Securities Industry Commentator by Bill Singer Esq

August 13, 2018

Former JP Morgan Chase Bank Employee Sentenced to Four Years in Prison for Selling Customer Account Information / Defendant Obtained and Sold For Profit Personal Identifying Information of Bank Customers (DOJ Press Release)
Former JP Morgan Chase Bank  Peter Persaud pled guilty in the United States District Court for the Eastern District of New York to aggravated identity theft in connection with access device fraud.and was sentenced to 48 months' imprisonment . Federal prosecutors alleged that from 2011 to 2015, Persaud sold personal identifying information and account information that belonged to bank customers to others, or used it himself, in order to make unauthorized withdrawals from the accounts.

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:

SEC v. Christopher Collins, et al., Civil Action No. 1:18-cv-07128-KPF (S.D.N.Y., filed August 8, 2018)

SEC v. Lauren Zarksy, Civil Action No. 1:18-cv-07129-KPF (S.D.N.Y., filed August 8, 2018)

SEC v. Dorothy Zarsky, Civil Action No. 1:18-cv-07130-KPF (S.D.N.Y., filed August 8, 2018))

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.
Don't go to the gym before you read today's 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.

Former MLB All-Star Pitcher Esteban Loaiza Pleads Guilty to Possessing 20 Kilograms of Cocaine with Intent to Distribute (DOJ Press Release)
Former Major League Baseball All-Star pitcher Esteban Loaiza pleaded guilty in the United States District Court for the Southern District of California to an Information charging him with possession of 20 kilograms of cocaine with intent to distribute. In what comes off as a somewhat botched pick off play in which Loaiza himself gets caught in a run-down and tagged out, the Press Release offers this play-by-play analysis:

[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
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