Securities Industry Commentator by Bill Singer Esq

December 8, 2017 
Pursuant to his guilty plea in federal court, George Trevor Porrata was sentenced to five years' imprisonment for conspiring to commit securities fraud and ordered to pay $1,046,385.50 in restitution  and $400,000 in forfeiture.  According to the DOJ Press Release:

[F]rom March 2010 to September 2013, Porrata directed press releases to be issued with false information to induce people to invest in Halberd, a company that purportedly produced aerial drones but, in fact, existed primarily on paper.  Among other things, Porrata caused press releases to be issued about Halberd opening a sales and marketing office, owning a mass production facility and submitting a bid for a government contract.  Contrary to these representations, this information was false and it caused unsuspecting victims to invest in Halberd and also caused the company's stock price to be artificially inflated.  Porrata and his co-conspirators sold their own shares of the company at the inflated price and caused investor losses of more than $1 million.

Louisiana Resident Indicted in Stolen ID Refund Fraud Scheme (DOJ Press Release 17-1386) The human imagination is seemingly limitless and often soars to awe-inspiring heights in the face of adversity. With that in mind, consider this portion of the DOJ Press Release: 

According to the indictment, Aaron Daniels conspired with others to defraud the United States by filing tax returns with the Internal Revenue Service (IRS) that sought fraudulent refunds.  Daniels allegedly obtained the IDs of inmates he was incarcerated with in the East Carroll Detention Center and provided this information to his co-conspirators in exchange for a fee so they could file fraudulent tax returns.  Daniels is also charged with assisting in the preparation and presentation of seven false tax returns, including his own personal returns, which allegedly included false dependents and education credits, and sought inflated refunds.

Widow Lacks Standing In FINRA Arbitration Involving Husband's IRA It's another day in the Compliance Department on Wall Street and the mail has just arrived. We got a few letters that are clearly coming from unhappy campers. Time to get out the old rubber stamp and mark them "RCVD" and enter the data into the online "Customer Complaint" file. Next, we notify the registered rep involved. Next, we arrange to amend the rep's Form U4 and to notify FINRA of the regulatory disclosable event. Ho hum . . . stamp . . . type . . . send. That's the compliance assembly line. The problem is whether all that stamping and processing is going on a tad too quickly and without someone asking whether the correspondence contains a "grievance" from a "customer." Why do those questions matter? Consider today's featured FINRA arbitration. READ