June 5, 2018
The SEC alleges investment adviser deVere USA failed to disclose agreements with overseas product and service providers that resulted in compensation being paid to the firm and an overseas affiliate that created an incentive for the firm to recommend a pension transfer and particular product or service providers that were obligated to make payments. In settling with the SEC, deVere USA, Inc. agreed to pay an $8 million civil penalty. Separately, the SEC filed a Complaint in the United States District Court for the Southern District of New York against former deVere USA CEO, Benjamin Alderson, and a former manager, Bradley Hamilton alleging that they misled clients and prospective clients about the benefits of pension transfers while concealing material conflicts of interest, including the substantial compensation that Alderson and Hamilton personally stood to receive.
A little known and fairly useless fact is that in 1971, rock band Grand Funk Railroad (which is to be confused with the same band by the name of Grand Funk) sold out 55,000 seats at Shea Stadium in 72 hours whereas the Beatles' 1965 Shea concert took weeks to sell out. What does that have to do with Wall Street regulation? Frankly, I think the connection is fairly obvious. If you don't quite see it, though, please read today's BrokeAndBroker.com Blog.
In a Complaint filed in the United States District Court for the Western District of North Carolina, the SEC alleged that between at least April 2010 and at least August 2015, former options trading instructor Gustavo A. Guzman, solicited over $2.1 million from investors for a purported equity options fund and a real estate fund that he managed. The Complaint alleges that Guzman misappropriated about a third of the proceeds for personal expenses and Ponzi-like payments. The Court entered a default judgment against Guzman permanently enjoining him and ordering him to pay disgorgement of $253,820, prejudgment interest of $25,169, and a civil penalty of $160,000.
Federal prosecutors alleged that during a 3 1/2 year period ending in May 2016, Rawle Gerard Suite a/k/a "Jerry Snead" and other aliases engage concealed his true identity from investors and used a series of companies with names such as STA Opus, TBT Analysis LLC, and Another Winning Trade through which investors lost about $1.6 million in a bogus commodities trading program. Suite was a registered commodity trading advisor and commodity pool operator from late 1985 until May 3, 1990, when his registration was revoked. Since then, he was targeted twice by the California Department of Corporations, which in 2012 obtained a $2.5 million judgment against Suite, in part for violating a prior order issued by the agency. Suite pled guilty in the United States District Court for the Central District of California to four counts of wire fraud and was sentenced to 121 months in federal prison.