Financial Enforcement Actions | Week Of December 09 To 14

Financial Enforcement Actions | Week of December 09 to 14

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FTC

Penalties: N/A
Respondent: Electrolux North America, Inc.
Violation: Deceptive U.S.-origin claims made in conjunction with Electrolux’s “Built with American Pride” campaign for Frigidaire-branded products that incorporate significant imported parts… Read More

NYSE

$435,000.00 in Fines

Penalties: $275,000.00
Respondent: Barclays Capital, Inc.
Violation: Barclays Capital Inc. violated: (i) NYSE Arca Options Rule 6.77A, by failing to obtain agreement of its customer before busting and adjusting a trade and adjusting trades in a manner that circumvents other Exchange Rules; (ii) NYSE Arca Options Rule 11.1 by busting a trade that resulted in an inferior price for its customer; (iii) NYSE Arca Options Rules 6.68 and 9.17 and NYSE Arca Rules 2.28 and 11.16, by failing to create, maintain, and preserve accurate records of adjustments to customer orders and documentation of customer instruction and/or agreement to modify trades pursuant to Rule 6.77A; (iv) and NYSE Arca Options Rule 11.18, by failing to establish and maintain adequate supervisory systems and written procedures reasonably designed to ensure compliance with NYSE Arca Options Rules… Read More

Penalties: $90,000.00
Respondent: Summit Securities Group, LLC
Violation: Summit Securities Group, LLC violated: (i) NYSE Arca Equities Rule 7.23, by failing to maintain continuous, two-sided trading interest in approximately 130,000 instances; and (ii) NYSE Arca Equities Rule 6.18(b), by failing to establish and maintain adequate supervisory procedures reasonably designed to ensure compliance with NYSE Arca Equities Rule 7.23… Read More

Penalties: $70,000.00
Respondent: Barclays Capital, Inc.
Violation: Barclays Capital Inc. violated: (i) NYSE Arca Options Rule 6.49(b), by effecting equity transactions after gaining knowledge of undisclosed terms and conditions of orders in related option series; and (ii) NYSE Arca Options Rule 11.18(b), by failing to establish and maintain adequate supervisory systems reasonably designed to ensure compliance with Rule 6.49(b)… Read More

FINRA

$504,000.00 in Fines

Penalties: N/A
Respondent: Thomas G. Cooper, Jr.
Violation: From September 2015 to October 2016 (the “Relevant Period”), while registered with PWC, Cooper submitted approximately 50 expense reports to the Firm in which he falsely characterized more than 1,300 of his personal expenses as having been incurred for business purposes. Cooper’s submission of false expense reports caused the Firm to pay more than $116,000 for Cooper’s personal expenses. By virtue of this conduct, Cooper converted Firm funds in violation of FINRA Rule 2010… Read More

Penalties: $300,000.00
Respondent: Merrill Lynch, Pierce, Fenner & Smith Inc.
Violation: Between approximately February 2010 and June 2010, Merrill Lynch failed to reasonably supervise EW, who, together with a third party, MS, engaged in a scheme to defraud a customer of the firm (“Customer A”)… Read More

Penalties: $45,000.00
Respondent: NTB Financial Corporation
Violation: During the review period of July 1, 2015 through September 30, 2015 (“the review period”), the firm charged its customers prices that were not fair in 71 principal transactions involving a single corporate bond, in violation of FINRA Rules 2121 and 2010… Read More

Penalties: $10,000.00
Respondent: Michael D. Jackson
Violation: Jackson recommended that a customer open an account away from Jackson’s firm for the purpose of trading options. The customer agreed, and over the course of seven months Jackson placed orders for forty-two sets of options transactions in the customer’s new account. Jackson did not contact the customer before placing any of those orders, nor did he provide requisite notice to either firm about his participation in those transactions. As a result of Jackson’s trading, the customer lost virtually all of her money, partly due to the costs of the trades, which totaled more than 17% of the account’s initial equity. As a result, Jackson violated FINRA Rules 2010, 2111, 2360, and 3280, and NASD Rules 2510 and 3050… Read More

Penalties: N/A
Respondent: Thomas G. Cooper, Jr.
Violation: From September 2015 to October 2016 (the “Relevant Period”), while registered with PWC, Cooper submitted approximately 50 expense reports to the Firm in which he falsely characterized more than 1,300 of his personal expenses as having been incurred for business purposes. Cooper’s submission of false expense reports caused the Firm to pay more than $116,000 for Cooper’s personal expenses. By virtue of this conduct, Cooper converted Firm funds in violation of FINRA Rule 2010… Read More

