SEC Obtains Partial Judgment Against Wisconsin Investment Adviser Charged with Defrauding Clients (SEC Release)Former Financial Controller Sentenced to Prison for Embezzling Almost Half a Million Dollars from Family-Owned San Diego Business (DOJ Release)FINRA Arbitration Panel Awards Intellivest Services Damages in Raiding Case Against Growth Capital Services
[S]hillin, while acting as an investment adviser, fabricated documents and made misrepresentations to clients, many of whom were elderly. As alleged, Shillin misrepresented that certain clients had successfully subscribed for IPO or pre-IPO shares in high-profile companies when they had not, and lied to clients about the true value of their investment portfolios. The complaint alleged that Shillin encouraged several advisory clients to roll over their existing life insurance policies into new policies, which caused certain clients to sell securities in order to pay premiums for policies that were non-existent or had far fewer benefits than Shillin claimed. Finally, the complaint alleged that Shillin received hundreds of thousands of dollars in ill-gotten gains as a result of his fraudulent conduct.
The SEC's complaint charged Shillin with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and (2) of the Investment Advisers Act of 1940. Without admitting or denying the SEC's allegations, Shillin consented to the entry of a judgment permanently enjoining him from violating these provisions. In addition, the judgment bars Shillin from acting as an officer or director of a public company and orders him to pay disgorgement, prejudgment interest, and a civil penalty in amounts to be determined by the court at a later date.
In a separate proceeding, based on the entry of the consent judgment and an order previously issued by the Wisconsin Department of Financial Institutions - Division of Securities, on January 7, 2022, the SEC issued an order permanently barring Shillin from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and from participating in any offering of a penny stock.
abused his access to the company's accounting software by issuing more than 200 unauthorized checks to himself using the electronic signature of the company's CFO and depositing them into his personal bank account. He then concealed the payments by manipulating the company's accounting records to make it appear that each check was issued to a legitimate third-party vendor for a business expense. The company discovered Cameron's fraudulent activity in April 2018, fired Cameron, and reported the conduct to law enforcement when Cameron was unable to make his promised repayments on schedule.
[T]he causes of action relate to Claimant's allegation that Respondent wrongfully raided Claimant, resulting in the abrupt resignation of all four of Claimant's registered representatives. Claimant further alleges that because of Respondent's raid and subsequent interference with its clients, it was forced to cease virtually all its business operations.
SEC Awards About $2.6 Million to Whistleblower
[C]laimant initially reported his/her concerns internally before providing information to Commission staff that significantly contributed to an existing investigation. Claimant revealed misconduct of which Commission staff were not aware, and Claimant's information helped Commission staff develop an efficient investigative plan to discover the full extent of the wrongdoing. Claimant also communicated with the staff over the course of the investigation and identified potential witnesses. Claimant's information and assistance was particularly significant in that it helped Commission staff obtain evidence of wrongdoing that was occurring abroad, which would have been difficult to acquire in the absence of Claimant's information and cooperation.
[C]laimants 1 and 2 voluntarily provided original information to the Commission that led to the successful enforcement of the Covered Action. . . . Claimants 1 and 2 provided substantial ongoing assistance throughout the course of the investigation, providing several interviews and consulting telephonically with staff via counsel on numerous occasions, including before and after witness testimony of key witnesses. . . .
From November 2016 through September 2019, LoPinto engaged in quantitatively unsuitable trading in five customer accounts. LoPinto recommended high frequency trading in the five customer accounts. LoPinto's customers routinely followed his recommendations and, as a result, LoPinto exercised de facto control over the five customers' accounts.. . .LoPinto's trading in these five customers' accounts was excessive and unsuitable given the customers' investment profiles. As a result of LoPinto's excessive trading, the 4 customers suffered collective realized losses of $240,331 while paying total trading costs of $205,523, including commissions of $161,706.. . .From April 2018 through June 2019, LoPinto exercised discretion to effect 53 trades in Customer F's account without prior written authorization. LoPinto charged Customer F a total of $21,632 in commissions to place the trades. Customer F did not provide written authorization for LoPinto to exercise discretion in the account and WCM did not accept the account as a discretionary account. . . .