Financial Enforcement Actions | Week of Sep 19 to Sep 25

Enforcement Report Sep 19 - 25 feat image

Enforcement Report Sep 19 - 25

CFPB

3 Enforcement Documents

$100,000.00 in Fines

Penalties: $100,000.00
Respondent: Lobel Financial Corporation
Violation: The Bureau found that Lobel engaged in unfair practices with respect to its Loss Damage Waiver (LDW) product, in violation of the Consumer Financial Protection Act (CFPA)... Read More

FINRA

15 Enforcement Documents

$103,674.51 in Fines

Penalties: N/A
Respondent: Steven E. Larson
Violation: fraudulently misrepresented and omitted material facts, failed to comply fully and promptly with FINRA requests for information, backdated and provided falsified records to FINRA, and filed a misleading FINRA continuing membership application... Read More

Penalties: N/A
Respondent: Julian Jay Piekarczyk
Violation: Respondent failed to observe high standards of commercial honor and just and equitable principles of trade, in violation of FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Neil James Buono
Violation: In August 2020, Buono 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 into whether he forged customer signatures on variable annuity applications and submitted them to the firm for processing without his customers' knowledge or consent... Read More

Penalties: $5,000.00
Respondent: Nina Maines
Violation: In December 2018, Maines exercised discretion without written authorization in 24 customer accounts, in violation of NASD Rule 2510(b) and FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Shawna J. Loveland
Violation: While associated with Supreme Alliance LLC, Loveland caused Supreme Alliance to violate Regulation S-P by providing documents containing Supreme Alliance customers' nonpublic personal information to nonaffiliated third party business centers, in violation of FINRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Jay Howard Bluestine
Violation: In September 2018, while associated with Raymond James, Bluestine accepted an additional $100,001 loan from the same customer who was also Bluestine's Raymond James customer at the time. Bluestine did not seek or obtain the approval of UBS or Raymond James to borrow money from the customer, in violation of each firm's procedures. As a result, Bluestine violated FINRA Rules 3240 and 2010... Read More

Penalties: $5,000.00
Respondent: Joshua K. Staudinger
Violation: Between June and August 2018, Staudinger deposited six checks, totaling $3,250, issued from his closed financial accounts into two of his personal bank accounts. Staudinger knew or should have known that the accounts did not have funds to cover the checks and withdrew funds from his personal bank accounts before the checks were returned for insufficient funds. By virtue of this conduct, Staudinger violated FINRA Rule 2010... Read More

Penalties: $8,000.00
Respondent: Harry Rosenberg
Violation: By June 2, 2015, Respondent knew that he was named as a defendant in an investmentrelated civil litigation. However, Respondent failed to amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose that litigation until FINRA made inquiries about the litigation in April 2019, in violation of Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010... Read More

Penalties: N/A
Respondent: Christ Elias Baltas
Violation: Baltas refused to appear for on-the-record testimony that was requested pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010... Read More

Penalties: $5,000.00
Respondent: Deborah Leah Beal
Violation: In May 2019, Respondent effected 118 unauthorized transactions, totaling $704,379.80, in 112 customers' firm accounts. As a result, Respondent violated Rule 2010... Read More

Penalties: $5,000.00
Respondent: John Dewey Church
Violation: Church failed to notify Waddell & Reed of and amend his Form U4 to reflect certain material information he was required to report. Additionally, he provided a false response about this and other information on a compliance certification he submitted to the firm. As a result, Church violated Article V, Section 2(c) of FINRA's By-Laws and FINRA Rules 1122 and 2010... Read More

Penalties: N/A
Respondent: Alec C. Franks
Violation: In September 2020, during an investigation, Franks informed FINRA staff that he would not provide information and documents requested by the staff pursuant to FINRA Rule  8210. By refusing to provide information and documents requested pursuant to Rule 8210, Franks violated FINRA Rule 8210 and 2010... Read More

Penalties: $10,000.00
Respondent: Xerxes Soli Mullan
Violation: Between April 2017 and January 2019, Respondent participated in private securities transactions involving approximately $6 million in total sales, without the firm’s knowledge or approval, in violation of FINRA Rules 3280 and 2010... Read More

Penalties: $53,174.51
Respondent: Capital City Securities, LLC
Violation: Capital City failed to conduct a reasonable due diligence review of a private placement by registered representative JM, in violation of FINRA Rules 3110 and 2010... Read More

Penalties: $7,500.00
Respondent: Robert Steven Meyer
Violation: Between January 2019 and August 2019 (the “Relevant Period”), Meyer excessively and unsuitably traded two customers’ accounts, in violation of FINRA Rules 2111 and 2010... Read More

