On November 29, 2018, the SEC determined to accept the Offer of Settlement which was submitted by Ricardo Goldman.
A resident of Miami, Florida,Ricardo Goldman was a broker with an unregistered broker-dealer, American Capital Group. From at least November 2010 to August 2015, Ricardo Goldman solicited securities traders through day trading seminars he taught, as well as by offering day trading software and services. Ricardo Goldman established and maintained sub-accounts for traders under a U.S. brokerage account belonging to America Capital Group LTD held at Letsgotrade, Inc., a registered broker-dealer based in Puerto Rico. Ricardo Goldman received transactions based compensation in the form of commissions. Neither American Capital Group nor America Capital Group LTD has ever registered with the SEC in any capacity.
On November 8, 2018, a final judgment was entered by consent against Ricardo Goldman, permanently enjoining him from future violations of Sections 10(b), 15(a)(1), and 15(b)(6)(B) of the Exchange Act and Rule 10b-5. Read More
On November 9, 2018, the Honorable Nicholas G. Garaufis of the United States District Court for the Eastern District of New York entered a final judgment against defendant Steven Newman. The final judgment imposes on Newman a permanent injunction against future violations of certain antifraud provisions of the federal securities laws and bars Newman from serving as an officer and director of a public company.
The SEC’s complaint, filed on October 19, 2007 and amended on March 23, 2015, alleged, among other things, that Steven Newman and other officers and directors of Xybernaut Corp., signed registration statements for private investment in public equity transactions (PIPE transactions) that were all false and misleading because those registration statements named nominee entities and nominee directors as the control persons and concealed the identify of an investor group that controlled large blocks of Xybernaut’s shares. Read More
SEC Charges Four in Fraudulent Microcap Manipulation Scheme Orchestrated Through International Account
The SEC charged Morrie Tobin and three other individuals for their roles in a scheme to profit from the manipulation and illegal sale of stock of two publicly traded companies, Environmental Packaging Technologies Holdings, Inc. and CURE Pharmaceutical Holding Corp.
According to the SEC’s complaint, Morrie Tobin, a California resident, worked with co-defendants Milan Patel, Matthew Ledvina, and Daniel Lacher to facilitate Morrie Tobin’s scheme. Milan Patel and Matthew Ledvina, attorneys at an international tax law firm, and Matthew Lacher, a resident of Switzerland, allegedly hid Morrie Tobin’s ownership and control over the companies by using offshore entitites to hold his stock and by establishing accounts to sell that stock at Wintercap SA, a Swiss-based company run by U.K. citizen Roger Knox. On October 2, 2018, the SEC filed an emergency action and obtained an asset freeze against Roger Knox and Wintercap, charging them with a scheme that generated more than $165 million of illegal sales of stock in at least 50 microcap companies. Read More
Imagine you were a businessman whose company operated in New York and London, and whose stock traded on the AIM, the London Stock Exchange’s venture market. One day in 2006, your New York offices are raided by the FBI. Though no arrests or indictments are immediately forthcoming, you’re extremely concerned, and realize you need the advice of a criminal attorney. You ask your company compliance attorney for help, and he suggests an experienced criminal defender. You hire him immediately.
In July 2009, you’re arrested by the FBI and charged with violating the Securities Act of 1934. A superseding indictment adding additional charges is eventually filed, and the case is assigned to Judge Paul Crotty of the Federal District Court for the Southern District of New York. In the midst of pretrial preparations, your attorney asks the judge to allow him to withdraw from the case, saying you haven’t paid him all you owe. At your own request, the judge insists the lawyer continue to represent you. The trial goes forward and in the end, you lose. Read More
On November 5, 2018, a U.S. District Court for the Central District of California entered a final judgment on consent against immigration attorney, Steve Qi, and his law firm who were charged with violations in connection with the EB-5 Immigrant Investor Program.
The SEC’s complaint, filed December 8, 2017, alleged that Steve Qi and his law firm acted as unregistered brokers in connection with sales of EB-5 investments and defrauded their investor clients by not fully disclosing their receipt of transaction-based compensation. After the Court denied Defendants’ motion to dismiss the complaint, the parties engaged in Court-ordered mediation that resulted in resolution of the case by consent. Read More
The former CEO and CFO of a now-defunct Dallas and New Orleans-based disaster remediation and construction business, Home Solutions of America, Inc have agreed to pay disgorgement and penalties to settle accounting fraud charges brought by the SEC. In addition, the SEC has asked the Court to convert the injunctive relief previously ordered against the company, Home Solutions of America, Inc. into a final judgment.
