Securities Industry Commentator by Bill Singer Esq

Former Morgan Stanley Rep Should Count His FINRA Settlement Blessings (BrokeAndBroker.com Blog)

District of Columbia Man Sentenced to 56 Months in Prison for Fraud, Money Laundering, and Identity Theft Schemes / Schemes Caused More Than $1.5 Million in Losses (DOJ Release)

Former Goldman Sachs Investment Banker Convicted in Massive Bribery and Money Laundering Scheme / Roger Ng Conspired with a Malaysian Socialite and Malaysian Government Officials to Pay Bribes to a Dozen Foreign Officials and to Launder Billions Embezzled from 1Malaysia Development Berhad (DOJ Release)

Covington Woman Sentenced to 21 Months for Fake Investment Scheme (DOJ Release)

Tucson Couple Convicted for Stealing $5 Million from Investors (DOJ Release)

Federal Court Orders Danish Resident to Pay Over $4.7 Million for Forex Fraud and Misappropriation (CFTC Release)

FINRA Fines and Suspends Rep for Signing Supervisor's Name to New Account Forms

In the Matter of Adam Petersen Summers, Respondent (FINRA AWC)

[B]etween September 2017 and June 2019, Skeete received and laundered the proceeds of at least four separate business e-mail compromise schemes targeting the City of Flint, Michigan, an Illinois-based company operating senior care facilities, and other businesses.  Skeete used two stolen identities and multiple fraudulent shell company accounts to receive and launder the proceeds of the business e-mail compromise schemes in the District of Columbia and elsewhere.  He also assumed an address used in two of the schemes by submitting a fraudulent "hold mail" request to the U.S. Postal Service.  In the schemes originally charged in the Southern District of New York, Skeete conspired with 14 other individuals to launder other fraud proceeds out of a fraudulent shell company account.  All told, Skeete participating in diverting and laundering more than $1.5 million.

[B]etween approximately 2009 and 2014, Ng conspired with others to launder billions of dollars misappropriated and fraudulently diverted from 1MDB, including funds 1MDB raised in 2012 and 2013 through three bond transactions it executed with Goldman Sachs, known as "Project Magnolia," "Project Maximus" and "Project Catalyze."  As part of the scheme, Ng and others, including Tim Leissner, the former Southeast Asia Chairman and participating managing director of Goldman Sachs, conspired to pay more than a billion dollars in bribes to a dozen government officials in Malaysia and Abu Dhabi to obtain and retain lucrative business for Goldman Sachs, including the 2012 and 2013 bond deals.  They also conspired to launder the proceeds of their criminal conduct through the U.S. financial system by funding major Hollywood films such as "The Wolf of Wall Street," and purchasing, among other things, artwork from New York-based Christie's auction house including a $51 million Jean-Michael Basquiat painting, a $23 million diamond necklace, millions of dollars in Hermes handbags from a business based on Long Island, and a luxury real estate in Manhattan.

Ng, co-defendant Low Taek Jho, a wealthy Malaysian socialite also known as "Jho Low," and their co-conspirators used Low's close relationships with high-ranking government officials in Malaysia and Abu Dhabi to obtain and retain business for Goldman Sachs through the promise and payment of hundreds of millions of dollars in bribes.  In the course of executing the scheme, Ng conspired with others at Goldman Sachs to circumvent the investment bank's internal accounting controls.  Through its work for 1MDB during that time, Goldman Sachs received approximately $600 million in fees and revenues, while Ng received $35 million for his role in the bribery and money laundering scheme.  In total, Ng and the other co-conspirators misappropriated more than $2.7 billion from 1MDB. 

The evidence at trial included testimony from 26 witnesses called by the government; emails, phone records and bank records showing the defendant's share of the scheme's criminal proceeds was transferred to a bank account held by an offshore shell company in the name of the defendant's mother-in-law; travel records; and receipts for luxury items purchased with the criminal proceeds.

Low remains a fugitive.  In August 2018, Leissner pleaded guilty to a two-count criminal information charging him with conspiring to launder money and conspiring to violate the FCPA by both paying bribes to various Malaysian and Abu Dhabi officials and circumventing the internal accounting controls of Goldman Sachs. Leissner has been ordered to forfeit $43 million and shares of stock valued at more than $200 million.  Leissner is awaiting sentencing.

In October 2020, Goldman Sachs and Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), its Malaysian subsidiary, admitted to conspiring to violate the anti-bribery provisions of the FCPA in connection with the scheme.  Goldman Sachs entered into a deferred prosecution agreement with the United States Attorney's Office for the Eastern District of New York and the Department of Justice's Criminal Division, Fraud Section and Money Laundering and Asset Forfeiture (MLARS), and GS Malaysia pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information.  Goldman Sachs also paid more than $2.9 billion as part of a coordinated resolution with criminal and civil authorities in the United States, the United Kingdom, Singapore, and elsewhere.

The government charged MOREHEAD in a superseding bill of information with committing wire fraud from December 2018 through February 2019. According to court documents, MOREHEAD used a corporation, Chel Corporation, to defraud six victims by embezzling a total of $460,000 that was supposed to cover fees, costs, and down payments for multi-million-dollar loans, when in fact MOREHEAD spent the funds on personal expenses, such as jewelry and a vehicle, and transferred cash to accounts overseas. After MOREHEAD was charged, two additional individuals came forward as victims of the same scheme. Under the terms of the plea agreement, MOREHEAD pled guilty as charged to the superseding bill of information and agreed to pay at $460,000 in restitution to the victims of her scheme, plus amounts owed to any additional victims. The government has already seized $190,784.90 in cash and assets from MOREHEAD, and MOREHEAD pre-paid over $310,000 in restitution in advance of sentencing, for a total of approximately $501,000.

[M]ichael and Betsy Feinberg operated Catharon Software Corporation as husband and wife. The Feinbergs claimed to have produced revolutionary software called VDelta that would generate enormous returns for investors and philanthropists. For almost 15 years, the couple enticed investors with false promises about the software's completion, release date, and capabilities. Their victims included friends and associates recruited through various community organizations in Sedona, Arizona, where the Feinbergs resided at the time. In addition to paying themselves salaries, the Feinbergs used investor money for a wide variety of personal expenses, including their home mortgage.

The order found that Casper Mikkelsen falsely promised clients he would use his discretion to trade forex on their behalf. In turn, his clients invested at least $1,536,782.47 with GNTFX. Rather than using those funds for forex trading as promised, Casper Mikkelsen misappropriated the funds. The order found that Mikkelsen used the clients' funds for his own benefit and to pay certain clients purported forex trading profits as is typical in a Ponzi scheme. The order also found that Mikkelsen was required to register as a commodity trading advisor but was not registered.

LaSalle required new account forms to be signed by the customer and registered representative of record and signed or initialed by a firm principal. LaSalle's policies prohibited registered representatives from signing another person's name on any document affecting a client's account or any records of the firm. 

Between February 2021 and May 2021, Summers signed the name of his supervisor-a branch manager in Summers' office-on 97 new account forms without permission. Each form had already been signed by the customer at the time Summers signed his supervisor's name. Summers submitted the signed forms to LaSalle's home office for approval. 

By signing his supervisor's name on new account forms without permission, Summers engaged in forgery. Therefore, Summers violated FINRA Rule 2010. 

• Securities Industry Commentator
• Bill Singer