CFTC

7 Enforcement Documents

$730,000.00 in Fines

Penalties: $120,000.00
Respondent: Marex Spectron International Ltd.
Violation: Marex Spectron failed to meet its adjusted net capital requirements during thirty-six months of the Relevant Period by failing to properly deduct the amount of the guaranteed draw-down under the revolving line of credit (hereinafter “draw-down”) in calculating its adjusted net capital... Read More

Penalties: $120,000.00
Respondent: OTC Europe LLP
Violation: OTC Europe failed to meet its adjusted net capital requirements during each year of the Relevant Period by failing to properly deduct the amount of the guaranteed draw-down under the revolving line of credit (hereinafter “draw-down”) in calculating its adjusted net capital... Read More

Penalties: N/A
Respondent: TMTE, INC, et al
Violation: Engaged and continue to engage in a fraudulent scheme to defraud at least 1,600 persons throughout the United States into purchasing gold and silver bullion (“Precious Metals Bullion”)... Read More

Penalties: $120,000.00
Respondent: EOX Holdings LLC
Violation: EOX failed to meet its adjusted net capital requirements during each year of the Relevant Period by failing to properly deduct the amount of the guaranteed draw-down under the revolving line of credit (hereinafter “draw-down”) in calculating its adjusted net capital... Read More

Penalties: $120,000.00
Respondent: Futures International LLC
Violation: Futures International failed to meet its adjusted net capital requirements during each year of the Relevant Period by failing to properly deduct the amount of the guaranteed drawdown under the revolving line of credit (hereinafter “drawdown”) in calculating its adjusted net capital. Futures International continued to operate as an IB while failing to maintain the minimum adjusted net capital required of an IB... Read More

Penalties: $250,000.00
Respondent: Marex North America LLC.
Violation: Marex failed to meet its adjusted net capital requirements during thirty-three months of the Relevant Period by failing to properly deduct the amount of the guaranteed drawdown under the revolving line of credit (hereinafter “drawdown”) in calculating its adjusted net capital. Marex continued to operate as a FCM while failing to maintain the minimum adjusted net capital required of a FCM... Read More

CME

7 Enforcement Documents

$1,000,000.00 in Fines

Penalties: $375,000.00
Respondent: Interactive Brokers LLC
Violation: IB failed to adequately take into consideration market conditions when it used this order routing functionality to automatically liquidate under-margined customer accounts which, on multiple occasions between August 2015 and January 2016 caused those same markets to experience extreme price movements, liquidity and trade volume aberrations, and Velocity Logic events... Read More

Penalties: $40,000.00
Respondent: R&B Commodities LLC.
Violation: R&B executed large market orders in the Live Cattle futures market on behalf of clients with reckless disregard for the orderly execution of transactions... Read More

Penalties: $85,000.00
Respondent: RSJ Securities, a.s.
Violation: RSJ entered orders during various pre-open sessions in the E-mini Nasdaq-100 Futures, E-mini Russell Index Futures, E-mini S&P 500 Futures, Euro FX Futures, Nikkei/Yen Futures, Australian Dollar Futures, British Pound Futures, Canadian Dollar Futures, Japanese Yen Futures, Swiss Franc Futures, New Zealand Dollar Futures, and Mexican Peso Futures with reckless disregard for the adverse impact on the orderly conduct of trading... Read More

Penalties: $500,000.00
Respondent: CARGILL, INCORPORATED
Violation: Cargill and the Grain Merchant discussed a marketing plan to register and deliver a significant amount of December 2017 Soft Red Winter Wheat (“SRW”) to benefit the Grain Merchant’s futures and options positions related to the grain subject to the joint marketing agreement... Read More

FTC

1 Enforcement Document

$1,040,000.00 in Fines

Penalties: $1,040,000.00
Respondent: NutraClick, LLC, et al.
Violation: Lured consumers with “free” samples of supplements and beauty products and then violated the law by charging them a recurring monthly fee without their consent... Read More

SEC

54 Enforcement Documents

$27,754,377.00 in Fines

Penalties: $30,000.00
Respondent: Funding the Gap, LLC and Irene P. Carroll
Violation: Starting as early as July 2014 and continuing through September 2019, FTG and Carroll provided municipal advice to twelve charter schools in connection with the issuance of municipal bonds. FTG and Carroll provided advice with respect to twelve municipal bond offerings sold via conduit issuers that cumulatively raised $222 million... Read More

