The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
June 14, 2021
Federal Court Sanctions Australian Trader for Spoofing and Engaging in a Manipulative and Deceptive Scheme (CFTC Release)
https://www.cftc.gov/PressRoom/PressReleases/8395-21
https://www.cftc.gov/PressRoom/PressReleases/8395-21
The United States District Court for the Northern District of Illinois entered a Consent Order https://www.cftc.gov/media/6066/enfjiongshengzhaoconsentorder060421/download prohibiting Australia-based trader Jiongsheng Zhao from trading in commodity interests for five years, imposing $21,000 in disgorgement, and requiring Zhao to cease and desist from violating the CEA's prohibitions on spoofing and manipulation. Previously, Zhao pled guilty in a parallel criminal action to one count of spoofing. As alleged in part in the CFTC Release:
[F]rom at least July 2012 through at least March 2017, Zhao repeatedly engaged in manipulative or deceptive acts and practices by "spoofing" (bidding or offering with the intent to cancel the bid or offer before execution). On thousands of occasions, Zhao placed an order that he wanted to execute and thereafter entered a larger order on the opposite side of the market that he intended to cancel before execution. In placing these larger spoof orders, Zhao intentionally or recklessly sent false signals of increased supply or demand designed to trick market participants into executing against the orders he wanted filled.
https://www.justice.gov/usao-mdfl/pr/st-petersburg-man-indicted-investment-scheme
In an Indictment filed in the United States District court for the Middle District of Florida, Thomas Coelho f/k/a "Thomas Jurewicz" was charged with two counts of wire fraud. As alleged in part in the DOJ Release:
[C]oelho recruited investors for a business opportunity that purportedly involved purchasing event tickets and reselling those tickets to third parties for a profit. Coelho used his association with persons and entities in the entertainment industry to give the appearance of the means and ability to acquire tickets to certain high-profile events. Instead of using investors' money to buy event tickets, however, Coelho primarily used the funds for personal expenses, entertainment, and cash withdrawals.
https://www.sec.gov/news/press-release/2021-98
In a Complaint filed in the United States District Court for the South Carolina
https://www.sec.gov/litigation/complaints/2021/comp-pr2021-98.pdf, the SEC charged Edgar M. Radjabli, Apis Capital Management LLC, and My Loan DoctorLLC with violations of the registration provisions of the Securities Act. Without admitting or denying the allegations in the SEC Complaint, Radjabli agreed to pay $162,800 in disgorgement, $17,870 in prejudgment interest, and $419,330 in civil penalties, for which he, Apis Capital, and Loan Doctor would be jointly and severally liable. Also, Radjabli, Apis Capital, and Loan Doctor will be permanently enjoined from violating the charged provisions of the federal securities laws, and Radjabli will be subjected to a conduct-based injunction and penny stock bar and a bar from the securities industry. As alleged in part in the SEC Release:
https://www.sec.gov/litigation/complaints/2021/comp-pr2021-98.pdf, the SEC charged Edgar M. Radjabli, Apis Capital Management LLC, and My Loan DoctorLLC with violations of the registration provisions of the Securities Act. Without admitting or denying the allegations in the SEC Complaint, Radjabli agreed to pay $162,800 in disgorgement, $17,870 in prejudgment interest, and $419,330 in civil penalties, for which he, Apis Capital, and Loan Doctor would be jointly and severally liable. Also, Radjabli, Apis Capital, and Loan Doctor will be permanently enjoined from violating the charged provisions of the federal securities laws, and Radjabli will be subjected to a conduct-based injunction and penny stock bar and a bar from the securities industry. As alleged in part in the SEC Release:
SEC Charges Microcap Company and Consultant with Fraudulent Statements Concerning Covid-19 Products (SEC Release)[R]adjabli, formerly a practicing dentist, and Apis Capital Management LLC, an unregistered investment adviser firm Radjabli owned and controlled, conducted a fraudulent offering of Apis Tokens, a digital asset representing tokenized interests in Apis Capital's main investment fund. Radjabli and Apis Capital issued a June 2018 press release falsely claiming that the Apis Token offering had raised $1.7 million when, in fact, the offering had raised no money.The complaint further alleges that Radjabli and Apis Capital manipulated the securities market for Veritone Inc., a publicly-traded artificial intelligence company, by announcing in December 2018 an unsolicited cash tender offer to purchase Veritone for $200 million, when, in truth, Radjabli and Apis Capital lacked the financing or any reasonable prospect of obtaining the financing necessary to complete the deal. Radjabli allegedly generated $162,800 in illicit profits on the resulting increase in Veritone's stock price by trading Veritone securities on behalf of Apis Capital and an affiliated fund.Finally, the complaint alleges that Radjabli raised nearly $20 million from more than 450 investors in an unregistered, fraudulent securities offering launched in August 2019 through My Loan Doctor LLC. Radjabli falsely represented that investor funds raised by Loan Doctor would be used to originate loans to healthcare professionals which then would be securitized and sold to large institutional investors. Instead, Radjabli allegedly invested the bulk of the investor funds in unsecured and uninsured loans to digital asset lending firms and loaned almost $1.8 million of investor proceeds to Apis Capital.
