SEC ENFORCEMENT ACTIONS
SEC Charges Eight for Roles in
Widespread Pump-And-Dump Scheme Involving California-Based Microcap Company, September 18, 2014 (Litigation
Release No. 23087)
Charges
were filed against eight individuals cooperating in what the SEC alleges is a
“pump-and-dump scheme involving a penny stock company…that has repeatedly
changed its name and purported line of business over the past several years.” The
SEC named Izak Zirk de Maison and Angelique de Maison as the key organizers of
the scheme, and obtained an emergency court order to freeze the de Maison's
assets, as well as the assets of the other six individuals that the de Maisons
brought into the enterprise. The SEC’s investigation is slated to continue in conjunction
with investigations by the US Attorney’s Office for the Northern District of
Ohio, the FBI’s Cleveland Division and FINRA. The US Attorney and the FBI
announced criminal charges against Zirk de Maison on September 18 as well.
SEC
Charges It Employee At Law Firm with Insider Trading Ahead of Merger
Announcements, September 18, 2014 (Litigation Release No. 23086)
Insider trading charges were filed against Dimitry
Braverman, a senior IT worker at Wilson Sonsini Goodrich & Rosati.
According to the SEC, Braverman “had access to nonpublic information in the
firm's client-related databases and garnered more than $300,000 in illicit
profits by trading in advance of merger announcements.” The US Attorney’s
Office for the Southern District of New York announced parallel criminal charges
against Braverman. The SEC investigation will continue in conjunction with the
US Attorney, the FBI, FINRA and Options Regulatory Surveillance Authority.
SEC
Obtains Asset Freeze Against Company in Turks and Caicos Islands Behind South
Florida-Based Ponzi Scheme, September 16, 2014 (Litigation Release No. 23085)
The SEC obtained an emergency asset freeze against
Abatement Corp. Holding Company Limited, a company based in Turks and Caicos
Islands. The SEC alleges that Abatement Corp. and its late principal Joseph
Laurer “falsely promised investors safe, guaranteed returns while engaging in
an offering fraud and Ponzi scheme from November 2004 until Laurer's death on May
15, 2014.” The SEC also named Laurer’s widow Brenda Davis and International Balanced
Fund, another company run by Laurer, as relief defendants, due to their receipt
of investor funds. Allegations include the complaint that Abatement Corp. defrauded
about 50 investors in South Florida of more than $4.6 million. The SEC is in
the process of litigation, and is working with FINRA as well as the Turks and
Caicos Islands Financial Services Commission.
Court
Orders Joseph D. Stilwell to Testify in Response to SEC Investigative Subpoena,
September 16, 2014 (Litigation Release No. 23084)
After
filing an application to enforce its investigative subpoena on August 13, the
SEC announced that the US District Court for the Southern District of New York
had entered an order requiring Joseph D. Stilwell to testify. The SEC is
investigating whether Stilwell’s company, Stilwell Value, LLC, violated
anti-fraud securities laws. The Commission is still in the process of
conducting a fact-finding inquiry and has not made any allegations of
misconduct thus far.
SEC
Charges Ddbo Consulting, Inc., Calpacific Equity Group, LLC, and Principals
with Fraud and Registration Violations, September 18, 2014 (Litigation Release No. 23083)
Civil actions were filed in the US District Court “against
individuals and companies behind a boiler room scheme that hyped a company
whose new technology was purportedly to be used in the Super Bowl.” This action
followed a previous SEC charge against the operators of the scheme, which
revolved around pressuring investors to purchase stock in Thought Development
Inc. (TDI). The four executives in question, who operate DDBO Consulting, Inc.,
DBBG Consulting, Inc. and CalPacific Equity Group, LLC, promised investors that
TDI’s initial public offering was imminent, although this did not turn out to
be the case. More than 110 investors purchased about $1.7 million in TDI
shares. In addition to charging the companies, the SEC charged Dean R. Baker, Daniel
R. Baker, Bret A. Grove and Demosthenes Dristas, all of whom agreed to settle. The
US Attorney’s Office for the Central District of California has announced
criminal charges against Daniel Baker and Demosthenes Dristas.
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