Financial Enforcement Actions | Week Of Jan 27 To Feb 01

Financial Enforcement Actions | Week of Jan 27 to Feb 01

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CFPB

Penalties: N/A
Respondent: NDG Financial Corp., Northway Financial Corp., Ltd., Northway Broker, Ltd. Et al.
Violation: Defendants violated the Consumer Financial Protection Act of 2010 by misrepresenting to consumers in states where loans offered by the defendants violated state licensing or usury laws that they were obligated to repay loan amounts when such an obligation did not exist because state law voided the loan… Read More

FTC

Penalties: TBD
Respondent: Sycamore Partners II, L.P., Staples, Inc, and Essendant Inc
Violation: Staples competes with Essendant-sourced independent dealers to sell office supplies to mid-sized business customers. As a result of the acquisition, Staples would have access to commercially sensitive business information on Essendant’s reseller customers, and those resellers’ end customers, which could allow Staples to offer higher prices than it otherwise would when bidding against a reseller for an end customer’s business… Read More

FINRA

$233,845.80 in Fines

Penalties: $20,000.00
Respondent: Imtiaz (Raana) Khan
Violation: During the period January 2013 through at least March 2016, while associated with Windsor Street Capital, LP, f/k/a Meyers Associates, L.P. (CRD No. 34171) (“Windsor Street”) Khan functioned in a principal capacity for which he was not registered and for which he had not passed the appropriate qualification exam. As a result, Khan violated NASD Rules 1021 and 1022 and FINRA Rule 2010… Read More

Penalties: $7,500.00
Respondent: Joshua Zev Miller
Violation: During the period of October 2015 through August 2017 (the “Relevant Period”), Miller engaged in a check-kiting scheme whereby he deposited into his personal checking accounts with the Firm’s affiliated bank (the “Bank”) a total of 35 checks, totaling approximately $37,249, that had been previously cashed. Although the Bank initially credited Miller’s accounts for these deposits, each of the deposits was subsequently rejected. By engaging in check-kiting, Miller violated FINRA Rule 2010… Read More

Penalties: $7,693.86
Respondent: Peter Orlando
Violation: Respondent engaged in unethical conduct by assuming control over an elderly customer’s finances, made an unsuitable recommendation to the customer, and held in his files two blank forms that the customer had signed… Read More

Penalties: $119,651.94
Respondent: Silver Leaf Partners, LLC
Violation: Paying transaction-based compensation to non-FINRA members and for supervisory failures… Read More

Penalties: N/A
Respondent: Edward Beyn, Brent Morgan Porges, Craig Scott Taddonio
Violation: Registered representative excessively traded and churned customer accounts and made unsuitable recommendations to a customer. Registered representative and principal failed to exercise reasonable supervision in light of red flags that registered representatives were, or might be, excessively trading customer accounts, and he gave false testimony to FINRA in an onthe-record interview… Read More

Penalties: $25,000.00
Respondent: Revere Securities, LLC
Violation: Revere failed to accurately report municipal securities transactions to the RTRS and failed to maintain reasonably designed written supervisory procedures (“WSPs”) related to municipal securities from July 7, 2016 through June 28, 2017 (the “Relevant Period”)… Read More

Penalties: TBD
Respondent: Vincent Joseph Storms
Violation: Vincent Joseph Storms falsified data he submitted to Raymond James & Associates, Inc. (“RJA”) in connection with branch audits that he performed, in violation of FINRA Rule 2010, caused RJA to maintain false books and records, in violation of FINRA Rules 4511 and 2010, and failed to timely appear for on-the record (“OTR”) testimony, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $20,000.00
Respondent: Bruce Meyers
Violation: Tacopino, an employee in Windsor Street’s operations department, fraudulently allocated profitable day trades to his personal account and other favored accounts at Windsor Street while steering unprofitable trades to the Firm’s customers or to Windsor Street itself… Read More

Penalties: $20,000.00
Respondent: John F. Davenport
Violation: In late 2014 and early 2015, while registered with FINRA through Securities America, Davenport placed two securities transactions for a registered representative of another firm and split the commissions generated from the transactions with that representative, without the knowledge or consent of either firm, and without reflecting the commission sharing on Securities America’s books and records, in violation of FINRA Rules 4511 and 2010… Read More

Penalties: $9,000.00
Respondent: Guy Patrick Wyser-Pratte
Violation: Between July 2013 and November 2016, Wyser-Pratte willfully failed to amend his Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to disclose a 2013 finding by the AMF that he committed insider trading. By failing to amend his Form U4 to reflect this reportable event, Wyser-Pratte violated Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: $5,000.00
Respondent: Christoper Duke Bennett
Violation: Between January 2014 and December 2015, Bennett exercised discretionary trading authority in the accounts of several customers without written authorization, in violation of NASD Rule 2510(b) and FINRA Rule 2010… Read More

