Financial Enforcement Actions | Week of September 30 to October 05

FTC

1 Enforcement Document

$89,736.00 in Fines

Penalties: $89,736.00
Respondent: DOTAuthority.com
Violation: DOTAuthority sent thousands of small businesses misleading messages that implied defendants either were, or were affiliated with, the U.S. Department of Transportation or another government agency and tricked the businesses into using their commercial vehicle registration services… Read More

CFPB

1 Enforcement Document

$200,000.00 in Fines

Penalties: $200,000.00
Respondent: Bluestem Enterprises, Inc. and Bluestem Sales, Inc.
Violation: Between 2013 and 2016, Bluestem delayed forwarding payments for more than 31 days in 18,000 instances; in 3,500 of those instances, Bluestem delayed forwarding payments for more than a year. These delays likely subjected customers to misleading collection activity, including collection activity on accounts that they had completely paid off… Read More

FINRA

11 Enforcement Documents

$9,801,925.83 in Fines

Penalties: $9,699,987.94
Respondent: NAC Decisions
Violation: Willfully made fraudulent misrepresentations and omissions concerning commissions and customer’s eligibility for volume discounts… Read More

Penalties: $7,000.00
Respondent: Tol Ho
Violation: While associated with Cantor, Ho traded pools of reverse mortgages called Home Equity Conversion Mortgage (“HECM”) bonds. On thirteen instances between June 1, 2015 and August 14, 2015, Ho failed to record his HECM bond purchases in Cantor’s order management system. By not documenting the HECM transactions, Ho caused Cantor’s books and records to be inaccurate and, thus, violated FINRA Rules 4511 and 2010… Read More

Penalties: $15,000.00
Respondent: CIM Securities, LLC
Violation: Between July and October 2016 (-Relevant Period”), Respondent failed to comply with its obligations to review, approve, document, and supervise approximately $2.5 million in private securities transactions by three of its registered representatives as required by FINRA Rule 3280(c) and its own written supervisory procedures. As a result, Respondent violated FINRA Rules 3280(c). 311 0(b) and 2010… Read More

Penalties: $7,437.89
Respondent: Matthew David Rubin
Violation: Registered representative unethically financed his securities trading and violated the federal securities laws and FINRA rules concerning the extension of credit and margin requirements… Read More

Penalties: $7,500.00
Respondent: Daniel K. Kittner (“Kittner” or “Respondent”)
Violation: From June 2015 to September 2017 (the “Relevant Period”), Kittner exercised his discretion in the accounts of two customers without written authorization from the customers and without acceptance of the accounts as discretionary by his FINRA member firm, thereby violating NASD Rule 2510(b) and FINRA Rule 2010. Kittner also violated FINRA Rules 4511 and 2010 by failing to mark the order tickets for these trades to reflect that they were discretionary, thereby causing his firm’s books and records to be inaccurate, in violation of Section 17(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 17a-3 thereunder… Read More

Penalties: N/A
Respondent: Jon Pariser
Violation: Pariser refused to provide documents and information requested pursuant to FINRA Rule 8210. By refusing to provide documents and information, Pariser violates FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Stanley Clayton Niekras
Violation: Failed to prove that the respondent made misrepresentations of material fact in violation of FINRA Rule 2010… Read More

Penalties: $7,500.00
Respondent: John Gilbert
Violation: During the period July 10, 2012 to October 2016 (the “Relevant Period”), Gilbert made unsuitable recommendations to his customer PM, in violation of FINRA Rules 2111 and 2010… Read More

Penalties: TBD
Respondent: Tyler J. Woodward
Violation: From June 2018 to the present, Respondent Tyler J. Woodward has failed to provide information and documents requested by FINRA Staff pursuant to FINRA Rule 8210 in an investigation involving serious violations of FINRA rules, including conversion. Moreover, Woodward failed to appear and provide sworn testimony to FINRA Staff on two occasions in August 2018, as requested pursuant to FINRA Rule 8210. As a result, Woodward violated FINRA Rules 8210 and 2010… Read More

