It's August. It's a Friday in August. As such, it's a quiet news day on Wall Street. That being said, it's also a sad day because of the death of Aretha Franklin. As a child of the Sixties, I loved her music and am saddened by her loss. Rest in Peace. Among my favorite tunes was one that often reminds me of Wall Street: "Chain of Fools"
Citigroup to Pay More Than $10 Million for Books and Records Violations and Inadequate Controls (SEC Press Release 2018-155) Citigroup Inc. and its U.S. broker-dealer subsidiary Citigroup Global Markets Inc. (CGMI) agreed to pay a $5.75 million penalty to settle SEC charges of inaccurate books and records and CGMI's failure reasonably to supervise traders. Citigroup and CGMI settled without admitting or denying the SEC's findings and agreed to cease and desist from future violations. From 2013 to 2016, three CGMI traders allegedly mismarked illiquid positions in certain proprietary accounts they managed, in two cases covering losses from widespread unauthorized trading and the ultimate recognition of $81 million in losses. In the second action, Citigroup subsidiary Grupo Financiero Banamex S.A. de C.V. loaned approximately $3.3 billion to Oceanografia, S.A. (OSA) between 2008 and 2014 based on invoices and work estimates for services that OSA provided to Petroleos Mexicanos (Pemex), the Mexican state-owned oil company. Many of the OSA work estimates were fraudulent and did not reflect amounts Pemex actually owed to OSA. Citigroup ultimately lost approximately $475 million as a result of OSA's fraud. READ the FULL TEXT Orders
$5 Million Awarded In FINRA Customer Arbitration. Now Let's Beat The Dead Horse (BrokeAndBroker.com Blog) The BrokeAndBroker.com Blog's publisher, Bill Singer, has long advocated for the creation of an Anti-Fraud Fund on Wall Street to serve as a back-stop for defrauded public investors who obtain awards of compensatory damages against insolvent industry firms and registered representatives. Bill does not favor extending such a guaranty into punitive damages or "unreasonable" attorneys' fee and other charges, but he does believe that the securities industry has the wherewithal and the moral/ethical obligation to put its money where its dirty mouth has been. While there may be legitimate debate as to how best to fund the anti-fraud fund, that only goes to the mechanics of doing the right thing. In the case of the Financial Industry Regulatory Authority, we have a self-regulatory-organization that needs to get behind this pro-consumer effort and with haste. Over the years, the BrokeAndBroker.com Blog has presented cases that question the fairness of FINRA's mandatory arbitration forum. Similarly, Bill Singer often criticizes FINRA for the regulator's inept and incompetent oversight of miscreants and recidivists. In today's featured FINRA public customer arbitration, we see the troubling history of two victims dealing with the FINRA community, and we are forced to ask whether their apparent arbitration "victory" is anything more than a sham. FINRA's regulatory mandate is set out in FINRA Rule 2010: Standards of Commercial Honor and Principles of Trade: "A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade." Today's BrokeAndBroker.com Blog asks whether the self-regulatory-organization itself will observe high standards of commercial honor and just and equitable principles of trade when it comes to seeing that justice is done for defrauded public investors.
Three More Florida Residents Sentenced in $6,000,000 Investment Fraud (DOJ Press Release) In response to their guilty pleas to conspiracy to commit fraud and money laundering,.Steven Dykes, Pasquale Rubbo, and Angela Monaco,were sentenced in the United States District Court for the District of Colorado respectively to 108 months, 106 months, and 74 months in prison. Previously, co-conspirators Joseph Rubbo and Nicolas Rubbo were sentenced in a related case to 60 months and 48 months of imprisonment, respectively. The conpiracy defrauded over 30 mostly elderly investors out of over $6,000,000 in an investment fraud scheme that focused on a television production company based in South Florida, VIP Television, LLC, as well as a cleaning product, the "Scrubbieglove," which was also patented in Florida. Investors sent money to both of these companies as a result of false statements about VIP Television's merger opportunities and interest in the Scrubbieglove by entities such as QVC, Walgreens, and Bed, Bath & Beyond. All of the defendants except Monaco had previous convictions for similar criminal activity.
