Financial Enforcement Actions | Week of September 14 to September 20

Financial-Enforcement-Actions-Week-of-September-14-to-September-20

Financial-Enforcement-Actions-Week-of-September-14-to-September-20

FTC

1 Enforcement Document

$0.00 in Fines

Penalties: N/A
Respondent: Truly Organic Inc and MAXX HARLEY APPELMAN, a/k/a Maxx Harley, individually and as an officer of TRULY
ORGANIC INC.
Violation: Defendants are violating or are about to violate laws enforced by the Commission because, among other things: Defendants engaged in their unlawful acts and practices repeatedly over a period of nearly ten years; Defendants engaged in their unlawful acts and practices willfully and knowingly; Defendants’ unlawful acts and practices were the subject of prior enforcement action by the USDA, yet Defendants continued to engage in such practices; to the extent Defendants ceased their unlawful activities, they only did so after learning of the FTC’s investigation; and Defendants remain in the organic personal care product business and maintain the means, ability, and incentive to resume their unlawful conduct... Read More

SEC

55 Enforcement Documents

$57,488,792.00 in Fines

Penalties: $200,000.00
Respondent: Vandham Securities Corp.
Violation: Vandham also violated Rule 15c2-11 under the Exchange Act while facilitating the liquidation of low priced stocks for its broker-dealer customers. In some cases, rather than placing short sales, Vandham first purchased the shares being sold by its broker-dealer customers for its own account, creating a long position, and then sold those shares into the public trading market... Read More

Penalties: $2,700,000.00
Respondent: Stifel, Nicolaus & Company, Incorporated,
Violation: Stifel failed to furnish complete records to the Commission staff that were requested by the Commission in its EBS requests. Therefore, Stifel willfully violated the recordkeeping and reporting requirements of Section 17(a)(1) of the Exchange Act and Rule 17a-4(j) thereunder by failing to furnish promptly true and complete trading information as requested by Commission staff over a period of approximately four years. Stifel willfully violated Exchange Act Rule 17a-25 by failing to submit electronically certain securities transaction information to the Commission through the EBS system in response to requests made by the Commission... Read More

Penalties: $1,950,000.00
Respondent: BMO Capital Markets Corp.
Violation: BMO CMC failed to furnish complete and accurate records to the Commission staff that were requested by the Commission in its blue sheet requests. Therefore, BMO CMC willfully violated the recordkeeping and reporting requirements of Section 17(a)(1) of the Exchange Act and Rule 17a-4(j) thereunder by failing to furnish promptly true and complete trading information as requested by Commission staff over a period of more than four years. In addition, BMO CMC willfully violated Exchange Act Rule 17a-25 by failing to submit electronically certain securities transaction information to the Commission through the EBS system in response to requests made by the Commission... Read More

Penalties: $32,632,560.00
Respondent: AST Investment Services, Inc. and PGIM Investments LLC
Violation: Respondents willfully violated Section 206(4) of the Advisers Act and Rule 206(4)-7 promulgated thereunder, which require, among other things, that a registered investment adviser adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and the rule promulgated thereunder by the adviser and its supervised persons... Read More

Penalties: $5,500,000.00
Respondent: Marvell Technology Group, Ltd.
Violation: Marvell used pull-ins to mask declining sales and markets, a trend, event, or uncertainty that was known to Marvell and was reasonably likely to have material effects on the registrant’s financial condition or results of operations. Contrary to the requirements of Regulation S-K, Marvell failed to disclose the material impact of this known trend, event, or uncertainty on current and future revenues within its required MD&A sections of its Form 10-K for the fiscal year 2015 and its Form 10-Q for the first quarter of fiscal year 2016. As a consequence, Marvell violated Section 13(a) of the Exchange Act and Rules 13a-1, 13a-13, and 12b-20 thereunder... Read More

Penalties: N/A
Respondent: Cirque Energy, Inc. and Millennium Healthcare 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: John Henderson and Global Resources Leadership LLC
Violation: John Henderson and Global Resources Leadership, LLC (GRL), engaged in an offering fraud, in which they solicited investments in a purported joint venture focused on buying and selling Nigerian crude oil through a false and misleading email solicitation. Among other alleged misstatements, defendants' email falsely claimed that GRL had obtained $200 billion in gold bullion from a purported Native American tribe that also had its own commercial bank, and that GRL's assets would be "monetized and matched" by the governments of Ghana, Rwanda, Uganda, and Ethiopia... Read More

Penalties: $812,787.00
Respondent: Jay Daniel Seinfeld, Sara Beth Postma, Traditions Capital Management LLC, and Hospice Patient Aid Program, Inc.
Violation: Seinfeld and Postma induced over a dozen such patients to provide their personal information and sign transaction documents as purchasers of corporate bonds that would pay out upon their deaths while simultaneously relinquishing most of the bonds' anticipated proceeds... Read More

