Friday, February 10, 2012

SEC Litigation Releases: Week in Review


This is the first post in what will become a weekly tradition on the SLCG blog.

SEC Charges Kenneth A. Dachman for Orchestrating a Misappropriation Scheme and Offering Fraud, February 6, 2012 (Litigation Release No. 22254)

The SEC filed a complaint in the U.S. District Court for the Northern District of Illinois alleging that Kenneth A. Dachman had misappropriated nearly $2 million of investors funds by making false and misleading statements concerning the offerings of three companies for which he served as chairman.  In addition, the SEC charged the brokers (Scott A. Wolf and Stone Lion Management, Inc.) because they "acted as unregistered brokers in selling unregistered securities to investors without qualifying for an exemption from the SEC’s registration provisions."  The brokers have agreed to settle (without admitting to the charges filed against them) the dispute by paying approximately $370,000 and by agreeing to be excluded from the offering of penny stock for a period of one year.

Eleventh Circuit Court of Appeals Affirms the Court’s Findings and Remedies Imposed Against W. Anthony Huff,  February 6, 2012 (Litigation Release No. 22253)

In March 2008 (Litigation Release No. 20481), the SEC charged W. Anthony Huff, Danny L. Pixler, Anthony R. Russo, Otha Ray McCartha, and Charles J. Spinelli in the United States District Court for the Southern District of Florida with financial fraud through their involvement with Certified Services, Inc.  The original complaint alleged, over a three year period beginning in 2001, that the defendants "siphoned approximately $30 million from Certified through an elaborate scheme" of inflating the company's financial statements.  The defendants McCartha and Spinelli have consented to the Final Judgments entered by the US District Court providing for full injunctive relief.  Summary of the Final Judgement entered by the Southern District of Florida in this case can be found here: Pixler, Russo and Huff.  This most recent release summarizes the results of the appeals effort taken by W. Anthony Ross.

SEC Charges Smith & Nephew PLC with Foreign Bribery, February 6, 2012 (Litigation Release No. 22252)

The Securities and Exchange Commission today announced a settlement with Smith & Nephew PLC (a London-based global medical device company) to resolve SEC charges that the company violated the Foreign Corrupt Practices Act (FCPA).  In particular, the SEC alleged that the company used a distributor to make illicit payments to public doctors in Greece to increase sales originated from two Smith & Nephew PLC subsidiaries (Smith & Nephew Inc. and Smith & Nephew GmbH) by the doctors. Smith &Nephew PLC agreed (without admitting to the charges filed against them) to settle the SEC’s charges by paying more than $5.4 million and Smith & Nephew Inc. "agreed to pay a $16.8 million fine to settle parallel criminal charges announced by the U.S. Department of Justice today."

Final Judgement Entered Settling Commission's Insider Trading Case Against Attorney,  February 3, 2012 (Litigation Release No. 22251)

In March 2011 (Litigation Release No. 21877), the SEC alleged that the attorney Todd Leslie Treadway profited from trading securities based upon material, non-public information. In connection with the charges filed against the attorney, the United States District Court for the Southern District of New York entered a Final Judgment ordering Treadway to pay almost $40,000.  As a result of the charges, the SEC issued an administrative order "suspending Treadway from appearing or practicing before the Commission as an attorney."

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