https://www.sec.gov/litigation/litreleases/2021/lr25114.htm
In a Complaint filed in the United States District Court for the Central District of California
https://www.sec.gov/litigation/complaints/2021/comp25114.pdf, the SEC alleged that alleges that Wellness Matrix Group, Inc. and George Todt violated the antifraud provisions of Section 10(b) of the Securities and Exchange Act and Rule 10b-5 thereunder. On April 7, 2020, an SEC Order temporarily suspended trading in the securities of Wellness Matrix. As alleged in part in the SEC Release:
https://www.sec.gov/litigation/complaints/2021/comp25114.pdf, the SEC alleged that alleges that Wellness Matrix Group, Inc. and George Todt violated the antifraud provisions of Section 10(b) of the Securities and Exchange Act and Rule 10b-5 thereunder. On April 7, 2020, an SEC Order temporarily suspended trading in the securities of Wellness Matrix. As alleged in part in the SEC Release:
SEC Charges Biotech Company and Executives in $10 Million Offering Fraud (SEC Release)[I]n February and March 2020, Wellness Matrix and Todt made materially false and misleading statements regarding COVID-19 at-home test kits and/or disinfectants that defrauded Wellness Matrix's investors. The complaint alleges that Wellness Matrix and Todt marketed the at-home test kits and disinfectants on Wellness Matrix -affiliated websites and through social media when Wellness Matrix did not have the products to deliver to consumers. The complaint also alleges that Wellness Matrix and Todt represented that the at-home test kits were approved and registered for use by the United States Food and Drug Administration and the disinfectants were approved and registered by the United States Environmental Protection Agency. According to the complaint, however, at the time Wellness Matrix and Todt made these statements, the products were neither approved nor registered by the FDA or the EPA.
https://www.sec.gov/litigation/litreleases/2021/lr25113.htm
In a complaint filed in the United States District Court for the District of Coloraod
https://www.sec.gov/litigation/complaints/2021/comp25113.pdf, the SEC charged Cell>Point LLC, its Chief Executive OfficerGreg Colip, and its Chief Financial Officer Terry Colip with violations of 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. As alleged in part in the SEC Release:
[B]etween January 2016 and February 2021, Cell>Point and the Colips solicited investors by making false and misleading statements that Cell>Point's lead product, an injectable compound designed for lung cancer and cardiovascular imaging, was months away from completing clinical trials that would lead to its commercialization and, ultimately, substantial returns for investors. The SEC alleges that, contrary to such statements, Cell>Point suspended its clinical trials in 2014, and never resumed them because of significant issues with its product. The SEC also alleges that Cell>Point and the Colips made false and misleading statements that overstated the capital that Cell>Point raised since its inception by nearly $50 million and that misleadingly characterized $38 million that Cell>Point owed to its founders as a "contribution" by them to Cell>Point.