Penalties: TBD
Respondent: Jorge A. Reyes
Violation: From approximately May 2013 through August 2016 (the “Relevant Period”), Respondent Jorge A. Reyes (1) fraudulently sold private offerings; (2) converted funds from a customer that invested in one of the offerings; (3) failed to perform adequate due diligence for private offerings he sold; (4) recommended private offerings that were not suitable for a customer who was a divorced homemaker with two dependent children; and (5) used misleading marketing materials in connection with private offerings… Read More

Penalties: $5,000.00
Respondent: Scott Gary Dolven (“Dolven”)
Violation: Between May 2005 and October 2013, Dolven failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to disclose four federal tax liens and six state tax warrants in violation of Article V, Section 2(c) of the FINRA By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: $75,000.00
Respondent: E*TRADE Futures LLC (f/k/a Aperture, LLC d/b/a OptionsHouse)
Violation: During the Review Period, OMSL routed for execution to other member firms multiple options orders, representing a total of approximately 136,724 contracts, that were marked with an inaccurate origin code of Customer, instead of Professional Customer… Read More

Penalties: N/A
Respondent: Robert Jamison
Violation: Jamison has refused to appear for testimony requested pursuant to FINRA Rule 8210 on the date scheduled or at any time. By refusing to provide on-the-record testimony as requested pursuant to FINRA Rule 8210, Jamison violates FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Stewart Clinton Malloy
Violation: Failing to attend an on-the-record interview during an investigation, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Christopher C. Hellman
Violation: In November 2018, Hellman violated FINRA Rules 8210 and 2010 by failing to provide documents and information requested pursuant to FINRA Rule 8210… Read More

Penalties: $5,000.00
Respondent: Holly Louise Walcher
Violation: Walcher falsified Firm documents in violation of NASD Rule 2110 (from July 2006 through December 14, 2008) and FINRA Rule 2010 (from December 15, 2008 through August 2016), and violated NASD Rules 3110 (from July 2006 through December 4, 2011) and 2110 (from July 2006 through December 14, 2008) and FINRA Rules 4511 (from December 5, 2011 through August 2016) and 2010 (from December 15, 2008 through August 2016) by causing the Firm to create and maintain inaccurate books and records in violation of Section 17(a) of the Exchange Act and Rules 17a-3 and 17a-4 promulgated thereunder… Read More

Penalties: $64,000.00
Respondent: Aegis Capital Corp.
Violation: In the period from July 1, 2015 through March 31, 2016, the firm failed to report to TRACE a total of 241 TRACE-eligible securities transactions, and in the period from October 1, 2016 through June 30, 2017, the firm failed to report to TRACE a total of 335 TRACE-eligible securities transactions within the time required by FINRA Rule 6730(a). This conduct violated FINRA Rule 6730(a) and constituted a pattern and practice of late reporting without exceptional circumstances, in violation of FINRA Rule 2010… Read More

SEC

$70,907,094.23 in Fines

Penalties: $51,444,135.40
Respondent: America Modern Green Senior (Houston) LLC, America Modern Green Community (Houston) LLC and America Modern Green Residential (Houston) LLC
Violation: Respondents’ misuse of $20.5 million of investor funds and their false statements and omissions regarding the use of funds and the management associated with the Project violated Sections 17(a)(2) and 17(a)(3) of the Securities Act… Read More

Penalties: TBD
Respondent: Rajeshwar R. Gannamaneni, Deepthi Gandra, and Linga R. Gannamaneni
Violation: Rajeshwar Gannamaneni provided nonpublic information about impending mergers, acquisitions, and tender offers to his wife Deepthi Gandra and his father Linga Rao Gannamaneni, who lives in India… Read More

Penalties: $1,250,000.00
Respondent: Natixis Securities Americas LLC
Violation: These proceedings arise out of Natixis’ failure to submit to the Commission complete and accurate data in response to Commission staff electronic blue sheets (“EBS”) requests, resulting in the reporting of EBS that was incomplete or deficient… Read More

