Friday, June 19, 2015

Enforcement Actions: Week in Review

SEC ENFORCEMENT ACTIONS

Swiss Trader to Pay $2.8 Million to Settle Insider Trading Charges
June 15, 2015 (Litigation Release No. 119)
The SEC alleges that Swiss trader Helmut Ansheringer bought stock and call options based on non-public information that AuthenTec, a company that provides fingerprint sensors and software, would be purchased by Apple Inc. AuthenTec’s public announcement that they would become a wholly-owned subsidiary of Apple led to a roughly 60% increase in their stock price, which garnered Ansheringer $1.8 million. Ansheringer has agreed, without admitting or denying wrongdoing, to pay $2.8 million to settle the charges.

Investment Advisory Firm’s Former President Charged With Stealing Client Funds
June 15, 2015 (Litigation Release No. 120)
Former president of SFX Financial Advisory Management Enterprises Brian J. Ourand has been charged for allegedly stealing $670,000 over five years from his clients’ accounts. SFX is an investment advisory firm based in Washington D.C. that specializes in providing financial services to current and former professional athletes. SFX and its CCO, Eugene S. Mason, have been charged separately and agreed to settle charges by paying $150,000 and $25,000, respectively.

SEC Announces Charges Against Retirement Plan Custodian in Connection With Ponzi Scheme
June 16, 2015 (Litigation Release No. 121)
The SEC has charged Ohio self-directed IRA provider Equity Trust Company for their involvement in selling fraudulent investments from Ephren Taylor and Randy Poulson. The SEC alleges that Equity Trust representatives attended events put on by Taylor and Poulson and encouraged attendees to move their retirement savings from traditional IRAs to self-directed IRAs at Equity Trust so that they could invest in Taylor and Poulson’s offerings. It is alleged that Equity Trust ignored red flags that these offerings were fraudulent. In March 2015 Taylor was sentenced to 20 years in prison for conducting a Ponzi scheme. Poulson was charged in May, also for conducting a Ponzi scheme.

SEC Charges Investment Adviser With Fraudulently Funneling Client Assets to Companies in Owner’s Interest
June 17, 2015 (Litigation Release No. 122)
Massachusetts investment advisory firm Interinvest Corporation and its owner, Hans Peter Black, have been charged for fraudulently investing clients’ funds into four Canadian penny stock companies that Black had undisclosed interests in. Black served on the board of directors of these companies, which have collectively paid $1.7 million to an entity owned by Black. The SEC alleges that Black’s clients have lost up to 70% of the $17 million that was invested in these companies. The SEC is pursuing a court order to freeze Interinvest’s assets and have them relinquish authority over their clients’ accounts.

SEC Announces Enforcement Action for Illegal Offering of Security-Based Swaps
June 17, 2015 (Litigation Release No. 123)
Silicon Valley company Sand Hill Exchange was subject to an SEC enforcement action because of their violation of Dodd-Frank provisions disallowing the offering of security-based swaps to non-eligible contract participants. Sand Hill offered, bought and sold these security based swaps for seven weeks on their website before the SEC detected the violation. The platform was shut down in compliance with the SEC’s order and Sand Hill has agreed to pay a $20,000 penalty.

SEC Charges Investment Adviser and Mutual Fund Board Members With Failures in Advisory Contract Approval Process
June 17, 2015 (Litigation Release No. 124)
Commonwealth Capital Management, majority owner John Pasco III, and former trustees J. Gordon McKinley III, Robert R. Burke and Franklin A. Trice III have agreed to settle the SEC’s charges without admitting or denying allegations for violations that include failure to satisfy the mutual fund advisory contract approval process. As majority owner, Pasco caused violations of the Investment Company Act of 1940 based on the incomplete and inaccurate information that was provided by Commonwealth Capital Management to two mutual fund boards. Pasco and the firms have agreed to settle the SEC’s charges which consists of a $50,000 penalty; the trustees have agreed to each pay penalties of $3,250.

SEC Charges 36 Firms for Fraudulent Municipal Bond Offerings
June 18, 2015 (Litigation Release No. 125)
The SEC has filed enforcement actions against 36 municipal bond underwriting firms over fraudulent municipal bond offerings. These are the first penalties under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, the agency’s voluntary self-reporting program targeting inaccuracies in municipal bond offering documents. Between 2010 and 2014, the 36 firms violated federal law by providing inadequate due diligence and sold municipal bonds using inaccurate and false documentation. All of the firms have agreed to settle the charges without admitting or denying allegations. Under the MCDC terms, they will pay civil penalties under different circumstances that include the size of the fraudulent offerings and the size of the firm; the maximum penalty imposed is $500,000. To view the MCDC initiative, click here.

SEC Charges Microcap Oil Company, CEO, and Stock Promoter With Defrauding Investors
June 18, 2015 (Litigation Release No. 126)
The SEC has charged Norstra Energy, CEO Glen Landry, and stock promoter Eric Dany for falsifying information on Norstra Energy’s property, profitability and prospects. Norstra Energy, Landry, and Dany defrauded investors with misleading claims, promises and inaccurate information on the location of the property as well as the reserve estimates. The reserve estimates were exaggerated and claimed to have 8.5 billion barrels of oil with the wells having a 99 percent chance of profitability. In June 2013, the SEC suspended trading since the stock price increased nearly 600 percent in a three-month period after these false claims. The SEC seeks final judgements, and the SEC seeks to bar Landry from serving as an officer or director of a public company or participating in a penny stock offering.

No comments:

Post a Comment

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