Friday, July 19, 2013

SEC Litigation Releases: Week in Review

Court Finds Massachusetts-Based Viking Financial Group, Inc. and its Owner Steven Palladino Liable for Violations of the Securities Laws, July 18, 2013, (Litigation Release No. 22752)

The federal district court in Massachusetts "held that...Steven Palladino, and his...company, Viking Financial Group, Inc., committed securities fraud." According to the SEC, "since April 2011, Palladino and Viking falsely promised at least 33 investors that their money would be used to conduct the business of Viking - which was to make to short-term, high interest loans to those unable to obtain traditional financing." In reality, few real loans were made, and the defendants used investors' funds "largely to make payments to earlier investors and to pay for the Palladino family's substantial personal expenses." The SEC charged the defendants with violating sections of the Securities Act and Exchange Act. The court "stated that the Commission is entitled to injunctive relief and a temporary order of disgorgement of ill-gotten gains in the amount of at least $3.1 million." The court "held that imposition of any civil penalties would be determined after a criminal case against the defendants has been resolved."

Court Enters Final Judgments Against Defendants Syndicated Food Service International, Inc., Nick Pirgousis, Frank Dolney, Gary Todd, Mario Casias, Thomas Tanis, Iain H.T. Brown, Fidra Holdings Ltd., William Brown, Joseph Ferragamo, and Christopher Quintana, and Dismisses Claims Against Defendants Delta Asset Management Company, LLC, William Scott, and Michelle Kramish Kain, July 12, 2013, (Litigation Release No. 22751)

On July 3, 2013, a final judgment was entered against Syndicated Food Service International, Inc that enjoins it from future violations of the Securities Act and Exchange Act. The SEC's original complaint "alleged that from 1997 through 2003" numerous defendants "participated in a massive broker bribery scheme involving the stock of nine public companies, including Syndicated." These defendants then sold the "stock into the public market for personal gain and paid undisclosed kickbacks to brokers responsible for selling the stock." The defendants that were previously charged include Nick Pirgousis, Frank Dolney, Gary Todd, Mario Casias, Thomas Tanis, Iain H.T. Brown, Fidra Holdings Ltd., William Brown, Joseph Ferragamo, and Christopher Quintana. Charges against Delta Asset Management Company, LLC, William Scott and Michelle Kramish Kain were dismissed.

SEC Halts Texas-Based Forex Trading Scheme, July 12, 2013, (Litigation Release No. 22750)

According to the complaint (PDF), Kevin G. White and his companies, KGW Capital Management and Revelation Forex Fund, defrauded investors "in a foreign currency exchange trading scheme." According to the SEC, White raised over $7.1 million by "touting a sophisticated low-risk forex trading strategy yielding astronomical returns." He also claimed to have a 25-year Wall Street career. In reality, "the forex trading has incurred losses of investor funds, and White actually spent only six years as a licensed securities professional in Houston before being barred by the New York Stock Exchange two decades ago." White allegedly used more than $1.7 million of the investor money to cover his personal expenses. The court has "granted the SEC's request for an asset freeze and temporary restraining order against White, KGW Capital, Revelation Forex, and RFF GP LLC, which is the general partner of Revelation Forex." The SEC has charged the defendants with violationing sections of the Securities Act and Exchange Act and seeks "disgorgement of ill-gotten gains with prejudgment interest and financial penalties as well as preliminary and permanent injunctions."

No comments:

Post a Comment

Please keep comments appropriate. Malicious comments or solicitations will be removed.