Friday, May 17, 2013

SEC Litigation Releases: Week in Review

Final Settlements Reached in "Golden Goose" Wall Street Insider Trading Case, May 15, 2013, (Litigation Release No. 22700)

Earlier this week final judgments were entered against Jamil Bouchareb, Daniel Corbin, and Corbin's companies, Cobin Investment Holdings, LLC and Augustus Management LLC, for their alleged involvement in a widespread insider trading scheme. Bouchareb and Corbin have agreed to pay over $1.2 million in disgorgement and prejudgment interest to settle the charges. Additionally, the final judgment enjoins all of the defendants from future violations of the securities laws. Their disgorgement includes "the entities’ trading profits,...profits generated by [Bouchareb’s] parents’ trading, trading profits generated by [Bouchareb’s] girlfriend, relief defendant Maria Checa and her entity, relief defendant Checa International, Inc" as well as "profits generated by [Corbin's] father, relief defendant Lee Corbin."

In parallel criminal cases, "Bouchareb was sentenced to 30 months’ imprisonment followed by two years of supervised release and ordered to pay a $20,000 fine and forfeit $1,582,125" and "Corbin was sentenced to serve six months in prison followed by two years of supervised release and ordered to forfeit $1 million."

SEC Charges RINO, Its CEO, and Its Chairman of the Board with Scheme to Overstate Revenues and Divert Money for Personal Use, May 15, 2013, (Litigation Release No. 22699)

According to the complaint (PDF), RINO International Corporation, along with its Chief Executive Officer, Dejun “David” Zou, and its Chairman of the Board, Jianping “Amy” Qiu, overstated RINO's revenues from the first quarter of 2008 through the first three quarters of 2010. Additionally, Zou and Qiu allegedly diverted proceeds for personal use, including the purchase of a $3.5 million family home, automobiles, and designer clothes and accessories.

The defendants have consented to the entry of a judgment that permanently enjoins them from future violations of the Securities Act and Exchange Act and orders them to pay over $3.75 million in disgorgement and civil penalties. Additionally, the final judgment bars Zou and Qiu "from serving as officers and directors of a public company for a period of ten years."

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