In today's Securities Industry Commentator feed:
District Court Enters Permanent Injunctions Shutting Down Two Groups of International Defendants Responsible for Multi-Million Dollar Mail Fraud Schemes (DOJ Press Release) The Department of Justice obtained consent decrees in two civil actions against 14 individuals and entities that had operated international mail-fraud schemes that preyed on elderly victims and other vulnerable consumers. The scam involved "direct mailers" requesting a "processing fee," in order to claim a prize or some good fortune. READ FULL TEXT CONSENT DECREES
DOL Whistleblower Darrell Whitman Files Emergency Request With US Office Of Special Counsel (BrokeAndBroker.com Blog) In 2010, attorney Darrell Whitman became a Regional Investigator for the San Francisco Region Office of Whistleblower Protection Programs ("OWWP"), which was part of the United States Department of Labor's ("DOL's") Occupational Safety and Health Administration ("OSHA"). Beginning in 2011, Whitman and others in the San Francisco OWWP office complained that they were being hamstrung and short-circuited in their efforts to protect whistleblowers against perceived retaliation -- essentially being prevented from doing the job that they were being paid to do. In May 2015, Whitman was fired. How ironic that Whitman, an OWWP investigator charged with protecting whistleblowers from retaliation, found himself the victim of alleged retaliation by OWWP. In response to his termination, Whitman sued. Today's BrokeAndBroker.com Blog updates Whitman's pending case.
A.G. Schneiderman Releases Open Letter To FCC: Net Neutrality Public Comment Process Corrupted By "Massive Scheme" / Schneiderman: Tens Of Thousands Of New Yorkers May Have Had Their Identities Misused To Drown Out Views Of Real People During FCC Public Comment Period (NYAG Press Release).
Sayfullo Saipov Charged With Terrorism and Murder in Aid of Racketeering in Connection With Lower Manhattan Truck Attack (DOJ Press Release). In connection with the alleged terror attack on October 31, 2017 in Manhattan that killed eight and injured 12, READ the FULL TEXT INDICTMENT United States of America v. Sayfullo Habibullaevic Saipov, Defendant (United States District Court for the Southern District of New York 17-CR-722)
United States of America v. Behzad Mesri a/k/a "Skote Vahshat" Defendant (Indictment, United States District Court for the Southern District of New York, 17-CR-689) The Department of Justice alleged in a seven-count Indictment that Iranian national Behzad Mesri was a member of an Iran-based hacking group called the Turk Black Hat security team, which had conducted hundreds of website. Mesri allegedly also worked on behalf of the Iranian military to conduct computer network attacks that targeted military systems, nuclear software systems, and Israeli infrastructure. The Indictment charges that Mesri engaged in extortion against Home Box Office, Inc. after he had allegedly hacked into the company's computer servers and stole proprietary data, including information about then-unreleased episodes of "Barry," "Ballers," "Curb Your Enthusiasm," "Room 104," and "The Deuce;" and "Game of Thrones." READ the FULL TEXT INDICTMENT
SEC Obtains Judgment Against Attorney Who Defrauded Escrow Clients in Securities Fraud Scheme (SEC Litigation Release No. 23996; Accounting and Auditing Enforcement Release No. 3908) Securities and Exchange Commission v. Jay Mac Rust and Christopher K. Brenner, charges Rust and Brenner with fraud for making undisclosed risky investments and in some instances outright stealing money they obtained in escrow accounts from small business owners seeking commercial loans. Rust, whose license to practice law was suspended for three years by the State Bar of Texas as of August 15, 2017, was ordered to pay disgorgement and pre-judgment interest of $191,783.01 and a civil money penalty of $160,706.79.
Operator of Investment Scheme Involving Seniors Charged Criminally (SEC Litigation Release 23995) The United States Attorney's Office for the Northern District of Illinois filed a criminal Information charging Daniel H. Glick, a Chicago investment adviser, with one count of wire fraud. Glick is a defendant in a parallel SEC enforcement action United States v. Daniel Glick, No. 17-CR-739 (N.D. Ill.). SEC v. Daniel H. Glick, et al, No. 17-CV-2251 (N.D. Ill.) The Information alleges that from at least 2011 through at least 2017, Glick misappropriated at least $5.2 million from clients and financial institutions, furnished forged checks and other phony documents to financial institutions, and lied to clients about the use and safety of their investments. Most of the misappropriated funds allegedly belonged to elderly clients, including Glick's mother-in-law and father-in-law and an individual in a nursing home. The SEC's emergency action are based on substantially the same conduct.
