd., Eastridge Holdings Ltd., Brookstone Investment Group, Ltd., Guardian Investment Group, Ltd., Unity Investment Group, Ltd., Amberwood Holdings L.P., and Glenn C. Mueller
Violation: Accordingly, the SEC seeks a judgment from the Court: (a) finding that Defendants committed the violations alleged herein; (b) permanently enjoining Defendants from violating or aiding and abetting future violations of these provisions of the federal securities laws; (c) requiring Defendants to disgorge, jointly and severally, with prejudgment interest, their ill-gotten gains; and (d) requiring Defendants to pay civil money penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]… Read More

Penalties: $250,000.00
Respondent: Garrison Investment Group LP and Garrison Capital Advisers LLC.
Violation: As a result of the conduct described above, Respondents willfully violated Section 57(a) of the Investment Company Act and Rule 17d-1 thereunder. Section 57(a) of the Investment Company Act prohibits any person related to a business development company from knowingly effecting any transaction where it is a joint participant with such person. See Section 57(i) of the Investment Company Act (providing that Rule 17d-1 applies to Section 57(a) of the Investment Company Act.)… Read More

Penalties: $1,326,696.00
Respondent: Strategic Capital Management, LLC and Michael J. Breton
Violation: Breton and Strategic Capital, enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. On March 13, 2017, Breton was barred by the Commission from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization… Read More

Penalties: N/A
Respondent: Timothy W. Crawford, et al.
Violation: Cardinal has consented to the entry of a judgment permanently enjoining it from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Sections 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and the reporting provisions of Sections 13(a) and 14(c) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 14c-6 thereunder… Read More

Penalties: N/A
Respondent: Dean Patrick McDermott, McDermott Investment Advisors, LLC and McDermott Investment Services, LLC
Violation: “Defendants violated their fiduciary duty to seek best execution of these transactions on behalf of their clients. Defendants also violated their fiduciary duty by failing to disclose to their clients the conflict of interest inherent in these transactions: namely, that a version of the securities without the transactional sales charges was available, and that the majority of the unnecessary transactional costs incurred by Defendants’ clients was paid to Relief Defendant MIS, McDermott’s 100%-owned and controlled broker-dealer. McDermott, MIA, and MIS were double dipping by receiving both the advisory fees and the fees generated by the more expensive
securities… Read More

Penalties: $100,000.00
Respondent: Ed Capital Management, LLC d/b/a Daniloff Capital Management, LLC and Elliot Daniloff a/k/a Ilya Olegovich Danilov
Violation: ED Capital also failed to adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder, and failed to conduct the requisite annual reviews of its written policies and procedures to ensure that its written policies and procedures were adequate and effective, a violation of Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder… Read More

Penalties: N/A
Respondent: Empire Energy Corporation International, Moller International, Inc., and Rangeford Resources, Inc.,
Violation: EEGC 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, 2010… Read More

Penalties: N/A
Respondent: Robert D. Hesselgesser, CPA
Violation: Hesselgesser engaged in improper professional conduct while serving as the engagement partner on PricewaterhouseCoopers LLP’s audit of Ener1, Inc.’s (“Ener1”) 2010 financial statements. Hesselgesser violated Public Company Accounting Oversight Board Standards relating to Due Professional Care and Skepticism, Competent Evidential Matter, Management Representations, Documentation, and Planning and Supervision by not performing sufficient procedures to support his audit conclusions that Ener1 management had appropriately accounted for certain assets and revenue… Read More

Penalties: $1,164,747.40
Respondent: Dennis Gibb and Sweetwater Investments, Inc.
Violation: In the Order, the Commission found that, from July 2007 to September 2018, Gibb stole more than $3 million from Sweetwater Income Flood LP (“Income Flood”), a private fund managed by Sweetwater. The Commission found that, among other misrepresentations, Gibb inflated account values and Income Flood holdings in account statements and tax documents sent to investors, and in Forms ADV filed with the Commission. The Commission determined that, by this conduct, Gibb and Sweetwater (the “Respondents”) willfully violated, among other things, the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940… Read More

Penalties: N/A
Respondent: Carol and Pedersen
Violation: Pedersen made materially false statements to advisory clients and investors, orchestrated a Ponzi scheme, misappropriated investor funds for her personal use, made misrepresentations to advisory clients and investors concerning how their money would be used and the risks associated with their investments, prepared and sent fake account statements indicating that investor funds were fully invested and earning returns, and otherwise engaged in a variety of conduct that operated as a fraud and deceit on advisory clients and investors… Read More

Penalties: N/A
Respondent: American Retirement Villas Properties and MCY.com, Inc.,
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter. As a result of the foregoing, the Respondent failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Universal Detection Technology and VinCompass Corp.,
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. As a result of the foregoing, Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: TN-K Energy Group Inc. and Total Sports Media, Inc.,
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. As a result of the foregoing, Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Green Endeavors, Inc. and Sputnik Enterprises, Inc.,
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. As a result of the foregoing, Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Dynamic Enviro Inc., and United Restaurant Group International, Inc.,
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. As a result of the foregoing, Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Aurum, Inc. and Ecosphere Technologies, Inc.
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. As a result of the foregoing, Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Innocom Technology Holdings, Inc., The Pulse Beverage Corporation, and Ystrategies Corp.,
Violation: Respondents are delinquent in their periodic filings with the Commission, have repeatedly failed to meet their obligations to file timely periodic reports, and failed to heed delinquency letters sent to them by the Division of Corporation Finance requesting compliance with their periodic filing obligations or, through their failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letters. As a result of the foregoing, Respondents failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder… Read More

Penalties: N/A
Respondent: Adam Mattessich and Joseph (a/k/a Jay) Ludovico
Violation: SEC’s complaint failed to allege Cantor Fitzgerald’s violation or aiding and abetting violations by Mattessich or Ludovico. Instead, in a matter of first impression, the court found the SEC alleged, for the purpose of stating a claim, a primary violation of Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-3(a)(19)(i) thereunder by Cantor Fitzgerald because, as alleged, the firm’s books and records did not reflect all transaction-level commissions “attributable” to each broker as a result of Mattessich’s and Ludovico’s off-book payment scheme… Read More

Penalties: $44,805,443.00
Respondent: Bio Defense Corporation, et al.
Violation: The complaint also alleged that Michael Lu, Jonathan Morrone, and Z. Paul Jurberg told investors that Bio Defense was not paying its officers and employees. In reality, as alleged, the company’s largest expense during those six years was the millions of dollars it paid to Lu, Morrone, Jurberg, and other employees. Some of the compensation paid to Lu went to a company he controlled called May’s International Corp. The complaint further alleged that, in 2008, Bio Defense, Lu, Morrone and Jurberg hired Brett Hamburger, who had been convicted of securities fraud, and Anthony Orth, a self-described “marketer,” to access “boiler room” firms to sell Bio Defense securities overseas in exchange for as much as 75% of investor proceeds… Read More

Penalties: $50,000.00
Respondent: Sridhar Thiruvengadam
Violation: The scheme required that Cognizant’s books and records be falsified in order to conceal the nature of the payment. Thiruvengadam further contributed to the concealment by signing false subcertifications to the company’s management representation letters. Thiruvengadam thereby caused Cognizant’s violations of Exchange Act Sections 13(b)(2)(A) and 13(b)(2)(B), and violated Exchange Act Section 13(b)(5) and Rules 13b2-1 and 13b2-2 thereunder… Read More

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