The SEC charged Home Solutions of America, Inc, its former CEO, Frank Fradella, and its former CFO, Jeffrey Mattich, four other former executives, and a business partner in 2009 with fraud for lying about non-existent business deals in the 2005-2008 time period and inflating the company’s revenues and stock price. To settle the SEC’s charges, Frank Fradella agreed to pay $1 million in disgorgement, a lifetime bar from serving as an officer or director of a public company, and to be permanently prohibited from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, the books-and-records provisions of Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2, and the certification provision of Rule 13a-14 of the Exchange Act. In addition, he agreed to be permanently prohibited from aiding and abetting violations of the reporting provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 and the books-and-records provisions of Sections 13(b)(2)(A) and (B) of the Exchange Act.
SEC Announces Resolution of Civil and Criminal Actions Against Former CFO of Information Technology Company
The Securities and Exchange Commission announced on November 15, 2018, the resolution of three actions against the CFO of a Chicago-area information technology company, who was previously charged by the SEC and the U.S. Attorney’s Office. Dhru Desai was ordered, in the SEC’s civil action, to pay approximately $1.63 million in disgorgement, prejudgment interest, and a civil penalty; suspended by the Commission from practicing before the Commission on the basis of his guilty plea in the parallel criminal action; and sentenced to 39 months in prison in the criminal action.
The SEC’s complaint, filed on June 29, 2017 in the U.S. District Court for the Northern District of Illinois, alleged that former chief executive officer Nandu Thondavadi and former chief financial officer Dhru Desai stole more than $4 million from Schaumburg, Illinois-based Quadrant 4 System Corp., for a nearly five-year period. The former executives also allegedly caused Quadrant 4 System to understate its liabilities and inflate its revenues and assets, evading scrutiny by lying to the company’s auditors and providing them with forged and doctored documents. Read More
On January 31, 2018, the Commission filed a complaint in the United States District Court for the District of Massachusetts charging Cornelius Peterson and his former colleague, James Polese, with securities fraud for engaging in various schemes to defraud their clients, including fraudulently misappropriating $350,000 of their client’s money, using $100,000 of those funds to make investments in their own names, and directing the remaining $250,000 to James Polese’s personal bank account and investing $100,000 of another client’s funds into an investment in which Cornelius Peterson and James Polese held a financial interest, without informing the client or disclosing their conflict of interest. Read More
The SEC announced on November 14, 2018, that it has agreed to resolve its insider trading claims against James Mazzo, the former Chairman and Chief Executive Officer of Advanced Medical Optics, Inc.for allegedly tipping information about his company’s acquisition to his close personal friend, former professional baseball player Douglas V. DeCinces.
The SEC’s complaint alleged that in October 2008 James Mazzo executed a nondisclosure agreement with Abbott Laboratories, Inc., as Abbott explored a potential acquisition of Advanced Medical Optics. Talks between Advanced Medical Optics and Abbott Laboratories progressed over the ensuing months. James Mazzo provided Douglas DeCinces with material, nonpublic information about the acquisition on multiple occasions. The complaint further alleges that Douglas DeCinces bought between Advanced Medical Optics securities numerous times after communicating with James Mazzo about the progress of the merger talks. Douglas DeCinces also allegedly tipped five of his friends, including a former Baltimore Orioles teammate and a businessman, David L. Parker. Douglas DeCinces’s trading resulted in over $1.3 million in alleged ill-gotten gains, and the tippees obtained another $1 million in ill-gotten gains. Read More
SEC Charges Mark Burnett, Jeffrey Miller, Christian Romandetti, Frank Sarro, Anthony Vassallo, and Elite Stock Research
On November 15, 2018, the Securities and Exchange Commission (“SEC”) brought charges against a Long Island, New York-based boiler room previously sued for defrauding elderly and unsophisticated investors. The charges allege that First Choice Healthcare Solutions Inc. CEO Christian Romandetti, the boiler room, and four others, manipulated the company’s shares generating more than $3.3 million of illegal profits and more than $560,000 in kickbacks for Christian Romandetti.
The SEC’s complaint alleges that Christian Romandetti, Mark Burnett, Jeffrey Miller, Frank Sarro, Anthony Vassallo, and Elite Stock Research duped more than 100 victims in a scheme that inflated First Choice’s stock price from less than $1 per share to $3.40 per share. According to the complaint, from at least September 2013 until about June 2016, the defendants used multiple accounts in an attempt to disguise their trading, engaged in manipulative trading practices, and hired Elite Stock Research, a boiler room run by defendant Anthony Vassallo, to promote First Choice to vulnerable investors, some of who invested retirement savings. Read More