Penalties: $3,000,000.00
Respondent: Raymond James & Associates, Inc., Raymond James Financial Services, Inc. and Raymond James Financial Services Advisors, Inc.
Violation: RJ Advisers willfully violated Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require a registered investment adviser to, among other things, “[a]dopt and implement written policies and procedures reasonably designed to prevent violation” of the Advisers Act and its rules. Negligence is sufficient to establish a violation of Section 206(4) and Rule 206(4)-7. Steadman, 967 F.2d at 647... Read More

Penalties: $15,000.00
Respondent: Michael A. Dejager
Violation: DeJager caused TCCG’s violations of Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. Section 206(4) makes it unlawful for investment advisers to engage in any act, practice or course of business which is fraudulent, deceptive, or manipulative. Rule 206(4)-8 states that it shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of Section 206(4) for any investment adviser to... Read More

Penalties: N/A
Respondent: Britt J. Haugland
Violation: Haugland was a cause of the Cobalt principals’ violations of Section 17(a)(3) of the Securities Act, which makes it unlawful for any person in the offer or sale of securities to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser... Read More

Penalties: N/A
Respondent: Tom Simeo
Violation: Simeo’s materially false statements, omissions, and deceptive acts violated Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77q(a)(1) and (3)], and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rule 10b-5 thereunder [15 U.S.C. §§ 78(b) and 17 CFR §240.10b-5], and unless enjoined, Simeo will continue to violate these securities laws... Read More

Penalties: N/A
Respondent: Jan Atlas
Violation: Global and Ruderman, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.By reason of the foregoing, Atlas aided and abetted 1 Global and Ruderman’s violations of, and unless enjoined is reasonably likely to continue to violate, Section 10(b) of the Exchange Act, 15 U.SC. § 78j(b), and Exchange Act Rule 10b-5(b), 17 C.F.R. § 240.10b-5(b)... Read More

Penalties: $225,000.00
Respondent: Morgan Stanley Smith Barney, LLC
Violation: MSRB Rule G-27, a broker dealer must have written supervisory procedures in place that are reasonably designed to ensure compliance with the Rule G-19 obligation to undertake a suitability analysis in connection with every recommended transaction, and broker dealers must enforce these procedures to ensure that such a meaningful analysis does in fact occur in connection with the recommended transactions. As a result of the conduct described above, MSSB willfully2 violated Section 15B(c)(1) of the Exchange Act and MSRB Rules G-8, G-17, G-19, and G-27... Read More

Penalties: $812,787.00
Respondent: Jay Daniel Seinfeld, Sara Beth Postma, Traditions Capital Management LLC, and Hospice Patient Aid Program, Inc.
Violation: Seinfeld and Postma induced over a dozen such patients to provide their personal information and sign transaction documents as purchasers of corporate bonds that would pay out upon their deaths while simultaneously relinquishing most of the bonds' anticipated proceeds. Using documents supplied by Seinfeld, Postma allegedly led the patients to believe that the Hospice Patient Aid Program would use bond proceeds to assist hospice patients in need of financial assistance; instead, when patient-purchasers died, Seinfeld allegedly redeemed the bonds and split a large majority of the profits - hundreds of thousands of dollars in the aggregate - with other wealthy investors... Read More

Penalties: N/A
Respondent: Fact Corporation and Tandy Brands Accessories 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: Lans Holdings, Inc. and Momentous Entertainment Group, Inc.,
Violation: LAHO 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 August 31, 2017... Read More

Penalties: N/A
Respondent: Mediatrix Capital Inc., et al.
Violation: Mediatrix Capital Inc. and its three principals, Michael S. Young, Michael S. Stewart, and Bryant E. Sewall, induced investors to invest by falsely representing that their money would be invested using a highly profitable algorithmic trading strategy that had never experienced an unprofitable month and had returned more than 1,600 percent since inception... Read More

Penalties: $10,000.00
Respondent: Ruben James Rojas
Violation: The SEC alleges that Ruben Rojas, Montebello's former Chief Business Officer, helped prepare the misleading offering documents and also concealed the audit firm's concerns by providing deceptive updates about the status of its pending audit to various gatekeepers, including the disclosure lawyers who worked on the bond offering. The SEC's order found that Anthony Martinez, Montebello's Superintendent of Schools, signed the final bond offering document and made false certifications in connection with the bonds... Read More

Penalties: N/A
Respondent: ICOBox and Nikolay Evdokimov
Violation: The complaint alleges that defendants claimed the tokens would increase in value upon trading and that ICOS token holders would be able to swap them at a discount for other tokens promoted on the ICOBox platform. According to the complaint, the ICOS tokens are virtually worthless. The complaint further alleges that ICOBox failed to register as a broker but acted as one by facilitating initial coin offerings that raised more than $650 million for dozens of clients... Read More

Penalties: $10,000.00
Respondent: Montebello Unified School District And Anthony James Martinez
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate that ceaseand-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”) and Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), against Montebello Unified School District (“Montebello” or the “District”) and Anthony James Martinez (“Martinez”) (together, “Respondents”)... Read More