Let's file this one under OMG! Really? Is there no more innovation in crime? Recidivist Fraudster Pleads Guilty for the Third Time to Securities Fraud, Sent to Jail by Judge (DOJ Press Release) Howard M. Appel pled guilty today to one count of conspiracy to commit securities fraud. Appel admitted that after his release from prison following two prior securities-fraud related convictions, he participated in a new securities fraud scheme involving publicly traded companies, including Virtual Piggy, Inc. (ticker symbol "VPIG"), and Red Mountain Resources, Inc. (ticker symbol "RDMP"). Using nominees o hide his ownership from investors, Appel and made between $3,000,000 and $4,000,000 by artificially inflating the share price through such manipulation as engaging in coordinated buying and selling with co-conspirators. Also, he traded on inside information that he obtained as a result of his "consulting" work for the companies, including the status of the companies' efforts to get listed on NASDAQ.
In the Matter of Ameriprise Financial Services,Inc., Respondent(Order Instituting Administrative And Cease-And-Desist Proceedings, Making Findings, And Imposing Remedial Sanctions And A Cease-And-Desist Order; '34 Act Rel. No. 83848; Admin. Proc. File No. 3-18642 / August 15, 2018 ) (the "OIP"). In anticipation of the institution of proceedings by the SEC but without admitting or denying the findings, Ameriprise Financial Services, Inc. submitted an Offer of Settlement, which the federal regulator accepted.In accordance with the terms of the OIP, Respondent Ameriprise was Censured; ordered to ease and desist from committing or causing any violations and any future violations of Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder; and ordered pay a $4,500,000 civil penalty. This matter concerns the failure of Ameriprise, a dually-registered investment adviser and broker-dealer, to adopt and implement policies and procedures reasonably designed to safeguard retail investor assets against misappropriation by the firm's representatives.
GUEST BLOG: A Trillion Reasons By Aegis J. Frumento, Esq.(BrokeAndBroker.com Blog) News that Apple broke the $1 trillion market cap made me remember 1977. Mostly, I remember being twenty-something. But also, Star Wars (the original) was the year's blockbuster. Woody Allen's Annie Hall didn't quite show the Manhattan where I lived, in the pre-grunge grunginess of the West (Greenwich) Village. Saturday Night Fever jump-started the disco era. (In April, Donald married Ivana, but that spins a different tale.) And Scientific American devoted its entire September issue to the future of the computer.
Dominican National Sentenced for International E-Mail Impersonation and Fraud Scam (DOJ Press Release) Federal prosecutors alleged that for approximately two years, Leonel Alexis Valerio Santana conspired with others to defraud victims by pretending to be employees of the SEC. In one version of the scam, victims received e-mails that used official-seeming documentation with the SEC seal to support a false claim that the victim must pay a fee in order to receive a portion of a legal settlement. Another version sent e-mails and official-seeming documents labeling the victim as a defendant in a civil lawsuit alleging that the victim owed tens of thousands of dollars in supposed disgorgement, penalties and fees. Victims were told to either appear in court to contest the lawsuit or pay a smaller fee. During Santana's participation in the scheme, the couriers he recruited received $105,869 in victim funds; however, the total solicitations from those victims was over $283,874 in intended loss.
Santana pled guilty to conspiracy to commit money laundering; conspiracy to commit wire fraud; to impersonating a federal employee; and to misusing a government seal. Santana was sentenced in the United States District Court for the District of Massachusetts to 63 months in prison, three years of supervised release, and ordered to pay restitution of $105,869.
Middlesex County, New Jersey, Man Admits Role In Credit Card Fraud And Aggravated Identity Theft Conspiracy (DOJ Press Release) Henry Abdul pled guilty in the United States District Court for the District of New Jersey to an Information charging him with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Federal prosecutors alleged that between October 2015 and January 2018, Abdul, Alexus Omowole, and others conspired to obtain control of credit card accounts by, among other things, contacting the relevant financial institution and posing as the account owner in order to change the personal information associated with the customer accounts, including the residential address, email address, and telephone number. Abdul admitted that the scheme caused between $250,000 and $550,000 in losses, and involved more than 10 separate victims. Omowole pled guilty to conspiracy to commit bank fraud and aggravated identity theft and is awaiting sentencing. READ the FULL TEXT Information.