SEC

$6,260,592.25 in Fines

Penalties: TBD
Respondent: Joseph A. Meyer, Jr. and Statim Holdings, Inc.
Violation: Meyer promised investors that, in return for giving up substantial portions of their profits, investors in one class would be protected from losses, a feature he called “No Loss Protection,” and investors in two other classes would receive guaranteed fixed returns. The complaint further alleges that Meyer told investors that the relinquished profits would be used to fund the No Loss Protection and guaranteed returns when Arjun had insufficient profits… Read More

Penalties: $3,531,714.92
Respondent: Credit Suisse Securities (USA) LLC
Violation: On July 12, 2018 the Commission published a Notice of Proposed Plan of Distribution and Opportunity for Comment (“Notice”)3 pursuant to Rule 1103 of the Commission’s Rules on Fair Fund and Disgorgement Plans (“Rules”)… Read More

Penalties: TBD
Respondent: Phillip Michael Carter, et al.
Violation: Carter, Guess, and Tilford claimed to offer investments in Carter’s legitimate real estate development companies, which were purportedly backed by hard assets from actual real estate development projects. Instead, the complaint alleges, the individual defendants sold securities issued by unrelated, but closely-named, entities that had no assets. Carter then misappropriated investor funds to pay $1.2 million towards a personal IRS tax lien, operate a luxury hunting ranch, fund his lifestyle, and make over $3 million in Ponzi payments to investors… Read More

Penalties: N/A
Respondent: Perry Douglas West, Esq.
Violation: West, as the Chief Executive Officer of New Global, directly or indirectly offered and sold securities of New Global when no registration statement was filed or in effect with the Commission and no exemption from registration applied… Read More

Penalties: $100,000.00
Respondent: Digital Turbine, Inc.
Violation: This matter involves violations of the federal securities laws in connection with the Respondent’s Internal Control over Financial Reporting (“ICFR”). Respondent failed to create and implement effective ICFR for seven consecutive annual reporting periods from fiscal year ended 2011 through fiscal year ended 2017… Read More

Penalties: N/A
Respondent: Howard B. Present
Violation: Misleading investors about the AlphaSector strategy, the flagship product of F-Squared which Present launched in the wake of the financial crisis… Read More

Penalties: $200,000.00
Respondent: Grupo Simec S.A.B. de C.V.
Violation: This matter involves violations of the federal securities laws in connection with the Respondent’s Internal Control over Financial Reporting (“ICFR”). Respondent did not remediate material weaknesses in ICFR for ten consecutive annual reporting periods from fiscal year ended 2008 through fiscal year ended 2017, and it failed to complete in certain periods the required management evaluation of internal controls… Read More

Penalties: $100,000.00
Respondent: Lifeway Foods, Inc.
Violation: These proceedings involve violations of the federal securities laws in connection with the Respondent’s Internal Control over Financial Reporting (“ICFR”). Respondent failed to create and implement effective ICFR for ten consecutive annual reporting periods and failed to complete in certain periods the required management assessment of internal controls. In addition, Respondent announced three financial statement restatements during the period from 2007 to 2016… Read More

Penalties: N/A
Respondent: Kenneth Grace
Violation: While acting as an investment adviser, Grace employed acts, practices, and courses of business which were fraudulent, deceptive, or manipulative, and made untrue statement of material facts and omitted to state material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading, to any investor or prospective investor in a pooled investment vehicle, including false statements about Goldsky’s relationship with purported service providers it had engaged to perform services, and about the size of Goldsky’s then-current assets under management… Read More

Penalties: $1,249,607.33
Respondent: Canadian Imperial Holdings, Inc. and CIBC World Market Corp.
Violation: Participation in a scheme to defraud numerous mutual funds and shareholders in the Affected Funds through late trading and deceptive market timing… Read More

Penalties: N/A
Respondent: Evan Louis Greebel, Esq.
Violation: Between 2011 and 2014, Greebel represented Retrophin, Inc. (“Retrophin”), a pharmaceutical company, as its lead outside counsel. In 2013 and 2014, Martin Shkreli (“Shkreli”), the former CEO of Retrophin, with assistance from Greebel, fraudulently induced Retrophin to issue stock and make cash payments to certain disgruntled investors in a hedge fund operated by Shkreli who were threatening legal action against Shkreli… Read More

Penalties: $1,044,270.00
Respondent: Daniel H. Glick, et al.
Violation: Glick and FMS provided clients with false account statements that hid Glick’s improper use of client funds to pay personal expenses and his improper transfers of funds to Forte and another individual. The SEC further alleged that Glick sent more than $1 million to Forte or to third-parties for Forte’s benefit… Read More

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