Financial Enforcement Actions | Week Of November 18 To 23

Financial Enforcement Actions | Week of November 18 to 23

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FTC

Penalties: TBD
Respondent: Impetus Enterprise, Inc.
Violation: Operators of the scheme, including recidivist scammer Tuan Duong, falsely promoted a 96 percent success rate in reducing consumers’ student loan payments, according to the FTC’s complaint. In fact, the consumers who purchased these services often did not receive any debt relief and lost hundreds of dollars… Read More

FINRA

$440,000.00 in Fines

Penalties: N/A
Respondent: Cheryl Ann Stallings
Violation: Between May 2014 and December 2016, Stallings circumvented her firm’s supervisory system and procedures by failing to disclose that she was named as power of attorney for a firm customer, had control over two firm customers’ bank accounts, was named as successor trustee and beneficiary of a firm customer’s trust and by making false statements in firm documents relating to each, in violation of FINRA Rule 2010… Read More

Penalties: N/A
Respondent: John Robert Nicholson
Violation: During the period of December 2014 to November 2016 (the “Relevant Period”), Nicholson converted funds from Merrill by submitting false expense reports. By converting Finn funds, Nicholson violated F1NRA Rule 2010… Read More

Penalties: $15,000.00
Respondent: Melvin Securities, Inc.
Violation: Melvin was found to have (i) violated SEC Rule 17a-5 and FINRA Rule 2010 by filing an inaccurate FOCUS report for July 2012; (ii) violated SEC Rule 17a-5 and FINRA Rule 2010 by failing to timely file FOCUS reports in July 2012, August, 2012, November 2012; and February 2013; and (iii) violated NASD Rule 1022 and FINRA Rule 2010 by failing to employ a registered FINOP between July 1, 2012 and December 26, 2012… Read More

Penalties: $400,000.00
Respondent: H. Beck, Inc.
Violation: From January 2013 through August 2018, H. Beck failed to establish and maintain a supervisory system, and failed to establish, maintain, and enforce WSPs, reasonably designed to achieve compliance with applicable securities laws, regulations, and FINRA rules concerning multi-share class variable annuities. Based on the foregoing, H. Beck violated NASD Rule 3010 and FINRA Rules 2330, 3110, and 2010… Read More

Penalties: $20,000.00
Respondent: Raymond John Pirrello, Jr.
Violation: From 2008 through 2015, Pirrello exchanged numerous business-related text messages, using his personal cell phone, and business-related emails, using an unauthorized personal email address, with one of his customers at Garden State. Pirrello did not retain any of these customer communications or provide them to Garden State. When asked under oath about his use of text messages with customers, Pirrello provided misleading on-the-record testimony stating that he did not send text messages to his customers… Read More

Penalties: N/A
Respondent: Anthony Fusco
Violation: Fusco refused to provide on-the-record testimony on October 29, 2018 as requested by FINRA Staffs Rule 8210 request, dated October 1, 2018, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Richard A. Juracka
Violation: From August 2016 through July 2017, Juracka exercised discretion without written authorization in the accounts of seven customers, in violation of NASD Rule 2510(b) and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: David Fagenson
Violation: Between January 2012 and September 2016 (the “Relevant Period”), Fagenson engaged in quantitatively unsuitable trading in the accounts of three senior customers in violation of NASD Rule 2310 and FINRA Rules 2111 and 2010… Read More

SEC

$7,773,913.00 in Fines

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Penalties: $5,000,000.00
Respondent: Vantage Drilling International
Violation: VDC failed to devise a system of internal accounting controls with regard to VDC’s transactions with VDC’s former outside director, largest shareholder, and only supplier of drilling assets (“Director A”), and failed to properly implement internal accounting controls related to its use of third-party marketing agents… Read More

Penalties: $50,000.00
Respondent: Retirement Capital Strategies, Inc.
Violation: RCS, a registered investment adviser, failed to apply advisory fee discounts to certain client accounts contrary to its disclosures, representations to clients, and its advisory agreements… Read More

Penalties: N/A
Respondent: Mark Hotton
Violation: Hotton acted with intent to promote the carrying on of the unlawful activity and knew that the transactions were designed to conceal the nature, location, source, ownership, and control of the proceeds of the unlawful activity… Read More

Penalties: N/A
Respondent: Robert William Myers, Jr.
Violation: Myers used the telephone and the mails to actively solicit investors, sold the 2010-JV interests to numerous investors, gave advice to prospective investors about the merits of the offered investments, and received transaction-based compensation in the form of commissions (approximately 10% of the proceeds of each sale) from Mieka of $121,466… Read More

Penalties: N/A
Respondent: eRoomSystem Technologies, Inc.
Violation: eRoomSystem 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 since it filed a Form 10-Q for the period ended September 30, 2016… Read More

Penalties: $727,804.00
Respondent: Michael T. Gluk, CPA
Violation: On January 23, 2018, a judgment of conviction was entered against Gluk in United States v. Baker and Gluk, Crim. Action No. 1:13-cr-346-SS, in the United States District Court for the Western District of Texas, Austin Division, finding him guilty of one count of conspiracy to commit wire fraud and securities fraud, in violation of Title 18, United States Code, Section 371… Read More

Penalties: $1,658,083.00
Respondent: Steve Qi, et al.
Violation: Qi and his law firm acted as unregistered brokers in connection with sales of EB-5 investments and defrauded their investor clients by not fully disclosing their receipt of transaction-based compensation… Read More

Penalties: TBD
Respondent: Kimberly Pine Kitts
Violation: Kitts forged her clients’ signatures on withdrawal requests to misappropriate money from their variable annuity and investment accounts… Read More

Penalties: $338,026.00
Respondent: Home Solutions of America, Inc., et al.
Violation: Former CEO, Frank J. Fradella, and its former CFO, Jeffrey M. Mattich, four other former executives, and a business partner in 2009 with fraud for lying about non-existent business deals in the 2005-2008 time period and inflating the company’s revenues and stock price… Read More

CFPB

$11,790,000.00 in Fines

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Penalties: $11,790,000.00
Respondent: Santandar Consumer USA, Inc.
Violation: Santander violated the Consumer Financial Protection Act of 2010 by not properly describing the benefits and limitations of its S-GUARD GAP product, which it offered as an add-on to its auto loan products… Read More

FRS

$81,265,000.00 in Fines

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Penalties: $81,265,000.00
Respondent: SOCIÉTÉ GÉNÉRALE S.A.
Violation: From at least 2007 to 2012, among other things, certain overseas offices of the Bank, principally in Paris, France, processed certain U.S. dollar-denominated funds transfers through the Branch and through unaffiliated U.S. financial institutions involving parties subject to OFAC Regulations that did not contain relevant information within the payment messages necessary for the U.S. financial institutions to determine whether these transactions were carried out in a manner consistent with U.S. law, which resulted in violations of OFAC Regulations… Read More