Plattsburgh Man Sentenced to 63 Months for Online Fraud (DOJ Press Release) Pursuant to his guilty pleas in the United States District Court for the Northern District of New York, Thomas J. Howe was sentenced to 63 months in prison and 3 years of post-release supervision for committing fraud and identity theft. Howe admitted that he and Jared R. Hudson defrauded banks, merchants and individual consumers by purchasing information including credit card numbers, bank account numbers, expiration dates, security codes, answers to security questions, and other personal identification information, and to using that information to electronically purchase goods, and to fraudulently transfer and attempt to transfer funds electronically.Howe had opened investment accounts in his name, which were funded with money taken from other people's bank accounts using stolen account numbers, routing numbers, identification, and bank security information. Howe admitted that his conduct caused at least $508,053.33 in losses. Hudson was sentenced to 79 months in prison and 3 years of supervised release.
Three Charged in Ongoing Identity Theft, Fraud Investigations (DOJ Press Release) In a 21-count indictment filed in the United States District Court for the District of Rhode Island, three more individuals have been charged with schemes to steal and use the personal identifying information of others to defraud, among others, banks, finance companies, car dealerships and retailers. Octavio Andres Difo-Castro and Patricia Peralta were charged with conspiracy, aggravated identity theft, wire fraud, and fraudulent use of a Social Security number in connection with their creating and use of fraudulent documents using stolen identities to purchase goods at retailers in Rhode Island, Massachusetts, Connecticut and Pennsylvania. It is also alleged that they conspired together to execute schemes to defraud a finance company and two credit unions for the purchase of one vehicle, the leasing of a second vehicle and the purchase of a motorcycle. Separately, Jeffry Rodriguez was charged with conspiracy, bank fraud and aggravated identity theft in connection with his opening bank accounts using stolen personal identifying information of others that were used to deposit and withdraw car loan funding obtained fraudulently with the use of stolen identifying information.
Royal Bank of Scotland Agrees to Pay $4.9 Billion for Financial Crisis-Era Misconduct / Settlement Is Largest Penalty Imposed On A Single Entity By The Justice Department For Financial Crisis-Era Misconduct (DOJ Press Release) In what DOJ trumpets as the largest penalty imposed by it for financial crisis-era misconduct at a single entity under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the Royal Bank of Scotland Group plc (RBS) agreed to pay $4.9 billion in settlement of federal civil claims that it had misled investors in the underwriting and issuing of residential mortgage-backed securities (RMBS) between 2005 and 2008. Through its alleged scheme, RBS earned hundreds of millions of dollars, while simultaneously ensuring that it received repayment of billions of dollars lent to originators to fund the faulty loans underlying the RMBS. Allegedly, RBS used RMBS to push the risk of the loans, and tens of billions of dollars in subsequent losses, onto unsuspecting investors, including non-profits, retirement funds, and federally-insured financial institutions. READ the FULL TEXT Settlement Agreement, Statement of Facts, and List of Deals.
Open Letter to the Financial Industry Regulatory Authority's President and Chief Executive Officer Robert Cook, Chairman of the Board Bill Heyman, and Board of Governors (BrokeAndBroker.com Blog) FINRA should immediately appoint an outside, independent counsel to investigate the allegations raised by arbitration Chair Brooks White, particularly as they pertain to possible staff misconduct and/or fraud perpetrated upon the arbitration panel. If, when, and as appropriate, FINRA should suspend or place on administrative leave any staff whose conduct presents the reasonable appearance of malfeasance, nonfeasance, or other misconduct. If the Board determines that, in fact, misconduct occurred, a recommendation of suspension and/or termination of employment should be forthcoming. The Board should unequivocally confirm that no retaliatory action of any nature should be taken against Ardian Hasko or Brooks White, and, in particular, the Board should regularly review over the course of at least the next three years, FINRA's list of arbitrators and the appointments of same to ensure that its dictates are being followed with respect to the further service of arbitrator White. Finally, the independent counsel should be tasked with preparing a report to be provided to the Board but also publicly published on FINRA's website.
