Enforcement Actions: Week in Review - September 26th, 2014
(Sep 2014)
SEC ENFORCEMENT ACTIONS
Court Enters Final Judgments Against CEO and Executive Vice President of Company Involved in Pump-And-Dump Scheme Involving Fictitious Buyout Offer
September 25, 2014 (Litigation Release No. 23092)
The SEC announced that the US District Court for the District of Massachusetts entered final judgments against Maximilien Arella, CEO, and Ian Morrice, the Executive Vice President, both of Spencer Pharmaceutical Inc. (a microcap pharmaceutical company). Permanent...
Enforcement Actions: Week in Review - September 19th, 2014
(Sep 2014)
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...
FINRA Enforcement Actions: Month in Review
(Jun 2014)
MAY 2014 SELECTED FINRA ENFORCEMENT ACTIONS
FIRMS FINED
ABN AMRO Clearing Chicago LLC (CRD #14020, Chicago, Illinois)
ABN AMRO Clearing Chicago LLC consented to a censure and $95,000 fine for allegedly failing "to report short interest positions to the New York Stock Exchange and FINRA on certain settlement dates, and submitt[ing] to FINRA an inaccurate short-interest position report." FINRA found that the firm's supervisory system did not provide for supervision reasonably designed to achieve...
FINRA Enforcement Actions: Month in Review
(May 2014)
APRIL 2014 SELECTED FINRA ENFORCEMENT ACTIONS
FIRMS FINED
The Huntington Investment Company (CRD #16986, Columbus, Ohio)
The Huntington Investment Company consented to a $25,000 fine and censure. The firm consented to an entry of "findings that it failed to provide notice to the MSRB via the Electronic Municipal Market Access System (EMMA) that no preliminary official statements or official statements were to be prepared for bond anticipation note offerings in which the firm participated."...
Enforcement Actions: Week in Review - May 16th, 2014
(May 2014)
SEC ENFORCEMENT ACTIONS
SEC Charges Unregistered Securities Salesman for Selling Millions of Dollars in Oil-And-Gas Investments
May 15, 2014, (Litigation Release No. 22993)
According to the complaint, Behrooz Sarafraz "acted as the primary salesman on behalf of TVC Opus I Drilling Program LP and Tri-Valley Corporation" and received over $16 million in sales commissions while failing to be registered with the SEC as a broker-dealer. Sarafraz has agreed to a final judgment that enjoins...
Enforcement Actions: Week in Review - May 2nd, 2014
(May 2014)
SEC ENFORCEMENT ACTIONS
SEC Charges Barry R. Bekkedam with Defrauding Investment Advisory Clients in Connection with Multimillion Dollar Rothstein Ponzi Scheme
April 30, 2014, (Litigation Release No. 22983)
According to the complaint, Barry R. Bekkedam, former SEC-registered investment advisor and former owner, Chairman, and Chief Executive Officer of Ballamor Capital Management, LLC, "fraudulently induced, or assisted in inducing, his advisory clients and others to invest approximately...
This is How We Determined Investors Lost $27.7 Billion Investing in Non-Traded REITs
(Apr 2014)
Earlier this week we posted the summary results of our investigation into the performance of 27 non-traded REITs which had had a liquidity event by December 31, 2013. We found that investors are $27.7 billion worse as a result of investing in these 27 REITs rather than investing in a diversified portfolio of traded REITs. The post titled "Retail Investors Have Lost at Least $27.7 billion as a Result of Non-Traded REITs" is available on our blog.
Figuring out this $27.7 billion shortfall...
Enforcement Actions: Week in Review - April 11th, 2014
(Apr 2014)
SEC ENFORCEMENT ACTIONS
SEC Charges Carter's, Inc.'s Former Vice-President of Operations with Insider Trading and Tipping
April 10, 2014, (Litigation Release No. 22970)
Richard T. Posey,former Vice-President of Carter's, Inc., has been charged with trading "based on inside information that he possessed as a result of his position at Carter's, and...tip[ping] material nonpublic information to the company's former Vice-President and Director of Investor Relations, Eric M. Martin." Posey...
Enforcement Actions: Week in Review - March 28th, 2014
(Mar 2014)
SEC ENFORCEMENT ACTIONS
SEC Obtains Order Enforcing Compliance with Order to Pay Over $5 Million in Disgorgement, Prejudgment Interest, and Civil Penalties
March 26, 2014, (Litigation Release No. 22952)
An opinion and order were entered this week "directing Walter Gerasimowicz, Meditron Asset Management, LLC, and Meditron Management Group, LLC to comply with the SEC order requiring them to pay $3,143,029.41 in disgorgement and pre-judgment interest, and a civil penalty of...
BlueVault Partners' Non-Traded REIT Study: Even the Winners do Worse Than Traded REITs
(Mar 2014)
We have noted in our research and our posts that non-traded investments including non-traded real estate investment trusts (REITs), business development companies (BDCs), oil & gas and equipment leasing partnerships typically have extremely high upfront and ongoing fees. Because of these high costs, illiquidity, lack of transparency and conflicts of interest, these investments should underperform liquid, lower-cost traded investments with similar underlying exposures. For example, non-traded...
