On April 18, 2019, the SEC charged Kimberly Sredich, a Michigan resident, with misappropriating funds from brokerage customers of a registered broker-dealer with which she was associated. The SEC’s complaint alleges that between 2014 and 2018, Kimberly Sredich sold securities in at least 15 customer accounts and misappropriated the proceeds of the sale…
Read MoreOverview of the Regulation A Exemption The Regulation A offering exemption provides investors with more investment choices and issuers with more capital raising options during their going public transactions. Regulation A is mandated by Title IV of the Jumpstart Our Business Startups (JOBS) Act. The Regulation A exemption provides for two distinct offering…
Read MoreThe SEC announced on April 18,2019, the filing of insider trading charges against Yuh-Yue Chen, a former engineer at Skyworks Solutions, Inc., a Massachusetts-based company with executive offices and a design center in Irvine, California that designs, manufactures and sells wireless analog semiconductors. The SEC’s complaint alleges that Yuh-Yue Chen…
Read MoreOn April 11, 2019, two federal court judges entered final judgments against Joseph Meli, a New York City man, and six of his companies, in connection with two SEC cases that charged Joseph Meli with operating multi-million dollar fraudulent schemes involving purported purchases and resales of tickets to popular concerts and Broadway shows. Joseph Meli [&hell…
Read MoreOn April 11, 2019, the SEC charged two former directors of investments at Woodbridge Group of Companies LLC for their roles in its massive Ponzi scheme. The defendants, California-based Ivan Acevedo and Dane Roseman, were separately arrested and charged by criminal authorities, along with Woodbridge owner Robert H. Shapiro. The SEC previously charged Woodbri…
Read MoreOn April 11, 2019, the SEC charged Arif Naqvi and Abraaj Investment Management Limited, a Dubai-based investment advisory firm, with misappropriating funds from a private equity fund client. The SEC alleges that Arif Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund (“Health Fund”), collecting more than $100 million over t…
Read MoreThe SEC filed a civil injunctive action on April 10,2019, charging a New Jersey resident, Gonzalo Ortiz with defrauding an investor by lying about his trading success, concealing trading losses, and misappropriating funds. The SEC’s complaint, filed in federal court in Brooklyn, alleges that Gonzalo Ortiz, of Hackensack, New Jersey, falsely touted his…
Read MoreOn April 9,2019, the SEC charged fifteen individuals with acting as unregistered brokers or aiding-and-abetting such activity in connection with Intertech Solutions, Inc.’s fraudulent and unregistered securities offerings. The SEC’s complaints allege that Alexander Bevil, Richard Bohnsack, Daniel Broyles, Charles Davis, Michael Duke, Joel Duncan…
Read MoreOn April 10, 2019, the SEC charged Paul Powers, a former senior lawyer at SeaWorld Entertainment Inc with insider trading based on nonpublic information that the company’s revenue would be better than anticipated for the second quarter of 2018. The SEC alleges that Paul Powers had early access to key revenue information as the company’s [&hellip…
Read MoreOn March 28, 2019, the SEC charged Keith Borge, the former controller of a New York-based not-for-profit college with defrauding municipal securities investors by fraudulently concealing the college’s deteriorating finances. According to the SEC’s complaint, in recent years, the College of New Rochelle came under considerable financial stress bec…
Read MoreThe SE announced on April 1, 2019 that it had halted an ongoing investment fraud by Investment Advisor Motty Mizrahi targeting members of the Jewish community, primarily in the Los Angeles, California region. The SEC filed an emergency action in federal court against Motty Mizrahi and MBIG Company, his sole proprietorship, alleging that, since June [&hellip…
Read MoreOn March 22, 2019, the SEC charged registered investment adviser Direct Lending Investments, LLC with a multi-year fraud that resulted in approximately $11 million in over-charges of management and performance fees to its private funds, as well as the inflation of the private funds’ returns. According to the SEC’s complaint, Direct Lending advise…
Read MoreOn March 26, 2019, the Securities and Exchange Commission (SEC) announced settled actions against Reverse Merger Shell Brokers, James K. McKillop, attorney James M. Cassidy, and Cassidy’s firm Tiber Creek Corp. The agency accused both men of acting as unregistered brokers and of failing to file required beneficial ownership forms with Edgar. While that may…
Read MoreOn March 26, 2019 the SEC filed settled charges against recidivist James K. McKillop for acting as an unregistered broker and for failing to timely file required beneficial ownership forms in connection with his position at Tiber Creek Corp. The SEC also separately filed related settled administrative charges against Tiber Creek and Tiber Creek’s presi…
Read MoreOn March 8, 2019, Securities and Exchange Commission (SEC) Chairman Jay Clayton and Brett Redfearn, Director of the agency’s Division of Trading and Markets, spoke at Fordham University’s Gabelli School of Business in New York City. They addressed a variety of topics, but a few points of interest stood out including their discussion of reverse […]
Read MoreThe SEC announced fraud charges and an asset freeze on March 18, 2019, against the operators of a $25 million Ponzi scheme falsely promising high annual returns with minimal to no risk to investors in the Vietnamese community of Orange County, California. The SEC alleges that Kent R.E. Whitney founded The Church for the Healthy Self three […]
Read MoreOn January 2, 2019, a federal district court entered final consent judgments against an Australia-based investment adviser, Goldsky Asset Management, LLC, and its owner, Kenneth Grace, for making false and misleading statements about its business in filings with the Commission and on its website. The SEC’s complaint, filed on September 27, 2018 in the…
Read MoreRule 506(c) is not available to certain bad actors. The bad actor rule prohibits an issuer from relying on the exemption if the issuer or certain other persons are subject to certain “Disqualifying Events”.
