Securities Industry Commentator by Bill Singer Esq

November 22, 2017

Sayfullo Saipov Charged With Terrorism and Murder in Aid of Racketeering in Connection With Lower Manhattan Truck Attack (DOJ Press Release).
In connection with the alleged terror attack on October 31, 2017 in Manhattan that killed eight and injured 12, Sayfullo Habibullaevic Saipov was charged with: 

  • Counts 1-8: Murder in Aid of Racketeering with a maximum sentence of life imprisonment or death on each count.
  • Counts 9-20: Attempted Murder in Aid of Racketeering with a maximum sentence of 10 years' imprisonment on each count.
  • Count 21: Providing and Attempting to Provide Material Support to a Designated Foreign Terrorist Organization Resulting in Death with a maximum sentence of life imprisonment.
  • Count 22: Violence and Destruction of Motor Vehicles Resulting in Death with a maximum sentence of life imprisonment or death.
READ the FULL TEXT INDICTMENT United States of America v. Sayfullo Habibullaevic Saipov, Defendant (United States District Court for the Southern District of New York 17-CR-722

United States of America v. Behzad Mesri a/k/a "Skote Vahshat" Defendant (Indictment, United States District Court for the Southern District of New York, 17-CR-689) The Department of Justice announced that it had charged Behzad Mesri, an Iranian national, with the following Counts:

I: computer fraud -- unauthorized access to a protected computer

II: wire fraud

III and V: computer fraud -- threatening to impair the confidentiality of information

IV: computer fraud -- threatening to damage a protected computer / impair the confidentiality of information

V: computer fraud -- threatening to damage a protected computer / impair the confidentiality of information

VI: Interstate Transmission of an Extortionate Communication

VII: Aggravated Identity Theft

Prosecutors allege that Mesri has been a member of an Iran-based hacking group called the Turk Black Hat security team, which had conducted hundreds of website defacements using the online hacker pseudonym "Skote Vahshat." Mesri is further characterized as having worked on behalf of the Iranian military to conduct computer network attacks that targeted military systems, nuclear software systems, and Israeli infrastructure.  The Indictment charges that Mesri engaged in extortion against Home Box Office, Inc. after he had allegedly hacked into the company's computer servers and stole proprietary data, including information about then-unreleased episodes of  "Barry," "Ballers," "Curb Your Enthusiasm," "Room 104," and "The Deuce;" and "Game of Thrones." READ the FULL TEXT INDICTMENT

SEC Obtains Judgment Against Attorney Who Defrauded Escrow Clients in Securities Fraud Scheme (SEC Litigation Release No. 23996; Accounting and Auditing Enforcement Release No. 3908 
Securities and Exchange Commission v. Jay Mac Rust and Christopher K. Brenner, No. 16-cv-03573 (S.D.N.Y. filed May 13, 2016) The SEC charged Rust and Brenner, with fraud for making undisclosed risky investments and in some instances outright stealing money they obtained in escrow accounts from small business owners seeking commercial loans. The SEC obtained a final judgment against Jay Mac Rust, . Rust, whose license to practice law was suspended for three years by the State Bar of Texas as of August 15, 2017, was ordered to pay disgorgement and pre-judgment interest of $191,783.01 and a civil money penalty of $160,706.79.

Operator of Investment Scheme Involving Seniors Charged Criminally (SEC Litigation Release 23995

The United States Attorney's Office for the Northern District of Illinois filed a criminal information charging Daniel H. Glick, a Chicago investment adviser, with one count of wire fraud under 18 U.S.C. § 1343. Glick is currently a defendant in a parallel enforcement action brought by the SEC. United States v. Daniel Glick, No. 17-CR-739 (N.D. Ill.). SEC v. Daniel H. Glick, et al, No. 17-CV-2251 (N.D. Ill.) As set forth in part in the SEC Litigation Release:

According to the criminal information, from at least 2011 through at least 2017, Glick misappropriated at least $5.2 million from clients and financial institutions, furnished forged checks and other phony documents to financial institutions, and lied to clients about the use and safety of their investments. The criminal information further states that most of the funds that Glick misappropriated belonged to elderly clients, including his mother-in-law and father-in-law and an individual in a nursing home, and that Glick used some of the stolen funds to pay personal and business expenses.

On March 23, 2017, the SEC brought an emergency action against Glick and his unregistered, Chicago-Based investment advisory firm, Financial Management Strategies (FMS), based on substantially the same conduct. In its complaint, the SEC alleges that Daniel H. Glick and FMS provided clients with false account statements to hide Glick's use of client funds to, among other things, pay personal and business expenses, purchase a Mercedes-Benz, and pay off loans and debts. The SEC's action also named three relief defendants, including Glick's accounting firm, Glick Accounting Services. 

FINRA Plays Hide And Seek With Six Years Of Unauthorized Sales And Withdrawals ( Blog

The Blog's publisher, Bill Singer, Esq., often criticizes the Financial Industry Regulatory Authority for what he calls a lack of "content and context" in its various published arbitration and regulatory documents. As Bill sees it, FINRA has an obligation to say what it means and mean what it says. After all, the regulation of Wall Street is serious business that involves both public customers and industry participants. As such, you got lots of folks who have a vested interest in understanding what's going on in the industry and how FINRA is determining when and whether to fine and suspend. 

In a recent FINRA regulatory settlement, the lack of explanation as to the basic elements of the case is baffling. Either the regulator doesn't think the facts are important or it never got the facts or it lacks the ability to convey such information. You judge for yourself.