Penalties: $1,268,000.00
Respondent: Brian Robert Sodi, et al.
Violation: LDS agreed to injunctions barring them from violating Sections 17(a) and 17(b) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. Sodi also agreed to an injunction barring him from violating Section 5 of the Securities Act and Section 13(d) of the Exchange Act and Rule 13d-1 thereunder. All three defendants agreed to be barred from participating in any penny stock offering and to be prohibited from directly or indirectly promoting the purchase of any U.S. publicly traded or quoted stock without making certain disclosures regarding sales of, plans to sell, or compensation received in, such stock... Read More

Penalties: N/A
Respondent: David R. Gibson
Violation: Respondent knowingly or, in the alternative, negligently made, and/or substantially participated in making, material false or misleading disclosures concerning Wilmington’s loans 90 days or more past due. More specifically, the complaint alleges that Respondent and others at Wilmington knowingly or, in the alternative, negligently engaged in conduct that misled investors concerning the extent of past due, matured and extended loans in Wilmington’s commercial loan portfolio... Read More

Penalties: $5,260,730.00
Respondent: Earl D. Miller, et al.
Violation: The SEC alleged that, while Miller promised he would not be paid for managing the funds, he took over $1.1 million of investor money to pay himself and to buy out his former business partner. The SEC further alleged that Miller lied to investors about the nature of their investments and purported safeguards, which he never implemented. When Miller's investments failed, his funds collapsed and 72 investors lost over $4.1 million. On August 10, 2017, the Court entered a default judgment against Miller for his repeated failures to comply with discovery orders... Read More

Penalties: $50,000.000
Respondent: Marcos Tamayo And Bored At Work Retirement Services, LLC
Violation: Tamayo willfully violated Sections 206(1) and 206(2) of the Advisers Act, which prohibit fraudulent conduct by an investment adviser, and Section 206(4) and Rule 206(4)-1(a)(5) thereunder, which prohibit an investment adviser from using any advertisement which contains any untrue statement of a material fact, or which is otherwise false or misleading... Read More

Penalties: N/A
Respondent: Darcy L. Rose
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Darcy L. Rose (“Rose” or “Respondent”)... Read More

Penalties: N/A
Respondent: Anton & Chia, LLP, Gregory A. Wahl, CPA, Michael Deutchman, CPA, Georgia Chung, CPA, and Tommy Shek, CPA,
Violation: During the third quarter interim review, however, A&C failed to consider whether a restatement of CannaVEST’s first and second quarter balance sheets was necessary. In April 2014, CannaVEST restated all three quarters to reflect $8 million in assets related to the PhytoSphere acquisition on CannaVEST’s balance sheet. During CannaVEST’s interim reviews, A&C engaged in improper professional conduct by failing to adhere to PCAOB standards and ignoring a number of red flags that indicated that CannaVEST’s financial information contained material misstatements... Read More

Penalties: N/A
Respondent: Zvi Feiner, et al
Violation: FNR Healthcare violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also names Baver's company, Cedarbrook Management, Inc. (Cedarbrook), and Feiner's company, Netzach Investments LLC, as relief defendants for the purposes of recovering investor funds that they received from the fraud... Read More

Penalties: N/A
Respondent: Ronald P. Haller
Violation: He was criminally convicted by a foreign court of competent jurisdiction. On November 27, 2017, Haller was given a conditional sentence of 6 months at home, 12 months probation, and a 10-year ban from performing any work or service that involves having authority over real property, money or a valuable security of another person... Read More

Penalties: $50,000.00
Respondent: Donald F. McGraw, Jr.
Violation: McGraw failed to provide the committee with information sufficient for it to make appropriate determinations. Consequently, McGraw knew or should have known that the determinations made by the committee at times were likely to be inaccurate. As a result of the conduct described above, McGraw caused Bancorp’s violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and violated Rule 13b2-1 thereunder... Read More

Penalties: $50,000.00
Respondent: James David Hilty
Violation: Hilty knew or should have known that risk ratings for certain loans had not been reevaluated, downgraded, or impaired in spite of indicators of financial distress. Accordingly, Hilty knew or should have known that, on multiple occasions, Bancorp’s risk ratings and impairment decisions were not fair and accurate. As a result of the conduct described in this Order, Hilty caused Bancorp’s violations of Sections 13(a) and 13(b)(2)(A) and Rules 13a-1 and 13a-13 of the Exchange Act. Hilty also violated Exchange Act Rule 13b2-1... Read More

Penalties: $1,400,000.00
Respondent: The Bancorp, Inc.
Violation: Bancorp restated its financial results and financial statements for certain prior years. Pursuant to the restatement, the aggregate adjustment to the PLLL for its fiscal years 2010 through 2013 was approximately $138.6 million. Pursuant to the adjustments to the historical ALLL set forth in the restatement, Bancorp’s ALLL for 2012 increased by 78.23% from the balance previously reported, and the ALLL for 2013 increased by 73.97%. As a result of the conduct described in this Order, Bancorp violated Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 13a-1 and 13a-13 of the Exchange Act... Read More

Penalties: $1,526,928.00
Respondent: Sonya D. Camarco
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Sonya D. Camarco (“Respondent”)... Read More

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