The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
December 24, 2020
Robbins Sentenced To 60 Months In Federal Prison For Securities Fraud And Money Laundering Convictions / Defrauded Victims Out of More than $10 Million in Financial Fraud Scheme (DOJ Release)SEC Charges Texas Recidivist for Fraudulent Sale of Oil-And-Gas Investments (SEC Release)SEC Charges UK Financial Firm with Acting as Unregistered Broker-Dealer in Clearing Billions of Dollars in U.S. Securities Transactions (SEC Release)SEC Obtains Final Judgment Against RPM International Inc. and Its General Counsel (SEC Release)
GUEST BLOG [In]Securities: Ringing Out for Christmas Day By Aegis Frumento Esq
(BrokeAndBroker.com Blog)
(BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/5607/insecurities-aegis-frumento-christmas/
For Aegis Frumento, 2020 has been a year of absence from his beloved New York City and a period of somewhat splendid isolation in his Hudson Valley home. Working remote, Aegis has taken advantage of Zoom, grown a beard, mastered sourdough bread, and drunk a lot of wine. Notwithstanding his somewhat idyllic retreat, he still greatly misses his Big Apple full of life and street noise, bustling with traffic, with eateries and watering holes beyond count. As to those silly predictions about the death of the City, Aegis promises that he will return next Christmas to Saint Pat's, be it the cathedral on Fifth Avenue or the pub on West 46th Street, or both! London, Paris and Florence survived the plague, and New York will survive COVID. Count on it!
Pandemic prompts Wall Street to look south for Florida's life and work benefits (Reuters by Svea Herbst-Bayliss)
https://www.reuters.com/article/usa-finance-florida/pandemic-prompts-wall-street-to-look-south-for-floridas-life-and-work-benefits-idUSL1N2J21X5
As Bloomberg reports in part on the rumored demise of NYC:
Since legions of finance industry employees began working from home in March, Florida's warm weather, low taxes, affordable space and quick, easy flights back to New York, when needed, have elevated its status.About 30 major financial firms are "kicking the tires" in South Florida, said Kelly Smallridge, who runs an economic development agency in Palm Beach County. A handful of them are serious about shifting staff there, she said.
Robbins Sentenced To 60 Months In Federal Prison For Securities Fraud And Money Laundering Convictions / Defrauded Victims Out of More than $10 Million in Financial Fraud Scheme (DOJ Release)
https://www.justice.gov/usao-ut/pr/robbins-sentenced-60-months-federal-prison-securities-fraud-and-money-laundering
https://www.justice.gov/usao-ut/pr/robbins-sentenced-60-months-federal-prison-securities-fraud-and-money-laundering
Thomas Robbins, 65, pled guilty in the United States District Court for the District of Utah to securities fraud and money laundering; and he was sentenced to 60 months in prison. As alleged in part in the DOJ Release:
According to the plea agreement, as a part of his efforts to lull investors into a false sense of security about their investments, Robbins told investors he had achieved high returns in his foreign day-trading business. In fact, Robbins lost millions of dollars and diverted investor money for his personal use and benefit. He solicited approximately 66 investors to invest around $10,170,700.69 in his scheme.Robbins admitted that he made several fraudulent representations in his communication with investors in the scheme. These representations included telling investors that he had spent 11 years developing an algorithm for foreign currency trading which allowed him to average returns of 5 percent to 30 percent per month, that he had previously worked for a German bank where he was on contract to help the bank develop algorithms for their traders to use, that he used more than 13 different brokerage firms in different countries to facilitate his foreign currency trading program, that he assurred [sic] investors that his trading program was compliant with the laws of the Commodities Futures Trading Commission, and that people who invested with him would never lose more than 5 percent of the net equity in their trading account due to "stop loss" measures.Robbins also admitted in the plea agreement that he made these false representations knowing he was not providing a legitimate investment, that he had lost nearly all of the investor money, and that he was using a portion of the investor money on personal living expenses and no significant investment returns were ever generated.
https://www.sec.gov/litigation/litreleases/2020/lr24995.htm
In a Complaint filed in the United States District Court for the Eastern District of Texas
https://www.sec.gov/litigation/complaints/2020/comp24995.pdf, the SEC charged Ronnie Lee Moss, Jr., Genesis E&P, Inc., Royal Oil, LLC, and Catalyst Operating, LCC with violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder; and further charged Moss with violating the broker-registration provisions of Section 15(a)(1) of the Exchange Act. Without admitting or denying the charges, Genesis has agreed to the entry of a judgment enjoining it from violating the antifraud provisions of the securities laws and ordering it to pay a $192,768 civil penalty. As alleged in part in the SEC Release:
https://www.sec.gov/litigation/complaints/2020/comp24995.pdf, the SEC charged Ronnie Lee Moss, Jr., Genesis E&P, Inc., Royal Oil, LLC, and Catalyst Operating, LCC with violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder; and further charged Moss with violating the broker-registration provisions of Section 15(a)(1) of the Exchange Act. Without admitting or denying the charges, Genesis has agreed to the entry of a judgment enjoining it from violating the antifraud provisions of the securities laws and ordering it to pay a $192,768 civil penalty. As alleged in part in the SEC Release:
[F]rom January 2014 to March 2018, Moss and his companies sold investments in multiple oil-and-gas limited partnerships to 95 investors nationwide. The complaint alleges that Moss oversaw a cold-calling campaign to solicit investors and prepared and distributed offering documents that misstated or omitted material information about his control over Genesis, his poor performance in prior oil-and-gas ventures, and his 2004 criminal conviction for securities fraud in a previous oil and gas offering. The complaint further alleges that Moss misled investors with baseless revenue and production projections and misused offering proceeds.
