Complying with Rule 6490’s requirements may entail an unanticipated legal and compliance cost for issuers and their securities attorneys, who may be unfamiliar with FINRA’s authority under 10b-17. Additionally, many OTC Markets issuers are not prepared for the Depository Trust Company (“DTC”) review that may be prompted by the issuer’s corporate action not…
Read MoreFINRA & Penny Stocks When the subject of penny stock enforcement actions arises, most people think first of the Securities and Exchange Commission (SEC), or erroneously, of OTC Markets Group (OTCM). The SEC has ultimate authority to deal with violations of the securities laws. It has jurisdiction of penny stocks that are SEC registrants that trade [&hel…
Read MoreOn May 16th, 2018, the Securities and Exchange Commission (“SEC”) charged three former executives for Constellation Healthcare Technologies Inc. (Constellation), a Houston- based company, who falsified financial and other information they provided to a private firm while negotiating the private firm’s acquisition of a majority stake in Constellation. A littl…
Read MoreOn September 29, 2017, the Securities and Exchange Commission charged Shane Fleming, a middleman tipper, and six traders with insider trading ahead of the announcement that the company would be purchased and taken private. In a complaint filed in U.S. District Court in the Northern District of Illinois, the SEC alleges that Shane Fleming a […]
Read MoreOn March 29, 2018, a federal district court in Connecticut granted the SEC’s motion for summary judgment as to the liability of Iftikar Ahmed alleged to have fraudulently diverted money from the venture capital funds he advised. The SEC’s action alleges that Iftikar Ahmed, formerly a general partner at a venture capital firm with offices [&hellip…
Read MoreOn March 19th the Securities and Exchange Commission announced that Electronic Transaction Clearing (ETC), a registered broker-dealer headquartered in Los Angeles, has agreed to settle charges that it illegally placed more than $25 million of customers’ securities at risk in order to fund its own operations. Among other things, the SEC found that ETC violate…
Read MoreOn March 13th the Securities and Exchange Commission charged foreign affiliates of KPMG, Deloitte & Touche, and BDO for their involvement in audit work that circumvented the full oversight of the Public Company Accounting Oversight Board (PCAOB). The firms agreed to settle the charges by paying penalties or disgorging their profits from the audits. Accor…
Read MoreOn March 14th the Securities and Exchange Commission charged Jun Ying, a former chief information officer of a U.S. business unit of Equifax with insider trading in advance of the company’s September 2017 announcement about a massive data breach that exposed the social security numbers as well as other personal information of about 148 million […]
Read MoreOn September 21, 2017, the Securities and Exchange Commission (“SEC”) obtained an order requiring the Woodbridge Group of Companies LLC, of Sherman Oaks, California, to produce the corporate documents of several company executives and employees, including the President and CEO. According to the SEC’s application and supporting papers filed…
Read MoreOn September 13, 2017, the Securities and Exchange Commission (“SEC”) announced that Mayank Gupta, a former auditor, has agreed to settle charges that he tipped his relative with inside information about a client on the verge of a merger. The SEC’s complaint alleges that, through his audit work at PricewaterhouseCoopers LLP, Mayank Gupta le…
Read MoreOn August 16, 2017, the Securities and Exchange Commission (“SEC”) announced that Vergeous LLC and Dream Team Partners LLC, two Florida-based video game development companies, and their principal have agreed to pay approximately $293,000 for misleading investors in video game projects. According to the SEC’s complaint, through a series of u…
Read MoreOn June 7, 2017, the Securities and Exchange Commission (“SEC”) announced fraud charges against Michael Trahan for insider trading in the securities of The Shaw Group, Inc. (Shaw), a Louisiana-based energy construction company, ahead of a public announcement that Shaw was going to be acquired by Chicago Bridge & Iron Company N.V. (CBI). The S…
Read MoreOn June 30, 2017, the Securities and Exchange Commission (“SEC”) announced that the Honorable Jacqueline Scott Corley, U.S. Magistrate Judge for the Northern District of California, entered a final judgment as to Sasan Sabrdaran, the former director of drug safety risk management at Brisbane, California-based InterMune, Inc., and his long-time fr…
Read MoreOn April 5, 2017, the Securities and Exchange Commission (“SEC”) announced that Lawson Financial Corporation, an Arizona-based brokerage firm, its CEO, and its former underwriter’s counsel have agreed to settle charges related to municipal bond offerings they were underwriting that turned out to be fraudulent. The SEC’s order finds that Lawson Fi…
Read MoreOn March 3, 2017, the Securities and Exchange Commission (“SEC”) announced that Mexico-based homebuilding company Desarrolladora Homex S.A.B. de C.V. has agreed to settle charges that it reported fake sales of more than 100,000 homes to boost revenues in its financial statements during a three-year period. The SEC used satellite imagery to help u…
