GUEST BLOG: Labor's Belabored Day By Aegis Frumento Esq
(BrokeAndBroker.com Blog) NYU sociologist Richard Sennett researched back-office employees of Wall Street firms in the wake of the 2008 subprime mortgage collapse, and he recounts the industry's long decline, as short-term profits displaced loyalty and culture as business objectives. Mid-level and lower officers soon began thinking that the executives to whom they reported in revolving-door fashion were incompetent hustlers rather than financial professionals. With lack of respect all around, employees with decades of experience were thrown out on the Street with barely a fare-thee-well as firms scrambled to regain quarterly profitability. There will be more of this to come, as blockchain and other technologies threaten to eliminate hundreds of traditional Wall Street positions.
SEC Charges Cannabis Investment Fund and Founder in Fraudulent Scheme / Agency Warns Retail Investors About Risks of Marijuana-Related Investments
(SEC Release 2018-177) In a Complaint filed in the United States District Court for the Northern District of Texas, the SEC charges with securities fraud and violations of the registration provisions of the federal securities laws in connection with allegations that they defrauded investors out of over $3.3 million through false promises of massive returns in cannabis-related businesses. The Complaint alleges that Cone employed boiler room sales staff, who made cold calls to investors and promised them up to 24 percent annual returns from investments in Greenview. Allegedly, Cone used an alias to conceal his prior criminal convictions, lied about having a former U.S. Drug Enforcement Administration agent on staff, and falsely claimed to have a long record of profitably investing millions in cannabis-related businesses. Cone allegedly spent investors' money on designer clothes and luxury cars, and on payments to earlier investors to prolong the alleged scheme. The SEC release asserts that Cone agreed to an officer-and-director bar and a permanent injunction, and that the Court will determine disgorgement and prejudgment interest. In a parallel criminal proceeding, the U.S. Attorney's Office for the Central District of California charged Cone and seized approximately $1.4 million in cash and assets. READ the FULL TEXT COMPLAINT
Michigan Man Admits Role in Worldwide Trading Account Simulator Scheme; Another Conspirator Indicted / Scheme targeted hundreds of investors in more than 30 countries (DOJ Press Release) In a Complaint filed in the United States District Court for the District of New Jersey, the SEC charged Jeffery Golman and Christorpher Eikenberry with fraud and aiding and abetting fraud for their roles in a fake accounts scheme perpetrated by a phony day-trading firm, Nonko Trading. The Complaint alleges that over 260 Nonoko's customers were defrauded out of at least $1.4 million when they deposited funds into what they thought was Nonko's state-of-the-art platform for day-trading professionals. Allegedly, customers' funds were diverted to personal expenses and for Ponzi-like payments to customers who wanted to close their accounts. Allegedly, Nonko deliberately targeted traders who were inexperienced or had a history of trading losses and lured them by promising generous leverage, low trading commissions, and low minimum deposit requirements. In a parallel action, the U.S. Attorney's Office for the District of New Jersey today announced criminal charges against Goldman and Eikenberry. Eikenberry pled guilty to an Information charging him with one count of conspiracy to commit securities fraud. Goldman was indicted on one count of conspiracy to commit securities fraud and one count of wire fraud. Previously, the SEC had charged Naris Chamroonrat and Adam Plumer, who have settled the SEC's charges. Chamroonrat also pled guilty in a parallel criminal case and is awaiting sentencing. Also, the SEC had previously charged Yaniv Avnon and Ran Armon, whose cases are pending -- and they were both also named in a pending criminal case. READ the FULL TEXT SEC COMPLAINT, Goldman Indictment, and Eikenberry Information
Robert Glen Mouritsen was indicted in the United States District Court for the District of Utah on three counts of wire fraud and three counts of money laundering in connection with his alleged fraud perpetrated on friends and fellow church members to give him money to further a financial fraud scheme he called "The Project." Allegedly, the Project involved a series of complicated international transactions that would replace fiat money with an asset-backed currency system with the backing of several governments. Mourtisen failed to tell investors that The Project had failed to produce any returns in over a decade and that he had used significant amounts of investors' funds for his own personal use and benefit.
In the Matter of Lincoln Investment Planning, LLC,, Respondent
(AWC 2017053723701, August 5, 2018). For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Lincoln Investment Planning, LLC,, submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In accordance with the terms of the AWC, FINRA imposed upon Lincoln a Censure and a plan of Remediation. FINRA member firm Lincoln Investment Planning has about 1,506 registered representatives at some 421 branch offices. Allegedly, Lincoln disadvantaged certain retirement plan and charitable organization customers who were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge but were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During this period, Lincoln failed to establish and maintain a supervisory system and written supervisory procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Lincoln violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010.
SEC Charges Former President of Tennessee-Based Company for Deceiving Investors as to Role of Two Convicted Criminals in Oil Investment Scheme
(SEC Litigation Release No. 24256) In a Complaint filed in the United States District Court for the Southern District of Georgia, the SEC charged Robert William Dorrance, the former president of Southern Energy Group, Inc., with concealing from investors that two convicted criminals ran the company and led a $15 million oil investment scheme affecting more than 150 investors. Dorrance's main work experience was as a former stereo salesman and he largely performed clerical and administrative work at the direction of the two convicted criminals. Dorrance agreed to be permanently prohibited from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and to pay $101,075 in disgorgement plus interest, and $42,500 in civil penalties, for a total of $143,575. READ the FULL TEXT COMPLAINT
Ghanian Fraudster Sentenced to Over 10 Years for a $1.4 Million Conspiracy to Commit Bank and Wire Fraud
(DOJ Press Release) Following his jury conviction in the United States District Court for the District of Maryland, Mohammed "Kofi" Kwaning was sentenced to 121 months in prison, three years of supervised release, for conspiracy to commit bank and wire fraud, as well as bank and wire fraud, and aggravated identity theft. Federal prosecutors alleged that Kwaning and his co-conspirators attempted to steal nearly $1.4 million in funds from the personal, retirement, and business accounts of various victims after the conspirators had acquired account information of individual victims, including from investment account management firms, as well as forged checks containing bank account information of both individual and corporate victims from across the United States.