Securities and Going Public Blog

Court Enters Partial Judgment Against James Louks and FiberPop Solutions

James Louks and FiberPop SolutionsOn November 9, 2015, the Securities and Exchange Commission (SEC) announced that on November 4, 2015 the Court entered a partial judgment against James Louks and FiberPop Solutions, Inc. (FiberPop).

FiberPop and Louks, founder, President, CEO, Director, and Chairman of the Board of FiberPoP, both consented to the entry of the partial judgment, which imposes a permanent injunction against future violations of certain antifraud provisions of the federal securities laws. The Defendants are prohibited from raising investor capital while the SEC’s case is ongoing. They neither admitted nor denied the SEC’s allegations against them. Read More

SEC Identifies Three More to Charge in Penny Stock Case


Penny StockOn November 4, 2015, the Securities and Exchange Commission (SEC) announced it has identified three more individuals to charge in a penny stock manipulation case that the agency filed last year against alleged corrupt brokers and others.

The SEC filed a request to lift the stay in its civil action so that it could file an amended penny stock complaint alleging that two additional brokers, Michael Morris and Ronald Heineman, assisted in the scheme through their brokerage firm while a third man, attorney Darren Ofsink, made illicit gains by selling unregistered shares that had no registration exemption applied.

In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York announced criminal charges against Morris and Ofsink. Read More

Court Approves Insurance Company’s Final Distribution

Corporate Hijacking AttorneysOn September 30, 2015 the Court approved final distribution that concluded the receivership in the SEC’s litigation against Provident Capital Indemnity, Ltd. The litigation was ended by the Court’s order and was settled with the last remaining defendant, Minor Vargas Calvo, PCI’s former president, following his conviction in a parallel case. The receiver that was appointed by the Court has distributed about $2.3 million to approximately 2,000 victims of life settlement offerings supposedly bonded by PCI. Any amount that remains after payment of fees and expenses will be paid to the US Marshall for the payment of PCI’s asset forfeiture obligation in the parallel criminal case.

The SEC’s case was initiated on January 19, 2011, when the SEC charged PCI, Vargas, and PCI’s purported outside auditor Jorge Castillo (Castillo) with operating a massive life settlement bonding fraud. The complaint states that PCI provided financial guarantee bonds on life insurance policies, which intermediaries then packaged and sold as bonded life settlement investments across the U.S. and abroad. From at least 2004 through March 2010, PCI issued about 197 bonds with a face value of more than $670 million. The SEC claimed that PCI, Vargas, and Castillo misrepresented PCI’s ability to satisfy its obligations under its bonds. They fabricated material misrepresentations about the assets that backed PCI’s bonds, PCI’s credit rating, the availability of reinsurance to cover claims on PCI’s bonds, and whether PCI’s financial statements had been audited. The SEC’s civil injunctive action coincided with Vargas’s and Castillo’s arrests in the parallel criminal case. The SEC also named Desarrollos Comerciales Ronim, S.A. (“Desarrollos”), PCI’s managing agent, as a relief defendant.

The SEC acquired a temporary restraining order, and the Court appointed Richard Roper, employed at Thomas and Knight Law Firm, as receiver for PCI.

A series of consistent judgments resolved the SEC’s case. These judgments were entered by the Court on the following dates: Castillo, April 6, 2012; PCI, July 10, 2012; and Vargas, September 27, 2012. Each of the defendants was permanently enjoined from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. PCI, Vargas and Relief Defendant Desarrollos (July 10, 2012) were ordered to pay disgorgement of $43,582,699 jointly and severally, with the disgorgement amount subject to reductions based on amounts paid in the parallel criminal case. PCI was also ordered to pay prejudgment interest, and a civil penalty of $13,780,000. The PCI and Vargas settlements were among the earliest settlements obtained by the SEC with admissions.

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, by email at or visit 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 and compliance 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.
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Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
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Vlad Spivnak Charged with Insider Trading

Rule 506 AttorneysThe SEC announced on November 2, 2015 that it has charged Vlad Spivnak with insider trading in the stock of American Dental Partners, Inc. (ADPI), a dental practice management company.

