SEC Announces Michael Randles Administrative Proceedings

Michael Randles - Administrative Proceedings

On June 19, 2017, the Securities and Exchange Commission (“Commission”) deemed it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Michael Randles.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, Respondent admits the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in a paragraph below, and consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below. On the basis of this Order and Respondent’s Offer, the Commission finds that:

1. Respondent was an employee at Moneyline Brokers (“Moneyline”), an offshore brokerage company located in San Jose, Costa Rica, which was not registered as a broker-dealer with the Commission. Randles, 49 years old, is a Canadian citizen who resided in Costa Rica.

2. On October 21, 2016, Randles pled guilty to one count of money laundering conspiracy in violation of Title 18 United States Code, Section 371, before the United States District Court for the Eastern District of Virginia, in United States of America v. Michael Randles, Crim. No. 1:15-CR-178-2-AJT. On January 25, 2017, a judgment in the criminal case was entered against Michael Randles. He was sentenced to be imprisoned for a term of forty-eight months followed by three years of supervised release. The United States of America obtained a money judgment against Michael Randles to forfeit, jointly and severally with codefendants in the criminal case, $992,077.58, which constitutes proceeds or property involved in the offense.

3. In connection with that plea, Respondent admitted that:

(a) Respondent, along with another individual, controlled and operated Moneyline. At all times since Moneyline was founded, Michael Randles and the other individual received equal shares of the profits of Moneyline. Respondent managed Moneyline’s office in Costa Rica and exercised authority over Moneyline’s banking and financial transactions.

(b) The purpose of Moneyline was to trade securities, primarily microcap or “penny stocks,” through multiple nominee brokerage accounts in the United States. Randles opened or caused the opening of Moneyline brokerage and bank accounts, including those in the United States. The accounts were used in part to conceal the true source, ownership and control of shares and the proceeds of the liquidation of shares.

(c) Beginning at least as early as in or about 2008, Michael Randles, along with others, conspired to transport, transmit and transfer securities and funds to conceal and disguise the ownership and control of the proceeds of securities fraud, namely, “pump and dump” activities involving microcap shares, through a series of nominee brokerage and bank accounts. Randles and others deliberately sought to circumvent U.S. securities laws and evade regulatory authorities.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Randles’s Offer.

Accordingly, it is hereby ORDERED pursuant to Section 15(b)(6) of the Exchange Act that Respondent Michael Randles be, and hereby is barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and

Pursuant to Section 15(b)(6) of the Exchange Act, Respondent Randles be, and hereby is barred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.

Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, or [email protected].  This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855