FINRA Plays Hide And Seek With Six Years Of Unauthorized Sales And Withdrawals (BrokeAndBroker.com Blog) In a recent FINRA regulatory settlement, the lack of explanation as to the basic elements of the case is baffling. Either the regulator doesn't think the facts are important or it never got the facts or it lacks the ability to convey such information. You judge for yourself.
In the Matter of Shervin Neman and Neman Financial, Inc. (Initial Decision, Securities and Exchange Commission, Init. Dec. Rel. No. 1227; Admin. Proc. File No. 3-17699 / November 20, 2017) Administrative Law Judge Jason S. Patil's "Initial Decision" imposes industry bars against Neman and revokes the firm's registration. A fascinating aspect of ALJ Patil's rationale is found in his consideration of whether Neman is likely to engage in future violations and if he has shown remorse for his misconduct.
SEC Charges Individual and His Company with Operating an Unregistered Dealer Business (SEC Litigation Release No. 23992 / November 20, 2017) As set forth in pertinent part in the SEC Litigation Release, the federal regulator alleged that Defendants Almagarby and MEG purchased over $1.1 million of aged debts of 39 microcap issuers and sold into the market over 7.4 billion shares generating over $1.4 million in ill-gotten gains. READ FULL TEXT SEC COMPLAINT: Securities and Exchange Commission, Plaintiff, v. Ibrahim Almabarby and Microcap Equity Group LLC, Defendants (Complaint, United States District Court for the Southern District of Florida, 17-CV-62255 / November 17, 2017)
Department of Justice Memorandum: Prohibition on Improper Guidance Documents (DOJ Memorandum) Attorney General Jeff Sessions issued a memo prohibiting the Department of Justice from issuing guidance documents, which purportedly were used at times to circumvent the rulemaking process by attempting to change the law or to impose new compliance standards.
In the Matter of Martin Shkreli (Order on Motion for Summary Disposition, Securities and Exchange Commission, Admin. Proc. Rul. Rel. NO. 5233;Admin. Proc. File No. 3-18127 / November 17, 2017). Administrative Law Judge James E. Grimes granted in part and denied in part the Motion citing the existence of a material question as to whether Shkreli was associated with an investment adviser at the time of his misconduct
Spoofing Email Sends Payment To Minneapolis, Shanghai, And Bremen (BrokeAndBroker.com Blog) The BrokeAndBroker.com Blog has frequently covered stories involving spoofed emails that are sent to banks and brokerage firms. Sometimes the recipients of these fraudulent emails are victims. Sometimes, they're complicit. Sometimes, folks just go about their day and despite all sorts of memos and policies over the years warning them against accepting emails at face value, they disregard protocol and set off an avalanche of trouble and pain. As demonstrated in a recent federal criminal case, we got lots of scamsters alive and well out there in cyberspace.
In today's Securities Industry Commentator feed:
Yelp Inc., Petitioner, v. The Superior Court of Orange County, Respondent; Gregory M. Montagna et al., Real Parties in Interest - AND - Gregory M. Montagna et al., Plaintfiffs and Respondents, v. Yelp Inc., Objector and Appellant (Opinion, Court of Appeal of the State of California, Fourth Appellate District, G054358 consolidated with G054422 / November 13, 2017. Yelp Inc. petitions to overturn an order compelling its production of documents that may reveal the identity of an anonymous reviewer on its site.
Federal Court Sanctions Gerard Suite and STA Opus LLC for Commodity Pool Fraud and Frank Collins for Misappropriation of Customer Funds / Defendants Ordered to Pay Restitution and Civil Monetary Penalties Totaling More Than $4.5 Million (CFTC Press Release pr7647-17)