Penalties: $50,000.00
Respondent: UBS Financial Services, Inc.
Violation: In connection with STAR No. 20160509124, the TRACE Agency team of the Department of Market Regulation (the “Staff”) reviewed the Firm’s reporting of TRACE-Eligible Agency Debt Securities between April 1, 2016 abd September 30, 2016. In connection with STAR No. 20160519285, the Staff reviewed the Firm’s reporting of TRACE-Eligible Securitized Products between July 1, 2016 and September 30,2016. As a result of thesse reviews, the Staff found that PWJC violated FINRA Rules 6730(a) and 2010… Read More

Penalties: $7,500.00
Respondent: Wesley Justin Foltz
Violation: During the period from April 1, 2013 through February 29, 2016 (the “Relevant Period”), Foltz recommended certain L-share variable annuities to his customers without a reasonable basis for believing that the recommendations were suitable. As a result, Foltz violated FINRA Rules 2111, 2330(b)(1)(A) and 2010… Read More

SEC

22 Enforcement Documents

$103,528,522.16 in Fines

Penalties: $64,400,000.00
Respondent: Ifitikar Ahmed, et al.
Violation: Fraudulently diverting tens of millions of dollars from the venture capital funds he advised… Read More

Penalties: $37,546,544.16
Respondent: Patrick Lanier
Violation: Between 2006 and 2010, while Ballow remained a fugitive, Lanier traveled to Mexico to assist Ballow in perpetrating a securities fraud scheme… Read More

Penalties: N/A
Respondent: Taberna Capital Management, LLC, Michael Fralin and Raphael Licht
Violation: Between 2009 and 2012, in connection with restructuring transactions undertaken between the Taberna collateralized debt obligation clients (the “Taberna CDOs”) and the issuers of the underlying obligation in Taberna CDOs’ portfolios, Taberna retained certain fees (“Exchange Fees”) that should have been paid to the Taberna CDOs… Read More

Penalties: N/A
Respondent: Ampal-American Israel Corporation, Robertson Global Health Solutions Corporation and Sanguine Corporation
Violation: RHSC 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, 2012… Read More

Penalties: TBD
Respondent: Adam C. Derbyshire Complaint – Salix Pharmaceuticals, Ltd., Adam C. Derbyshire
Violation: Salix engaged in overselling of demand – a practice whereby a company floods distribution channels using incentives to induce customers into purchasing more of its products, Case 1:18-cv-08891 Document 1 Filed 09/28/18 Page 1 of 38 2 creating a short-term bump in revenue for the seller but excess supply in the distribution chain that limits the seller’s ability to sell product to customers in the future… Read More

Penalties: N/A
Respondent: Salix Pharmaceuticals, Ltd. Complaint; – Salix Pharmaceuticals, Ltd., Adam C. Derbyshire
Violation: From at least 2013 through 2014, to help meet revenue targets, Salix engaged in overselling demand—a practice whereby a company floods distribution channels using incentives to induce customers into purchasing more of its products, creating a bump in revenue for the seller but excess supply in the distribution chain that limits the company’s ability to sell product to customers in the future… Read More

Penalties: $1,053,370.00
Respondent: Salix Pharmaceuticals, Ltd., Adam C. Derbyshire
Violation: Salix and Derbyshire made false statements to analysts and investors during quarterly earnings calls by significantly understating the amount of Salix drugs that wholesaler customers held in inventory… Read More

Penalties: N/A
Respondent: Radiant Oil & Gas, Inc., Tungsten Corp. and Well Power, Inc.
Violation: WPWR 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 January 31, 2015… Read More

Penalties: N/A
Respondent: ARX Gold Corporation
Violation: ARX Gold has failed to comply with Exchange Act Section 13(a) and Rule 13a-1 thereunder because it has not filed any periodic reports with the Commission since the period ended October 31, 2013… Read More

Penalties: N/A
Respondent: Golden Global Corp. and Power Efficiency Corporation
Violation: PEFF 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, 2016… Read More

Penalties: N/A
Respondent: First Liberty Power Corp., et al.
Violation: MEC 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 December 31, 2015. As of August 29, 2018, the company’s stock (symbol “MYEC”) was quoted on OTC Link, had seven market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3)… Read More