FINRA's Nominating and Governance Committee will not nominate a candidate for election in 2018 to fill the vacant Small Firm seat on the NAC.
In the Matter of Tomahawk Exploration LLC and David Thompson Laurance, Respondents(Order Instituting Administrative And Cease-And-Desist Proceedings, Making Findings, And Imposing Remedial Sanctions And A Cease-And-Desist Order; '33 Act Rel. No. 10530; '34 Act Rel. No. 83839; Admin. Proc. File No. 3-18641 / August 14, 2018 ) (the "OIP"). In anticipation of the institution of proceedings by the SEC but without admitting or denying the findings, Tomahawk Exploration LLC and David Thompson Laurance submitted an Offer of Settlement, which the federal regulator accepted.In accordance with the terms of the OIP, Respondents Tomahawk and Laurance were ordered to ease and desist from committing or causing any violations and any future violations of Section 5 of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Respondent Laurance is ordered to pay a $30,000 civil penalty; and is prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. § 78o(d); and he is also barred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock. Tomahawk Exploration LLC, an oil and gas exploration company, and its founder, David Laurance offered and sold digital assets in the form of tokens called "Tomahawkcoins," or "TOM," through an online initial coin offering ("ICO"). Tomahawk's issuance of tokens under the Bounty Program constituted an offer and sale of securities because the Company provided TOM to investors in exchange for services designed to advance Tomahawk's economic interests and foster a trading market for its securities.
In the Matter of Lockwood Advisors Incorporated, Respondent(Order Instituting Administrative And Cease-And-Desist Proceedings, Making Findings, And Imposing A Cease-And-Desist Order; Invest. Adv. Act Rel. No. 4984; Admin. Proc. File No. 3-18638 / August 14, 2018 ) (the "OIP"). In anticipation of the institution of proceedings by the SEC but without admitting or denying the findings, Lockwood Advisors Incorporated submitted an Offer of Settlement, which the federal regulator accepted. In accordance with the terms of the OIP, Respondent Lockwood Advisors Incorporated was ordered to ease and desist from committing or causing any violations and any future violations of Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder; and shall pay a $200,000 civil money penalty. This matter arises from Lockwood's failure to adopt and implement policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder in connection with its assessment, oversight, and disclosure of the trading away practices of the third-party portfolio management firms in its wrap programs.
Florida Computer Store Operator Is Sentenced To 15 Months For Wire Fraud (DOJ Press Release) Alan F. Luboff was sentenced in the United States District Court for the Western District of North Carolina to 15 months in prison and three years of supervised release on wire fraud charges, and ordered to pay $119,900 in restitution. Luboff was the operator of "Triple Play Sales," a computer store falsely represented to the victim that if he gave him $131,400 to help purchase the CPUs, Luboff would provide him. with a $20,000 profit within one week. Luboff spent the money on personal expenditures, such as to pay for car insurance and law care expenses, among other things.
Former attorney indicted for using dozens of his clients' identities to obtain fraudulent litigation advances (DOJ Press Release) Detling Law Group lawyer Chalmer "Chuck" Detling, II was indicted in the United States District Court for the Middle District of Georgia on seven counts of wire fraud and eight counts of aggravated identity theft in connection with his alleged unauthorized use of the identities of 36 former clients of his personal injury law firm in order to apply for and obtain 50 fraudulent litigation advances, totaling over $383,000. Purportedly, the litigation financing entities did not require the clients to be present when applying for the litigation advances or receiving the disbursements, which allowed Detling to further his fraud. Detling allegedly had the loan proceeds wired directly to his law firm's Interest on Lawyer Trust Account ("IOLTA") or he personally picked up checks from the lending entity and deposited the funds into the IOLTA account; and the proceeds were then transferred to Detling Law Group's operating accounts or other Detling Law Group accounts.
