Securities Industry Commentator by Bill Singer Esq

March 5, 2019
In a Complaint filed in the United States District Court for the Southern District of New York, the SEC alleges that from July 2012 to August 2014, former Alexander Capital L.P. associated person William C. Gennity recommended to four customers a pattern of high-cost, in-and-out trading without any reasonable basis to believe that his customers could make a profit. Gennity's recommendations resulted in losses for the customers and gains for Gennity. The Complaint further alleges that Gennity lied to his customers about the potential for the accounts to profit, and he engaged in unauthorized trading and churning. The Court entered on consent final judgment enjoinoing Gennity from violating 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 ordering him to pay $302,483, consisting of $127,686 in disgorgement, $14,797 in prejudgment interest and a civil penalty of $160,000. Separately, the SEC instituted settled administrative proceedings against Gennity in which, without admitting or denying the findings, Gennity consented to a Commission order barring him from the securities industry and penny stock trading. READ the SEC Order
In a Complaint filed in the United States District Court for the Central District of California, the SEC charged corporate-deal advisor Rong Chen with illegally trading the securities of two companies based on confidential information regarding impending acquisitions learned in the course of advising the acquiring companies. In 2013, when Chen was Vice President of Investments for Tsinghua Unigroup Limited, he allegedly learned of the impending acquisition of RDA Microelectronics Inc; and, thereafter, opened a brokerage account in his wife's name (Yuehong Wang) and used it to make a series of purchases of RDA securities that yielded over $75,000 inprofits. In 2015, when Chen was a Managing Director at a Hong Kong-based investment banking firm that was advising Inc. on its acquisition of rival, he again used his wife's brokerage account to buy out-of-the-money call options, which yielded over $90,000 in profits. Without admitting or denying the allegations in the SEC's Complaint, Chen consented to the entry of a final judgment permanently enjoining him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder; and he agreed to pay disgorgement of $167,092, prejudgment interest of $26,356, and a $167,092 civil penalty. Following Chen's agreement to disgorge, the SEC will voluntarily dismiss its claim against his wife, who was named as a relief defendant.
In today's featured FINRA intra-industry arbitration, Ameriprise Financial Services sued a former stockbroker in an effort to recover balances due on three promissory notes. When the stockbroker shows up to the proceedings without a lawyer and represents himself, well, you know, that's not exactly a formula for success. And it wasn't. The odd part of the case is found in a few errant words that the arbitrators tossed into their Decision. Maybe those words were meant to have significant meaning -- maybe not?
Via subpoenas, the SEC sought documents from Mintrade Technologies, LLC, and documents and testimony from Carla Marin. The demands were allegedly related to activities conducted by a foreign-based broker-dealer and its principal involving alleged solicitation of U.S.-based customers and the movement of customer funds. In an action filed in the United States District Court for the Southern District of Florida, the SEC seeks orders compelling Mintrade and Marin to compel with the subpoenas.
Following the filing of a Complaint by CFTC in the United States District Court for the Middle District of Florida, the Court found that Carlos Javier Ramirez and his companies Gold Chasers, Inc. (GCI), and Royal Leisure International, Inc. (RLI) had obtained over $3 million from customers pursuant to the misappropriation of over 90% of the customers' funds and through fraudulent sales solicitations in connection with the purported purchase of physical gold. The Court ordered Ramirez and RLI to make restitution of $1,980,858 to customers and to pay a civil monetary penalty of $5,942,574; and Ramirez and GCI, to make restitution payments of $761,831 and to pay a civil monetary penalty of $2,285,493.  The Order also imposes trading, solicitation and registration bans against Defendants, and a permanent injunction that prohibits them from engaging in future violations of the federal commodities laws and regulations, as charged.READ the CFTC Order