Penalties: N/A
Respondent: AMI James Brands, Inc., et al.
Violation: Energy Quest 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 December 31, 2012. As of August 29, 2018, the company’s stock (symbol “EQST”) was quoted on OTC Link, had five market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3)… Read More

Penalties: TBD
Respondent: Roger Knox et al.
Violation: Roger Knox and his Swiss-based company, Wintercap SA, helped microcap securities holders evade federal securities laws that restrict sales by large shareholders… Read More

Penalties: TBD
Respondent: SEC Complaint – Roger Knox et al.
Violation: From at least June 2015 to the present, Roger Knox knowingly enabled public company control persons to fraudulently sell stock to investors… Read More

Penalties: TBD
Respondent: Russell Craig and OneStep Financial Services, LLC
Violation: Russell Craig and his company, OneStep Financial Services, LLC with violating the anti-fraud provisions of the federal securities laws by promising investors profits in return for depositing funds into escrow for the purchase or development of real estate properties, and then misappropriating investor funds… Read More

Penalties: TBD
Respondent: SEC Complaint – Russell Craig and OneStep Financial Services, LLC
Violation: From 2014 to 2017, Defendant Russell Craig and the company he controls, Defendant OneStep Financial Services, LLC, perpetrated multiple fraudulent real estate investment schemes, defrauding investors of over $1 million… Read More

Penalties: N/A
Respondent: Paul T. Rampoldi
Violation: On two separate occasions between March 2009 and April 2012, Rampoldi engaged in insider trading. In particular, on each of these occasions, Rampoldi purchased or caused to be purchased Ardea Biosciences, Inc. (“Ardea”) securities based on tips he received of material, nonpublic information regarding which he knew, recklessly disregarded, or should have known was in violation of a fiduciary duty, or obligation arising from a similar relationship of trust and confidence, to keep the information confidential… Read More

Penalties: N/A
Respondent: Petron Energy II, Inc., et al.
Violation: Precious Metals 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, 2015. As of August 28, 2018, the company’s stock (symbol “USPR”) was quoted on OTC Link, had eight market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3)… Read More

Penalties: N/A
Respondent: Scrap China Corp., et al.
Violation: WNC Housing 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 March 31, 2012… Read More

Penalties: $528,608.00
Respondent: Robert O. Carr and Katherine M. Hanratty
Violation: Robert O. Carr, the former CEO of Heartland Payment Systems, Inc., provided his longtime girlfriend, Katherine M. Hanratty, with confidential information about a potential acquisition of his company by another payment processing company… Read More

Penalties: TBD
Respondent: Todd Elliott Hitt, Kiddar Capital LLC, Kiddar Group Holdings, Inc., as Defendants, and Kiddar Herndon Station LLC, Kiddar Homebuilding Fund I LLC, Melbourne Retreat LLC, Kiddar Mass Ave LLC, Kiddar Ridgeview LLC, ESA Emerson LLC, ESA Highwood LLC, and Kiddar AQ LLC a/k/a Kiddar Aquicore LLC, as Relief Defendants
Violation: Over at least a four year period, Todd Elliott Hitt used two of his companies – Kiddar Capital LLC and Kiddar Group Holdings, Inc. – to raise more than $20 million from investors for the purpose of acquiring and operating the Silver Line office building, new home construction in Northern Virginia, and a fund managed by Hitt that invested in a start-up business… Read More

Penalties: TBD
Respondent: SEC Complaint – Todd Elliott Hitt, Kiddar Capital LLC, Kiddar Group Holdings, Inc., as Defendants, and Kiddar Herndon Station LLC, Kiddar Homebuilding Fund I LLC, Melbourne Retreat LLC, Kiddar Mass Ave LLC, Kiddar Ridgeview LLC, ESA Emerson LLC, ESA Highwood LLC, and Kiddar AQ LLC a/k/a Kiddar Aquicore LLC, as Relief Defendants
Violation: From no later than mid-2014 through at least September 2018, Defendants engaged in a scheme to solicit investments in various real-estate and other projects, made material misrepresentations and – 2 – omissions about the investments, and unlawfully misappropriated and commingled investor funds… Read More

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