Jamaican Woman Sentenced for Lottery Scam Targeting Elderly Victims (DOJ Press Release) After pleading guilty to conspiracy to launder monetary instruments in the United States District Court for the Eastern District of Virginia, Tessicar Karelle Jumpp was sentenced to six years in prison for orchestrating a lottery fraud. From her home in Jamaica, Jumpp contacted victims in the United States, pretended to be a representative of Publishers Clearing House, and falsely informed her victims that they had won a lottery prize of millions of dollars, but were first required to pay taxes and advance fees. Jumpp then instructed her victims to send funds through wire transfers and in packages of cash mailed to her co-conspirator who kept a portion and sent the remainder to Jumpp and others in Jamaica. Jumpp's victims included an 85-year-old woman who was scammed out of over $335,000, and an 85-year-old Massachusetts man who was defrauded out of almost $50,000.
Breathtaking Dissent In Industry Arbitration Asks Court To Sanction FINRA (BrokeAndBroker.com Blog) Breathtaking. Stunning. Stupendous. Majestic. Brilliant. Such are the first thoughts that came to mind for BrokeAndBroker.com Blog's publisher Bill Singer after he first read today's featured FINRA intra-industry arbitration. At issue was a somewhat run-of-the-mill employment dispute in which an associated person sought six-figures in damages from his former employer Morgan Stanley Smith Barney. You wouldn't think any of that would set the stage for an amazing FINRA Arbitration Decision. Well, life is full of surprises. Be prepared to be amazed! The Chair of the FINRA arbitration panel asserted that he was being victimized by an "ethically corrupt attempt to have me sign based on false pretense." Further, the Chair requested this extraordinary sanction:
In recognition of the Claimant's pro se status, it is my additional request that FINRA be charged with all attorneys' fees and expenses, court costs and other related expenses for both parties, or either party, as the case may be, and of those of any other persons, if any, compelled by the court to appear or give testimony, for FINRA's actions in connection with this dispute as set forth above. As the court deems appropriate it should also charge FINRA with a penalty for any action it deems ethically improper or otherwise egregious in conduct.
California Man Sentenced to Prison for Wire Fraud and Money Laundering (DOJ Press Release) Following an eight-day jury trial, Joseph Brent Loftis was convicted in the United States District Court for the District of Montana on five counts of wire fraud and two counts of money laundering. Loftis solicited approximately $3 million from investors based upon false representations that he owned leases on the Blackfeet Indian Reservation. Also, he misrepresented the amounts of oil produced from oil wells and his ownership interests (he had defaulted) in oil and gas leases in Oklahoma and Texas. Further, Loftis misrepresented his education and denied having a criminal record despite a 1995 felony conviction for bank fraud and false statements to a financial institution. Loftis was sentenced to 97 months in prison, three years of supervised release and a $700 special assessment; and subject to a forfeiture order of $1,662,749.10 and a payment of $7,831,666.55 in restitution.
Phony music booking agent sentenced for defrauding victims out of almost $1 million (DOJ Press Release) Octaveon Woods owned and operated several companies, including Global Talent Agency, GTA Bookings, and National Artist Agency, that claimed to be booking agencies in the entertainment industry. Student groups at Emory University, the University of Missouri, and victims overseas booked through Woods' companies artists for concerts and festivals, but he simply withdrew the funds without delivering the artists' services. Even after pleading guilty in April 2018, Woods continued to lure more victims into transferring him money for concerts that were never going to happen. Woods was sentenced in the United States District Court for the Northern District of Georgia to three years, 10 months in prison to be followed by three years of supervised release.
