Friday, August 23, 2013

SEC Litigation Releases: Week in Review

SEC Settles Claims Against Ebrahim Shabudin Arising from Understated Bank Losses During Financial Crisis, August 22, 2013, (Litigation Release No. 22786)

Earlier this month, the SEC's claims against Ebrahim Shabudin (the former Chief Operating Officer of UCBH Holdings, Inc.) were settled. The SEC "alleges Mr. Shabudin and other defendants concealed losses on loans and other assets from the bank’s auditors and delayed the proper reporting of those losses." To settle the charges, Shabudin has agreed to pay a civil penalty of $175,000, "with the penalty partially reduced by the amount paid as a civil penalty in a related administrative action brought against him by the Federal Deposit Insurance Corporation." Shabudin also consented to a final judgment that enjoins him from future violations of the securities laws and bars him from acting as an officer or director of a public company.

Court Enters Final Judgments by Consent Against SEC Defendants Giuseppe Pino Baldassarre and Robert Mouallem, August 21, 2013, (Litigation Release No. 22785)

On August 16, final judgments were entered against Giuseppe Pino Baldassarre and Robert Mouallem for their alleged involvement in "a fraudulent broker bribery scheme designed to manipulate the market for the common stock of Dolphin Digital Media, Inc." The final judgments permanently enjoin the defendants from future violations of the securities laws, order them to "pay total combined disgorgement and prejudgment interest of $21,932.03, which is deemed satisfied by the forfeiture orders entered against them in a parallel criminal action," and bar them from participating in the offering of penny stock. Additionally, an officer and director bar has been put in place against Baldassarre.

Federal Court Permanently Enjoins Atlanta-Area Registered Representative Blake Richards from Securities Fraud Violations, August 20, 2013, (Litigation Release No. 22784)

Earlier this week, an order of permanent injunction was entered against Blake Richards, which enjoins him "from further violations of the securities laws in connection with allegations that the registered representative misappropriated investor funds." According to the SEC, Richards "misappropriated approximately $2 million from at least seven investors." The order determined that "the issues of disgorgement and civil penalties will be resolved on motion of the Commission at a later date."

Securities and Exchange Commission v. Robert Narvett and Shield Management Group, Inc., August 19, 2013, (Litigation Release No. 22782)

According to the complaint (PDF), Robert Narvett and his company, Shield Management Group, Inc., defrauded investors of at least $940,000. Narvett allegedly raised the "funds though the fraudulent offer and sale of promissory notes issued by Shield" and then misappropriated these funds for his personal use. The complaint charges the defendants with violating the Securities Act and Exchange Act, and seeks permanent injunction, disgorgement, prejudgment interest, and civil penalties.

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