https://www.sec.gov/litigation/litreleases/2020/lr24996.htm
In a Complaint filed in the United States District Court for the Southern District of New York
https://www.sec.gov/litigation/complaints/2020/comp24996.pdf, the SEC charged Global Investment Strategy UK Ltd with violating the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act; and further charges John William Gunn with aiding and abetting GIS's violations. As alleged in part in the SEC Release:
https://www.sec.gov/litigation/complaints/2020/comp24996.pdf, the SEC charged Global Investment Strategy UK Ltd with violating the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act; and further charges John William Gunn with aiding and abetting GIS's violations. As alleged in part in the SEC Release:
[F]rom at least 2015 through 2019, GIS-a financial firm located in the United Kingdom that has never been registered as a broker or dealer in the United States-provided clearance and settlement services to hundreds of U.S. customers for trades primarily between U.S. buyers and sellers and involving billions of dollars' worth of securities. The complaint alleges that GIS was acting as an unregistered broker by providing the clearance and settlement services for its U.S. customers, receiving transaction-based compensation for the trades, extending margin to its customers, holding customer funds and securities, and soliciting customers for its brokerage services. As alleged, by failing to register with the SEC, GIS avoided having to comply with the financial responsibility rules that apply to firms that provide clearance and settlement services to U.S. customers, including rules limiting the amount a customer can initially borrow from a broker-dealer to purchase an equity security. As set forth in the complaint, by clearing through GIS, a customer could purchase securities valued at 20 or 30 times the equity in the account. U.S. customers allegedly chose to clear their trades through GIS because of the increased leverage available, even though GIS purportedly charged higher per-trade fees than U.S. firms.
https://www.sec.gov/litigation/litreleases/2020/lr24994.htm
Without admitting or denying the allegations of a Complaint filed in the United States District Court for the District of Columbia, RPM International Inc. agreed to be permanently enjoined
https://www.sec.gov/litigation/litreleases/2020/judgment24994.pdf from violating the reporting provisions of Section 13(a) of the Securities Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; the books and records provision of Exchange Act Section 13(b)(2)(A); and the internal accounting controls provision of Exchange Act Section 13(b)(2)(B). RPM also agreed to pay a penalty of $2 million. Also, without admitting or denying the Complaint's allegations, RPM's General Counsel/Chief Compliance Officer Edward W. Moore agreed to be permanently enjoined from violating the books and records provision of Exchange Act Rule 13b2-1 and to pay a penalty of $22,500. As alleged in part in the SEC Release:
https://www.sec.gov/litigation/litreleases/2020/judgment24994.pdf from violating the reporting provisions of Section 13(a) of the Securities Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; the books and records provision of Exchange Act Section 13(b)(2)(A); and the internal accounting controls provision of Exchange Act Section 13(b)(2)(B). RPM also agreed to pay a penalty of $2 million. Also, without admitting or denying the Complaint's allegations, RPM's General Counsel/Chief Compliance Officer Edward W. Moore agreed to be permanently enjoined from violating the books and records provision of Exchange Act Rule 13b2-1 and to pay a penalty of $22,500. As alleged in part in the SEC Release:
[i]n violation of generally accepted accounting principles and the securities laws, RPM failed to timely disclose a material loss contingency, or record an accrual, for a U.S. Department of Justice investigation. According to the complaint, from 2011 through 2013, RPM was under an investigation by DOJ concerning whether RPM overcharged the government on certain contracts, and Moore oversaw RPM's response to the investigation. The SEC alleged that, in the first and second quarters of RPM's fiscal year 2013, RPM estimated that it overcharged the government by material amounts on the contracts at issue and, in the second quarter, planned to settle with DOJ. As alleged, however, RPM did not disclose the DOJ investigation, or record any accrual on its books, until the third quarter. As further alleged by the SEC, Moore knew the status of the DOJ investigation but failed to communicate key facts - including the overcharge estimates - to RPM's Chief Executive Officer, Chief Financial Officer, and Audit Committee, among others. As a result, according to the complaint, RPM failed to timely disclose and record an accrual for the DOJ investigation. In August 2014, RPM restated the first three quarters of its fiscal year 2013 to disclose the DOJ investigation in the first quarter, and to record accruals in the first, second, and third quarters. In its restatement, RPM also disclosed a material weakness in its internal control over financial reporting during the first two quarters of fiscal year 2013.