SEC Charges U.S. Congressman and Others With Insider Trading (SEC Litigation Release No. 24231) The SEC filed insider trading charges in the United States District court for the Southern District of New York on August 8, 2018, against Congressman Christopher Collins, the U.S. Representative for New York's 27th Congressional District, his son, Cameron Collins, and a third individual, Stephen Zarsky. Christopher Collins, who served as an independent director of an Australian biotech company, Innate Immunotherapeutics Ltd., is charged with tipping Cameron Collins after receiving confidential information about negative clinical trial results for Innate's multiple sclerosis drug. Cameron Collins and his girlfriend's father, Stephen Zarsky, are charged with trading and tipping others on the basis of the material, nonpublic information. Related criminal charges were filed by the U.S. Attorney's Office for the Southern District of New York. READ the FULL TEXT SEC Complaints. Without admitting or denying the charges, Lauren Zarsky, Cameron Collins' girlfriend, and her mother, Dorothy Zarsky, settled SEC charges allegeing trading on the basis of material, nonpublic information. Lauren Zarsky agreed to disgorge her ill-gotten gains of $19,440, plus prejudgment interest of $839, and pay a civil penalty of $19,440. Dorothy Zarsky agreed to disgorge her ill-gotten gains of $22,600, plus prejudgment interest of $975, and pay a civil penalty of $22,600. The final judgments, which require court approval, would enjoin Lauren Zarsky and Dorothy Zarsky from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. Lauren Zarsky, a CPA, has also agreed to be suspended from appearing or practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC's order permits Zarsky to apply for reinstatement after five years.
10 Year Employee Forgivable Loan Battle Frustrates UBS (BrokeAndBroker.com Blog)Don't go to the gym before you read today's BrokeAndBroker.com Blog. In fact, sit down, put your feet up, and brew a pot of coffee. Today's article features what is now a 14-year long affair that started with a 2004 employee forgivable loan and became a 2008 filing of a FINRA Arbitration Statement of Claim by a former UBS associated person against that broker-dealer. It entails an arbitration and two rounds in the Ohio state courts. We may be done. We may not be done. It all depends upon whether someone decides to file yet another appeal. What is clear, at least as of today, is that the former employee sued UBS for nearly $3 million in compensatory and punitive damages plus interest, fees, and costs. As of this month, the employee owes UBS a lot of money. And that's not the worst of it.
[L]oaiza admitted that on February 9, 2018, he took possession of a silver Mercedes-Benz sport utility vehicle that he knew to contain cocaine. He further admitted that he drove the SUV to a townhouse he rented in Imperial Beach, California, where he transferred 20 kilograms of cocaine to another vehicle in the garage, and that he did so with the intent to distribute the cocaine to another person
Former New Port Richey Resident Sentenced To More Than Ten Years In Connection With Consumer Fraud Schemes (DOJ Press Release) David Owen was sentenced in the United States District Court for the Middle District of Florida to 10 years and 10 months in federal prison for conspiring to commit extortion, money laundering, and mail fraud, in connection with several consumer fraud schemes; and was ordered to py $697,500 restitution, and a money judgment was entered against him in the amount of $1,185,652. Owen and co-conspirator Andrew Corrigan (also sentenced to 10 years in prison) extorted money from victims by falsely representing that the victims had financial obligations to the Internal Revenue Service (IRS), Canadian tax authorities, or other entities; and then then threatened the victims with arrest, prosecution, or other legal consequences unless payment was forthcoming into straw accounts. Owen and Corrigan collected over $850,000 from their victims. As if one scam weren't enough, Owen also targeted three elderly victims and falsely represented to those victims that they had won millions of dollars in the Publisher's Clearing House lottery. The victims provided their financial information and mailed over $315,000 in cashier's checks to a straw business.
SEC Charges Biotechnology Company, and CEO with IIIegal Sales of Stock and a Misleading Public Company Filing (SEC Litigation Release No. 24232 ) In a Complaint filed in the United States District Court for the Southern District of New York, the SEC charged Plandai Biotechnology, Inc.. and its Chariman and Chief Executive Officer Roger Duffield with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The complaint also charges Plandai with violating, and Duffield aiding and abetting violations of, the reporting, books and records, and internal accounting controls provisions of and Sections 13(a), 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and Rules 12b-20 and 13a-1 thereunder. The SEC seeks permanent injunctions and financial penalties against both defendants. Plandai and Duffield allegedly made illegal, unregistered sales of stock to unaccredited investors and failed to adequately disclose that proceeds from sales of Plandai stock were sent to a private company owned by Duffield. READ the FULL TEXT SEC Complaint.