Read MoreThe SEC announced on March 12, 2019 that it has charged Texas resident William Neil “Doc” Gallagher-the self-styled “Money Doctor” featured on three Dallas-area radio stations-in an emergency action to shut down a $19.6 million Ponzi scheme targeting elderly investors’ retirement funds. The SEC also charged Gallagher Financial G…
Read MoreThe SEC charged on February 21, 2019, Joseph Frank Vacante, a former employee of a biotech company with insider trading on confidential information regarding the company’s withdrawal of certain products from consideration by the U.S. FDA. Joseph Frank Vacante agreed to pay more than $140,000 to settle the SEC’s charges. According to the SEC̵…
Read MoreOn March 1, 2019, a federal district court entered a final consent judgment against broker, William Gennity who was charged with defrauding customers by making unsuitable and unauthorized trades and churning customers’ accounts that enriched the broker at the customers’ expense. The SEC’s complaint, filed in the Southern District of New Yor…
Read MoreOn February 22,2019 the SEC announced the entry of a final judgment against James Polese, a former investment adviser at a large financial institution who was charged with misappropriating client funds. On January 31, 2018, the Commission filed a complaint in the United States District Court for the District of Massachusetts charging James Polese and [&hell…
Read MoreOn February 20, 2019, the U.S. District Court for the Southern District of Florida entered final judgments on consent against Mathias Francisco Sandoval Herrera and Maria D. Cidre, the former Chief Executive Officer and former Chief Financial Officer, respectively, of the Rest of World operating segment of General Cable Corp. The SEC’s complaint, filed…
Read MoreOn February 15, 2019 the SEC announced charges against four individuals and related businesses for their roles in two microcap frauds and unlawful securities offerings. In sum, the alleged illegal transactions resulted in proceeds of more than $25 million. According to the SEC’s complaint, from approximately December 2012 to June 2013, microcap stock…
Read MoreOn February 15, 2019, Cognizant Technology Solutions Corporation has agreed to pay $25 million to settle charges that it violated the Foreign Corrupt Practices Act, and two of the company’s former executives were charged for their roles in facilitating the payment of millions of dollars in a bribe to an Indian government official. The SEC’s [&hel…
Read MoreOn February 12, 2019, the SEC charged two former high-ranking executives, of an Indiana-based plastics manufacturer with concealing from potential buyers of the manufacturer the fact that the company’s core business model was a sham. According to the SEC’s complaint, Lucent Polymers, Inc. premised its business model on its ability to transform &…
Read MoreThe SEC obtained a final judgment on February 8, 2018, against Niket Shah, a New Jersey resident who was charged last year by the agency with stealing more than $250,000 in a Ponzi scheme in which his friends and coworkers invested. The court’s final judgment follows the court’s grant of summary judgment in the agency’s […]
Read MoreOn January 9, the Cato Institute filed suit against the Securities & Exchange Commission (the “SEC”), its chairman Jay Clayton, and its secretary Brent J. Fields. For decades, questions have been raised, and criticisms offered, of the SEC’s longstanding practice of requiring (or allowing, depending on one’s point of view) settling defe…
Read MoreOn February 7,2019, the SEC charged Robert Alexander with fraudulently raising approximately $9 million from more than 50 individuals by selling investments in Kizzang LLC, a purported online gaming business. According to the SEC’s complaint, among other misrepresentations, Robert Alexander told investors that they would make a minimum of ten times the…
Read MoreOn December 17, 2018, John Hurry broker dealer, Scottsdale Capital Advisers Corporation sued the Financial Industry Regulatory Authority (“FINRA”), for breach of contract in the U.S. District Court for the District of Columbia. Scottsdale and its sister company, Alpine Securities, Inc., are broker-dealers controlled by John Hurry and his wife Justine Hurry…
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