Securities Industry Commentator by Bill Singer Esq

March 5, 2018

Film Producer Found Guilty In Multimillion-Dollar Investment Scheme (DOJ Press Release 18-063)
After a four-week trial, film producer Geoffrey S. Berman was convicted in the United States District Court for the Southern District of New York of Conspiracy to Commit Investment Adviser Fraud and Securities Fraud; two counts of Investment Adviser Fraud; two counts of Securities Fraud; Wire Fraud; and Conspiracy to Commit Wire Fraud in connection with defrauding investors of more than $26 million.  Co-defendant Keith Wellner had previously pled guilty and has been cooperating with the Government.As set forth in part in the DOJ Press Release:

From 2011 through 2012, BERGSTEIN engaged in a scheme to defraud investors in Weston Capital Asset Management ("WCAM"), a New York-based registered investment adviser, by (i) concealing material information from Weston investors about financial transactions involving their money; (ii) transferring funds from one pool of Weston's investors to make payments to, provide a security interest for, or otherwise benefit, another pool of Weston's investors, without the required disclosures to investors concerning conflicts of interest; and (iii) misappropriating a portion of funds transferred from investor accounts for their own and others' benefit.  BERGSTEIN orchestrated this scheme in part through two transactions involving Weston investors' assets: first, a loan from a Weston fund called the Partners 2 (or "P2") Fund, and, second, a swap agreement with a Weston fund called the Wimbledon TT Portfolio (the "TT Portfolio").

Citigroup Hit With Over $4 Million Award In Wrongful Termination Arbitration ( Blog)
/3853/citigroup-wrongful-termination/ When a former Citigroup Global Markets employee hits the firm with a FINRA Arbitration demand for over $16.5 million in damages, we know that there was likely a lot of bad blood engendered by what was alleged to be a wrongful termination. By the time the arbitration ended, there was quite a bit of blood pouring out of Citigroup as the firm took quite a beating before the final bell rang. 

Two Executives Arrested for Pump and Dump Securities Fraud Scheme / Complaint Filed in Brooklyn Federal Court Charges Defendants with Fraudulently Inflating the Price of Penny Stock (DOJ Press Release)
Dennis Mancino, the President and Chief Executive Officer of HD View 360, Inc. ("HDVW") and William Hirschy, the Chief Executive Officer of WT Consulting Group, LLC, were arrested on charges of conspiracy to commit securities fraud by manipulating the price and trading volume of HDVW, a publicly-traded company that purported to distribute and install security surveillance systems.  READ the FULL-TEXT Mancino and Hirschy Complaint.As set forth in part in the DOJ Press Release:

According to court filings, between July 2017 and February 2018, Mancino and Hirschy engaged in a scheme in which they agreed to artificially control the price and trading volume of shares in Mancino's company, HDVW.  As part of the scheme, the defendants conspired to "pump" HDVW's stock price by executing fraudulent trades and having HDVW issue weekly press releases and then, once HDVW's stock price had increased, to "dump" the stock for a multi-million dollar profit.  The defendants further agreed to pay kickbacks to stock brokers who would execute manipulative trades designed to increase the price and trading volume of HDVW's stock.  In furtherance of the scheme, the defendants executed numerous fraudulent matched trades designed to create the false appearance that HDVW's stock price had risen as a result of genuine market demand. 

SEC Charges U.K. Brokerage Firm, Investment Manager, CEO, and Others for Manipulative Trading in U.S. Microcap Stocks (SEC Press Release 2018-28)
The SEC filed a Complaint in the United States District Court for the Eastern District of New York ("EDNY") alleging securities fraud charges against U.K.-based broker-dealer  Beaufort Securities Ltd. and its investment manager Peter Kyriacou,in connection with the alleged manipulative trading in the securities of HD View 360 Inc., a purported U.S.-based microcap issuer.  Separately, the SEC announced the suspension of trading in HD View and filing of a second Complaint against HD View Chief Executive Officer Dennis Mancino and William T Hirschy, and three entities they control. The defendants apparently became unknowingly involved with an undercover FBI agent, who described his business as manipulating U.S. stocks through pump-and-dump schemes.  These charges arise in part from an undercover operation by the Federal Bureau of Investigation, which also resulted in related criminal prosecutions against these defendants by the Office of the United States Attorney for the Eastern District of New York. READ the Beaufort Complaint, the Mancino Complaint, and the HD View Suspension.