Penalties: $400,000.00
Respondent: Lai Guanglin (Alan)
Violation: Lai, the Executive Chairman of the Board of Directors and principal shareholder of Agria Corporation (“Agria”), violated Exchange Act Section 10(b) and Rules 10b-5(a) and (c) thereunder by engaging in a fraudulent scheme to manipulate the market price of Agria’s American Depository Shares (“ADSs”)… Read More

Penalties: $1,400,000.00
Respondent: MUFG Securities Americas Inc.
Violation: From May 22, 2015 to March 30, 2018 (the “relevant period”), MUSA submitted 860 EBS to the Commission, containing 687,176 transactions, nearly all of which contained missing or deficient data. As a result, MUSA violated the recordkeeping and reporting requirements of Section 17(a)(1) of the Exchange Act and Rules 17a-4(j) and 17a-25 thereunder… Read More

Penalties: $3,500,000.00
Respondent: Citadel Securities LLC
Violation: From November 2012 to August 2016, Citadel submitted 2,774 EBS to the Commission, all of which contained deficient information, resulting in incorrect reporting of trade execution time data for approximately 80 million trades. As a result, Citadel violated the recordkeeping and reporting requirements of Section 17(a)(1) of the Exchange Act and Rules 17a-4(j) and 17a-25 thereunder… Read More

Penalties: $3,000,000.00
Respondent: Agria Corporation
Violation: Between 2010 and 2013, Agria engaged in a course of fraudulent accounting related to its July 2010 divestiture of Taiyuan Primalights III Modernized Agriculture Development Co., Ltd. (“P3A”), a consolidated affiliated entity. Agria materially overstated the value of the consideration it received in the transaction and concealed material losses as a result of the divestiture… Read More

Penalties: TBD
Respondent: Jared Jeffrey Davis and Dale Burke Pinchot
Violation: Davis misrepresented the number of investors who successfully traded binary options and failed to disclose that, to be successful, an investor would need to win an unlikely high percentage of trades… Read More

Penalties: $50,000.00
Respondent: Alfred C. Teran
Violation: Between 2011 and 2015, the Respondent willfully violated Section 15(a) of the Exchange Act by selling or participating in the offer and sale of securities to hundreds of investors across the country in connection with unregistered offerings organized by Christopher A. Faulkner… Read More

Penalties: $25,000.00
Respondent: Frontier Oilfield Services, Inc.
Violation: On one occasion, Frontier violated the Interim Review Requirement by filing a Form 10-Q with the Commission that contained financial statements that were not reviewed by an independent public accounting firm… Read More

Penalties: $6,902,363.83
Respondent: Landaas & Company and Robert W. Landaas
Violation: From 1999 through March 2017, registered investment adviser and broker-dealer L&C and its Chairman and sole owner – Landaas – received undisclosed financial compensation by having an unaffiliated clearing broker (the “Clearing Broker”) charge L&C advisory clients a $20 mark-up included in the Clearing Broker’s “confirmation fee.”… Read More

Penalties: TBD
Respondent: Gregory E. Webb, et al.
Violation: Webb and InfrAegis made false and misleading claims about the company’s commercial success and the existence of contracts for the installation of InfrAegis’ products… Read More

Penalties: $1,283.00
Respondent: Waddell & Reed, Inc., Waddell & Reed Investment Management Company and Waddell & Reed Services Company
Violation: The Commission concluded that the Respondents knowingly permitted three account holders to engage in market timing activity from December 1998 through the fall of 2003 and were aware that such conduct would dilute the returns of other fund investors to whom they owed a fiduciary duty… Read More

Penalties: $2,934,312.00
Respondent: Yucaipa Master Manager, LLC
Violation: This matter arises from Yucaipa’s negligent failure to disclose several financial conflicts of interest to the funds, as well as Yucaipa’s misallocation of fees and expenses between the funds, the funds’ portfolio investments, Yucaipa, and the Principal’s personal investments… Read More

Penalties: TBD
Respondent: Thomas H. Laws, et al.
Violation: Laws misappropriated the funds and attempted to hide his theft from the company and its independent auditor by fabricating documents, including vendor invoices, agreements, bank records, and communications… Read More

Penalties: TBD
Respondent: Craig Arsenault, Atlas Capital Management, Inc., and ACT Global Investments
Violation: Arsenault solicited investments in ACT, telling his advisory clients that their funds would be used to make secured loans to doctors for the purpose of acquiring medical equipment… Read More

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