(DOJ Press Release 18-8) READ the FULL TEXT Memorandum. As set forth in part in the DOJ Press Release, there will purportedly be a return to the rule of law via the deployment of Justice Department resources most effectively to reduce violent crime, stem the tide of the drug crisis, and dismantle criminal gangs.
$4 Billion Crypto-Promoter Offering Fraudulent Investment Programs (Texas State Securities Board Press Release) The Texas Securities Commissioner entered an Emergency Cease and Desist Order to halt the multiple investment programs operated by England-based BitConnect that claims a market share of $4.1 billion for its cryptocurrency coins. READ the FULL TEXT TSSB Emergency Order.
FINRA's $10,000 Expungement Price-Tag To Clear A Victim's Name (BrokeAndBroker.com Blog) In today's BrokeAndBroker.com Blog we focus on a stockbroker who did nothing wrong, should have his industry record expunged of what is independently determined to be a false customer complaint, but is daunted by the price-tag and the delays inherent in that endeavor. Equally troubling, we consider how the Financial Industry Regulatory Authority seems to have developed a lucrative business predicated upon the misfortunes of its associated persons.
Former Transition Management Executive Agrees to Securities Industry Bar and is Ordered to Pay Over $975,000 to Settle Fraud Charges (SEC Litigation Release No. 24023) In Securities and Exchange Commission v. Khaled "Kal" Bassily (United States District Court for the Southern District of New York, 16-CV-2733 / Apr. 12, 2016), the SEC alleged that Khaled Bassily, former head of ConvergEx Group's transition management business, defraud charities, religious organizations, and retirement funds by charging them substantially higher amounts than disclosed for the execution of trading orders.Without admitting or denying the SEC's allegations, Bassily consented to the entry of a final judgment that ordered him to pay a total of $988,414 in disgorgement plus interest and a civil penalty and permanently enjoined him/ Bassily also consented to the entry of an SEC Bar from the securities industry. This settlement is in addition to the SEC's settlement with three ConvergEx Group subsidiaries that agreed to pay over $107 million and admit wrongdoing. Two former employees and a former executive of another ConvergEx Group subsidiary also settled. The SEC's August 2014 Complaint against Anthony G. Blumberg, a former executive of a ConvergEx Group subsidiary, is pending in federal court. READ FULL TEXT Complaints and Orders.
Formerly Registered Investment Adviser Settles SEC Charges Related to Filing False Forms ADV and Other Investment Advisers Act Violations (SEC Press Release) Formerly registered investment adviser, LKL Investment Counsel LLC and its sole principal, Mark H. Love agreed to settle Investment Advisers Act charges alleging misrepresentations in Forms ADV, failure to produce documents to SEC examination staff, and various compliance-related deficiencies. READ FULL TEXT SEC Order.
(Texas State Securities Board Disciplinary Order IC17-REV-01) During an inspection by the Texas State Securities Board staff pursuant to an investigation into whether David Jackson was soliciting individuals via email to invest in private securities offerings, he allegedly refused to provide requested emails and told the Staff to leave his office. In response, the Texas State Securities Board revoked the the investment adviser registration of Jackson Financial Services after its president, David Jackson,allegedly repeatedly refused to turn over emails regarding his solicitation of clients. READ the FULL TEXT Disciplinary Order.
Public Customer Rebuked In Two FINRA Arbitrations (BrokeAndBroker.com Blog) In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in December 2014, three associated persons alleged that public customer Wijk had failed to repay a debit balance that purportedly arose after he had traded an unspecified stock on margin and, thereafter, failed to repay the ensuing debit balance. After losing this 2015 arbitration, apparently public customer Wijk was not prepared to go down without a fight and he filed an arbitration against the prevailing Claimants. Sometimes you should stay down for the count.
Former Executive Managing Director of Och-Ziff Capital Management Indicted for Defrauding Client and Obstruction of Justice / Former Hedge Fund Executive Sought to Defraud Charitable Foundation and Cover Up Fraudulent Self-Dealing from Federal Investigators (DOJ Press Release 18-2) Michael Leslie Cohen, 46, a former executive managing director of hedge fund Och-Ziff Capital Management Group LLC was charged with one count of conspiracy to commit investment adviser fraud, one count of investment adviser fraud, one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to obstruct justice, one count of obstruction of justice and one count of making false statements. The federal Indictment alleged that beginning around 2008, Cohen and his co-conspirator participated in a scheme to defraud a large charitable foundation when recommending financial investments relating to the African mining sector.
Turkish Banker Convicted Of Conspiring To Evade U.S. Sanctions Against Iran And Other Offenses / Unanimous Manhattan Jury Finds That the Defendant Also Used His Position at Turkish Bank to Facilitate Access to the U.S. Financial System and to Conceal International Financial Transactions for Iranian Entities in Violation of U.S. Sanctions (DOJ Press Release 18-3) Mehmet Hakan Atilla, a resident and citizen of Turkey was convicted of conspiracies to defraud the United States, to violate the International Emergency Economic Powers Act (IEEPA), to commit bank fraud and to commit money laundering, as well as a substantive count of bank fraud. Atilla was found guilty of conspiring with others including Reza Zarrab, a/k/a "Riza Sarraf,", also a resident and citizen of Turkey, who pled guilty October 26, 2017, to one count of conspiring to defraud the United States; one count of conspiracy to violate the IEEPA; one count of bank fraud; one count of conspiring to commit bank fraud; one count of money laundering; one count of conspiring to commit money laundering; and one count of conspiring to bribe a U.S. public official and possessing contraband in a federal detention center.
(AARP and NASAA Press Release) AARP and the North American Securities Administrators Association ("NASAA) posted a free online tool to assist investors looking to retain a professional financial advisor. The online tool consists of suggested questions to ask a financial professional (with the ability to enter answers) regarding the advisor's qualifications, methods of compensation, and whether the advisor is required to act as a fiduciary.
Class A Mutual Fund Front-End And FINRA Back-End (BrokeAndBroker.com Blog) Today's featured FINRA regulatory settlement involves the dubious practice of short-term trading in Class A mutual fund shares. With a new year upon us, the Financial Industry Regulatory Authority reminds the investing public to do its homework concerning Class A, B, and C mutual fund shares. It's a lesson well worth learning. As with much of FINRA's regulatory agenda, it's heart seems in the right place but the regulator can't quite get out of its own way and sort of stumbles. All of which reminds us of a golfer who looks great addressing the ball but doesn't quite follow through and shanks what should have been an otherwise good swing.
(BrokeAndBroker.com Blog) There are times that FINRA's regulatory protocol confuses me. Other times, it confounds me. And other times, well, what can I say, try as I might, I can't understand why the self-regulatory-organization does or doesn't do something. As we embark upon a new year, the BrokeAndBroker.com Blog publishes a puzzling case that appears to start off with a wrongly named Respondent in a FINRA disciplinary proceeding. That Respondent wins at FINRA's Office of Hearing Officers trial phase. In response to his victory, FINRA apparently takes the appropriate step of striking his name from the caption of the dismissed proceeding. Inexplicably, that Respondent's name is named in FINRA's National Adjudicatory Council appellate decision -- or so it seems.