Friday, September 6, 2013

SEC Litigation Releases: Week in Review

SEC Charges Perpetrator of Fraudulent Free-Riding and Securities Offering Schemes, September 3, 2013, (Litigation Release No. 22791)

According to the complaint (PDF), Ronald Feldstein and his entities, Mara Capital Management LLC and Vita Health of America LLC, "engaged in illegal free-riding by purchasing stock" through broker-dealers to whom Feldstein portrayed himself as a money manager. The alleged "free-riding" scheme resulted in "over $2 million in losses" to the broker-dealers. Additionally, Feldstein allegedly raised approximately $450,000 from investors by promising to use their investments to "purchase stock for them in a certain penny-stock issuer,...invest in a fashion company's initial public offering, and...invest in a hedge fund that Feldstein falsely described as substantial and successful." Feldstein instead allegedly used these funds for his own personal use. The SEC has charged the defendants with violating sections of the Exchange Act and Securities Act and seeks injunctions from future violations, payment of disgorgement by the defendants and relief defendant, Trademore Capital Management LLC, payment of civil monetary penalties, and a penny stock bar against Feldman.

SEC Charges Former Chairman and CEO of CECO Enviromental Corp. and API Technologies Corp. with Insider Trading and Other Violations, September 3, 2013, (Litigation Release No. 22790)

According to the complaint (PDF), Phillip J. DeZwirek, "former CEO, Chairman, and 10% beneficial owner of both CECO Environmental Corp. and API Technologies Corp.," has been charged "with insider trading...and engaging in hundreds of violations of the trade reporting and ownership disclosure rules of the federal securities laws." DeZwirek has agreed to settle the charges by paying over $1.5 million in disgorgement, prejudgment interest, and a civil penalty. He has also agreed to a five year officer and director bar.

No comments:

Post a Comment

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