Securities Industry Commentator by Bill Singer Esq

Florida man pleads guilty to wire fraud for scheme to defraud investors with claims of successful commodities trading / Solicited more than $1 million in investments - used more than $280,000 for own expenses (DOJ Release)

SEC Charges Founder of Purported Blockchain Marketplace for Fraudulent ICO (SEC Release)

SEC Files Charges Against Scheme to Sell Fictitious Interests in Marijuana Company (SEC Release)

Asheville Man Pleads Guilty To Securities Fraud And Money Laundering For $22 Million Ponzi Scheme / The Defendant Admitted to Defrauding more than 23 Victims, Including some at, or near, Retirement Age (DOJ Release)

CFTC Orders Australian Company to Pay $1 Million for Spoofing (CFTC Release)

Prudential Wins Dismissal of Tortious Interference Claim (BrokeAndBroker.com Blog)

FINRA Fines and Suspends Operations Manager for Falsely Affixing Signature Stamps. FINRA Department of Enforcement, Complainant, vs Shawna Choate, Respondent (Order Accepting Offer of Settlement, FINRA Office of Hearing Officers)

[B]etween 2011 and 2018, WHITE solicited funds from investors in Florida and Washington State.  WHITE represented that he would use the money to successfully trade in futures contracts first under his own name, and later under the name of his company, M.W. Global Futures LLC, of which he was the sole member.  WHITE claimed to have expertise as a commodities trader, with special training.  He also claimed to be a member of the Chicago Board of Trade.  All of these claims were false.

WHITE provided promotional materials that claimed his trading would provide a high return on investment.  In October 2017, he sent one elderly investor a brochure claiming a return on investment in excess of 16% annually.   Once he got their funds, WHITE sent investors statements purporting to show substantial trading activity and profits.  The statements also showed WHITE's commissions, which were allegedly tied to the level of profits.  WHITE sent some of these fictitious statements via email, constituting wire fraud.  Very little of the money was actually traded in investment accounts, and the investments that were traded resulted in losses.

Of the $1.29 million, WHITE repaid approximately $425,000 as redemptions and purported profits during the scheme.  In November 2018, WHITE was contacted by investigators from the Commodity Futures Trading Commission.  He then repaid an additional $602,000 to two victims.  Under the terms of the plea agreement, WHITE owes the remaining $281,970 in restitution to his victims.

raised approximately $600,000 from nearly 200 investors in an ICO of Opporty's unregistered digital asset securities called "OPP Tokens." Grybniak and Opporty allegedly made multiple false and misleading statements to investors, including exaggerating the number of actual and potential users of its business platform and falsely claiming that the ICO was "SEC regulated," "SEC compliant," and "SEC registered." The SEC's complaint further alleges that Grybniak and Opporty engaged in other deceptive acts, including misappropriating third-party content without approval or attribution, to create the false impression that actual users of Opporty's platform had created such content.

 

[B]etween August 2015 and December 2017, Griffithe, of California, used Renewable Technologies Solution, Inc., an entity he controlled, to sell investors purported ownership interests in SMRB LLC, a Washington company owned by Russell that held a license to grow marijuana under the state's recreational cannabis laws. According to the complaint, Griffithe and Russell led investors to believe their investments in Renewable would be used to operate SMRB, but in reality the securities did not convey any legitimate stake in SMRB. Instead, Griffithe allegedly spent approximately $1.8 million of investor funds on personal and unrelated business expenses, including payments toward several luxury cars for himself and a yacht for Russell. Griffithe also allegedly deposited approximately $1.7 million into Russell's personal bank accounts. To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors, which were partially funded in a Ponzi-like fashion using funds from other investors.

[F] at least 2006 through September 2019, Brown fraudulently obtained more than $22 million from dozens of victims, some of whom were at, or near, retirement age, by engaging in an investment scheme through his company Oodles Inc. and its various affiliates (collectively, "OODLES").  Individual victims invested anywhere from a few thousand to a few million dollars in OODLES. To induce victims to invest their money, Brown falsely represented that OODLES owned hundreds of millions of dollars in intellectual property, namely family entertainment shows and movies. As part of the scheme, Brown repeatedly lied to victims about the imminent sale of those intellectual properties to various well-known media companies. To perpetuate the fraud, Brown developed marketing material seeking investments or loans for OODLES that claimed large returns on funds invested or lent to the company.

As Brown admitted in court today, to convince victims the scheme was legitimate and to appease investors who sought an explanation about delays in payouts, Brown provided victims with a number of fraudulent and misleading statements and fictitious information, including fake bank statements and falsified company agreements, among others.

Brown used a substantial part of victim money on personal expenses unrelated to purported OODLES transactions.  He also used funds contributed by new investors to make payments to existing investors, commonly referred to as "Ponzi" payments.

[B]etween July 2012 and March 2017, a Propex trader engaged in proprietary trading in commodity futures markets on behalf of Propex. On numerous occasions during that time period, the trader engaged in typical spoofing activities - placing bids and offers for E-mini futures contracts with the intent to cancel the bids and offers before execution. The trader typically placed order(s) that he wanted to get filled (genuine orders), on one side of the market, while on the opposite side of the market, he placed order(s) that the trader intended to cancel before execution (spoof orders).  The spoof orders typically consisted of orders that were five times as many contracts as the genuine orders. Generally, the trader cancelled the spoof orders shortly after placing them, often after the genuine orders were filled.

In 2014 and 2015, Respondent falsified dozens of forms by using a stamp to affix a registered principal's signature to the forms, representing that the principal had reviewed and approved deposits of penny stocks even though the principal had not done so. The falsified forms were subsequently provided to a clearing firm and FINRA. By falsifying those documents, Respondent failed to observe high standards of commercial honor and just and equitable principles of trade, and thus violated FINRA Rule 2010.  

• Securities Industry Commentator
• Bill Singer