Read MoreOn April 24, 2017, the Securities and Exchange Commission (“SEC”) deemed it necessary and appropriate for the protection of investors that public administrative proceedings be, and hereby are, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”) against Axesstel, Inc. After an investigation, the Division of Enforcement…
Read MoreJay Hatton (CRD #1725472, Edinburgh, Indiana) submitted an Offer of Settlement in which he was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any capacity for two years. Without admitting or denying the allegations, Jay Hatton consented to the sanctions and to the entry of findings that he […]
Read MoreGuy Gentile Gets Good News On January 30, 2017, brokerage firm owner Guy Gentile got the good news he’d been hoping for: Judge Jose Linares of the United States District Court for the District of New Jersey had dismissed the indictment filed against him by the Department of Justice. For Gentile, the judge’s order brings […]
Read MoreOn January 11, 2017, the U.S. District Court for the Eastern District of New York entered a final judgment against defendant Gregg R. Mulholland, a penny stock promoter charged in an SEC action with illegally selling more than 83 million penny stock shares that he allegedly held in the names of at least 10 different […]
Read MorePosted by Brenda Hamilton One December 29, 2016, the Securities and Exchange Commission announced that Kentucky-based General Cable Corporation agreed to pay more than $75 million to resolve parallel SEC and U.S. Department of Justice investigations related to its violations of the Foreign Corrupt Practices Act (FCPA). The company agreed to pay an additional…
Read MoreOn November 18, 2016, Stanley Jonathan Fortenberry (a/k/a S.J., John, or Johnny Fortenberry) of San Angelo, Texas, pleaded guilty to an indictment charging him with obstruction of justice and other charges in connection with two investment companies he ran that defrauded investors out of approximately $900,000 over a four-year period. On April 28, 2014, the…
Read MoreOn October 17, 2016 the Securities and Exchange Commission (“SEC”) charged Lime Energy Co., an energy services provider and four of its executives for their roles in an accounting fraud in which the company recognized revenue earlier than allowed in order to meet internal targets. Lime Energy areed to pay $1 million to settle the charges, [&helli…
Read MoreThe Securities and Exchange Commission (“SEC”) today charged the former senior director of regulatory affairs for Puma Biotechnology with insider trading ahead of the company’s news announcements about a drug to treat breast cancer. The SEC alleges that Robert Gadimian pocketed more than $1.1 million in illicit profits by secretly purchasin…
Read MoreOn September 9, 2016 the Securities and Exchange Commission (“SEC”) charged Ohio-based chemical company RPM International Inc. and its General Counsel, Edward Moore, with failing to disclose a material loss contingency, or record an accrual for, a government investigation when required to do so under governing accounting principles and securities…
Read MoreStockbroker Guy Gentile was flying high as 2012 began. In January, he gave an interview to the Nassau Guardian in which he predicted wild success for his new Bahamas brokerage, SureTrader, a division of Swiss America Securities, Ltd., a firm regulated by the Securities Commission of the Bahamas. Gentile told the paper he expected SureTrader […]
Read MoreOn August 26, 2016, the U.S. District Court for the Central District of California entered a final judgment against Jilbert Tahmazian, an attorney licensed in California, ordering him to pay $196,524 to settle an antifraud action filed by the SEC. The SEC’s complaint alleged that, from at least mid-2009 through at least December 2010, Tahmazian [&helli…
Read MoreMany penny stocks have bad histories, or are associated with questionable players. Only last December, convicted felon Edward Durante was civilly and criminally charged in a securities fraud and manipulation scheme he’d embarked upon immediately after leaving prison in 2009. He managed to escape detection for years by using a number of aliases and va…
Read MoreOn March 24, 2016, the Securities and Exchange Commission charged two brothers, and a company that they founded purportedly to develop and sell real estate, with engaging in a $2.7 million Ponzi scheme that targeted approximately 30, largely elderly and unsophisticated investors over a six-year period. According to the SEC’s complaint, filed in…
Read MoreOn March 11, 2016 the Securities and Exchange Commission (SEC) announced fraud charges against California businessman Daniel Nase, accusing him of stealing investor assets and then trying to cover it up once the SEC caught onto his scheme. The SEC alleges that Nase, through his real estate company BIC Real Estate Development Corporation, stole [&helli…
Read MoreOn March 4, 2016, the Honorable James C. Mahan, United States District Judge for the District of Nevada, entered an order denying a motion for reconsideration of the final judgment filed by relief defendants June Fujinaga and her trust, The Yunju Trust. In so ruling, the court rejected Mrs. Fujinaga’s and the trust’s argument that […]
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