Penalties: $3,061,032.00
Respondent: Leonardo Cornide and Jorge Falcon
Violation: Respondents’ failure to disclose conflicts of interest while acting as investment advisers to Premier Assurance Group, SPC Ltd. (“PSPC”), a Cayman Islands-registered insurance company... Read More

Penalties: $162,609.10
Respondent: Morgan Wilshire Securities, Inc.
Violation: Morgan Wilshire failed to implement its policies and procedures in order to reasonably supervise its registered representatives in connection with their recommendations to buy inverse ETFs, with a view to preventing and detecting the registered representatives’ violations of Section 17(a)(3) of the Securities Act of 1933 (“Securities Act”)... Read More

Penalties: $35,000.00
Respondent: Steven Rosen
Violation: Rosen willfully aided and abetted and caused TCA’s and GP’s violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act. Section 17(a)(2) makes it unlawful, in the offer or sale of securities, to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading... Read More

Penalties: $70,000.00
Respondent: Finser International Corporation and Andrew H. Jacobus
Violation: During the Relevant Period, contrary to representations made in the Fund’s private placement memorandum (“PPM”), Finser and Jacobus charged the Fund approximately $51,000 in performance fees. Finser and Jacobus also failed to take the necessary steps to comply with Section 206(4) of the Advisers Act and Rule 206(4)-2 thereunder (the “Custody Rule”) by commingling Fund assets with non-Fund assets and not implementing certain procedures to adequately safeguard and account for Fund assets... Read More

Penalties: $1,330,847.00
Respondent: Platinum Wealth Partners, Inc. and David L. Potter
Violation: PWP and Potter willfully violated Sections 17(a)(2) and 17(a)(3) of the Securities Act, which prohibit any person in the offer or sale of securities from obtaining money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make statements made not misleading, and from engaging in any transaction, practice or course of business which operates or would operate as a fraud or deceit upon the purchaser... Read More

Penalties: $890,240.00
Respondent: Creative Financial Designs, Inc.
Violation: Respondent willfully violated Section 206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client.” Scienter is not required to establish a violation of Section 206(2), but rather a violation may rest on a finding of negligence. SEC v. Steadman, 967 F.2d 636, 643 n.5 (D.C. Cir. 1992) (citing SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180,194-95 (1963))... Read More

Penalties: $80,000.00
Respondent: Sabra Capital Partners, LLC and Zvi Rhine
Violation: As a result of the conduct described above, Respondents willfully violated Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder, which prohibit fraudulent conduct by an investment adviser to an investor or prospective investor in a pooled investment vehicle... Read More

Penalties: $35,000.00
Respondent: Michael Vernon
Violation: Vernon willfully aided and abetted and caused TCA’s and GP’s violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act. Section 17(a)(2) makes it unlawful, in the offer or sale of securities, to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading... Read More

Penalties: $18,000,000.00
Respondent: Bayerische Motoren Werke Aktiengesellschaft, BMW of North America, LLC and BMW US Capital, LLC
Violation: BMW, therefore, provided materially incomplete and inaccurate information regarding its U.S. retail sales performance and customer demand for BMW vehicles in the U.S. market. 4. As a result of such conduct, BMW violated Section 17(a)(2) and 17(a)(3) of the Securities Act... Read More

Penalties: $21,854.00
Respondent: Rachelle A. Thatcher
Violation: As a result of the conduct described above, Respondent violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in connection with the purchase or sale of securities... Read More

Penalties: $2,500,000.00
Respondent: Precigen, Inc. (f/k/a Intrexon Corporation)
Violation: On May 10, 2017, Intrexon publicly reported progress in the laboratory converting natural gas into a precursor component of synthetic rubber called “2,3 BDO.” Intrexon continued to publicly report the company’s progress converting natural gas into 2,3 BDO in August and November 2017, which was important information for investors and analysts at that time... Read More

Penalties: $2,337,792.00
Respondent: Hancock Whitney Investment Services, Inc.
Violation: Respondent willfully violated Section 206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client.” Scienter is not required to establish a violation of Section 206(2), but rather a violation may rest on a finding of negligence. SEC v. Steadman, 967 F.2d 636, 643 n.5 (D.C. Cir. 1992) (citing SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180,194-95 (1963))... Read More

Penalties: $1,700,000.00
Respondent: Power Solutions International, Inc.
Violation: As a result of the conduct described above, Respondent violated Exchange Act Section 13(b)(2)(B) which requires issuers of securities registered pursuant to Section 12 of the Exchange Act to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are recorded as necessary to, among other things, permit preparation of financial statements in accordance with GAAP... Read More

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