The complaint alleges that Spivnak received the private information from his girlfriend at the time, Shirmila Doddi, who was a financial analyst at a commercial bank. After acquiring the confidential information from Doddi, Spivnak is alleged to have traded in the securities of ADPI, based on the tips provided by Doddi. The SEC claims that Doddi obtained the material, private information throughout her employment regarding an impending acquisition of ADPI by a private equity firm. Read More

William Apostelos and His Companies Charged with Fraud

Securities Attorneys -Fraudulent OfferingsThe SEC released charges on October 30, 2015 alleging that William Apostelos and his companies, WMA Enterprises, Midwest Green Resources, and OVO Wealth Management conducted a fraudulent investment scheme. The complaint claims that the companies raised at least $66.7 million from about 350 investors since January of 2010.

The SEC claims that throughout the scheme, Apostelos knowingly made multiple misrepresentations to recruit prospective investors, including clients of OVO, a state-registered investment adviser.  Apostelos told certain investors that their investment funds would be pooled with funds from other investors and invested in stock, precious metals, real estate, or used to make short-term loans at high interest rates to small businesses and farmers, with returns being generated by the underlying investments.  He told other investors that he would place their funds in a pooled brokerage account and invest them in publicly traded stocks, bonds, and options. Read More

Diverse Financial and Principals Charged with Fraud

Bank Analyst Charged With Insider TradingThe SEC filed fraud charges against Diverse Financial Corporation, its CEO, Roy Dekel, and its former President David Kendell on October 28, 2015. The complaint claims that the defendants raised about $3.29 million from at least 16 investors through their fraudulent offer and promissory notes that were issued by DF Capital Partners, LLC, which is a bankrupt subsidiary of Diverse Financial. According to the complaint, the defendants lied about their use of the investors funds, saying that their funds would be used only to invest in premium finance lending, where loans are made to borrowers to pay premiums on their life insurance policies, or “short-term cash type investments,” pending such investments. In reality, alleged by the SEC, the company and its CEO diverted the money to pay for the company’s financial operations.  Read More

SEC Obtains Asset Freeze Over Joseph Gabalon

Registration Statements - Securities Lawyer 101The Securities and Exchange Commission (SEC) filed a civil action against defendants Ascenergy LLC and its CEO, Joseph Gabaldon for offering fraudulent oil and gas investments. At the request of the SEC, the U.S. District Court for the District of Nevada has entered a temporary restraining order halting the offering, as well as an order for an asset freeze for the defendants and the relief defendants, Alanah Energy, LLC and Pyckl, LLC.

The SEC’s complaint claims that since at least 2014, the defendants have been involved in a scheme on crowdfunding websites and the company’s website to solicit investors to buy overriding royalty interests in undeveloped oil and gas wells. According to the complaint, Ascenergy has accumulated about $5 million from approximately 90 investors. Ascenergy has already spent at least $1.2 million of the offering proceeds, but it seems that only a few thousand dollars of the proceeds have been used for expenses relative to oil and gas. Read More

Rebecca Norton Insider Trading Settlement Approved

Securities FraudThe Securities and Exchange Commission (SEC) announced that, on October 27, 2015, the United States District Court for the District of Arizona entered a settled final judgment against Rebecca Norton, the remaining defendant in SEC v. Mary Beth Knight and Rebecca Norton, Civ. 2:11-cv-00973 (DGC) (D. Ariz.). Norton agreed to entry of the final judgment, without admitting or denying the SEC’s claims in that action. The SEC’s complaint claimed that in 2006, Norton was involved in insider trading in the securities of Choice Hotels International, Inc. Read More

Brown Investment Advisors Charged with Operating Three Offering Frauds

Insider TradingA settled civil injunctive action was filed by the Securities and Exchange Commission (SEC) against two Pennsylvania investment advisers, Kevin Brown and his father, George Brown, (collectively, the “Browns”), and several entities they managed, for conducting three offering frauds over the last decade. The unregistered offerings were in correlation with securities that were issued by a Nevada-chartered trust company, Summit Trust Company (“STC”), the Rampart Fund LP (“Rampart Fund”), a private fund managed by the Browns, and Trust Counselors Network, Inc. (“TCN”), a non-profit charitable organization.

The SEC alleges that between 2008 and 2014, the Browns accumulated over $33 million from over 150 investors in multiple states through the offering of STC’s preferred stock while insinuating that the proceeds would be used for business expansion and acquisitions. Instead, STC and the Browns allegedly used most of the proceeds to make Ponzi-like payments to existing preferred stock shareholders, to pay for obligations and expenses of the Browns’ other affiliated entities, and for undisclosed speculative investments. Read More