Friday, December 5, 2014

Enforcement Actions: Week in Review

SEC ENFORCEMENT ACTIONS

SEC Charges California Resident With Fraudulent Sales of Stock
December 2, 2014 (Litigation Release No. 268)
The SEC has charged Vinay Kumar Nevatia for fraudulently selling $900,000 of private shares of CSS Corp. The SEC contends that Kumar, living in Palo Alto under several aliases, sold shares in 2011 and 2012 that he had already sold in 2008. Kumar has never been registered with the SEC.

SEC Announces Fraud Charges Against Two Executives in Scheme Involving Fake Occupants at Senior Residences
December 3, 2014 (Litigation Release No. 269)
Ex-CEO Laurie Bebo and ex-CFO John Buono have been charged by the SEC for fraud. The SEC alleges that during their management of Assisted Living Concepts Inc. they falsely claimed additional residents in order to meet minimum occupancy rates outlined in their facilities’ lease agreements. Failing to meet those terms would have meant default on their lease with Ventas Inc., a Chicago based REIT.

SEC Charges Montana Man in Pump-and-Dump Scheme Involving Virginia-Based Penny Stock Company
December 4, 2014 (Litigation Release No. 270)
The SEC has charged Montana penny stock promoter, Matthew Carley, with security fraud. The SEC alleges that Carley, acquired shares of Red Branch Technologies through reverse merger. Following this, Carley promoted Red Branch through email campaigns at the same time false information regarding Red Branch’s operations was released. Following a rise in price, Carley sold his shares for $789,478. He has agreed to settle with the SEC.

SEC Charges Virginia Beach-Based Bank Holding Company With Accounting Violations
December 5, 2014 (Litigation Release No. 271)
A Virginia holding company and its former CFO, Neal Petrovich, have agreed to settle with the SEC over improper accounting practices. Hampton Roads Bankshares overstated their deferred tax asset, not including a valuation allowance in spite of their own internal reports. Losses on their income statements for 2009 and the first quarter of 2010 were understated as a result. The company and ex-CFO have agreed to pay $200,000 and $25,000 penalties, respectively.


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