The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
July 15, 2020
Wells Fargo shares tumble 8% after posting $2.4 billion loss, dividend slashed to 10 cents (CNBC by Hugh Son)JPMorgan shares jump after record trading revenue drives stronger-than-expected second quarter profit (CNBC by Hugh Son)SEC Charges Wind Turbine Company and Individuals With Defrauding Investors (SEC Release)Jewelry Wholesaler Indicted for $200 Million Ponzi Scheme / Defendant Allegedly Promised Falsely High Rates of Return for Investments in Wholesale Jewelry Purchases (DOJ Release)SEC Issues $3.8 Million Whistleblower Award (SEC Release)
Bridgewater Over Troubled FINRA Waters (BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/5328/bridgewater-finra-board/
Inevitably, I must ask -- indeed, all Wall Street reform advocates must wonder -- whether FINRA's Nominating Committee knew about the AAA hearing panel's finding of fabrication of evidence that occurred during the new Board Chair Eileen Murray's term as CEO of Bridgewater. If the Nominating Committee knew of the allegations/findings about fabricated evidence, was that disclosed to all FINRA Board members before they voted to approve Murray's nomination? If the Nominating Committee did not know about the fabricated evidence issue, shouldn't Murray have disclosed such facts during the vetting process given that FINRA is Wall Street's leading self-regulatory-organization?
https://www.reuters.com/article/us-goldman-sachs-results/goldman-sachs-profit-rises-on-trading-underwriting-boost-idUSKCN24G1I9
As reported in part by Reuters:
The bank's net earnings applicable to common shareholders rose 2% to $2.25 billion in the quarter ended June 30. Earnings per share rose to $6.26 from $5.81 a year earlier.
Wells Fargo shares tumble 8% after posting $2.4 billion loss, dividend slashed to 10 cents (CNBC by Hugh Son)
https://www.cnbc.com/2020/07/14/wells-fargo-wfc-earnings-q2-2020.html
https://www.cnbc.com/2020/07/14/wells-fargo-wfc-earnings-q2-2020.html
As reported by CNBC's Son in part, at least Wells Fargo ain't tryin' to put any lipstick on this pig:
"We are extremely disappointed in both our second quarter results and our intent to reduce our dividend," CEO Charlie Scharf said in the release. "Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter, which drove the $8.4 billion addition to our credit loss reserve in the second quarter."
JPMorgan shares jump after record trading revenue drives stronger-than-expected second quarter profit (CNBC by Hugh Son)
https://www.cnbc.com/2020/07/14/jpmorgan-chase-jpm-earnings-q2-2020.html
In contrast to Wells Fargo's bleak quarter, JPMorgan fared far better as reported in part by CNBC's Son:
The bank posted earnings of $4.69 billion, or $1.38 a share, exceeding the $1.04 per share estimate of analysts surveyed by Refinitiv. Revenue of $33 billion exceeded the $30.3 billion estimate. Shares of the New York-based lender were up 1.4% in early trading after jumping as much as 4% in the premarket."Despite some recent positive macroeconomic data and significant, decisive government action, we still face much uncertainty regarding the future path of the economy," CEO Jamie Dimon said in the release. "However, we are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm."
SEC Charges Wind Turbine Company and Individuals With Defrauding Investors (SEC Release)
https://www.sec.gov/news/press-release/2020-154
https://www.sec.gov/news/press-release/2020-154
In a Complaint filed in the United States District Court for the Southern District of Florida
https://www.sec.gov/litigation/complaints/2020/comp-pr2020-154.pdf, the SEC alleged that
https://www.sec.gov/litigation/complaints/2020/comp-pr2020-154.pdf, the SEC alleged that
Thunderbird Power Corp., its Chief Executive Officer Richard Hinds, its former President Anthony Goldstein, and consultant John Alexander "Lex" van Arem violated the securities registration, broker-dealer registration, and antifraud provisions of the federal securities laws. As alleged in the SEC Release, Hinds, Goldstein, and van Arem:
orchestrated the fraudulent offering and were responsible for numerous false and misleading statements in offering materials, press releases, and a YouTube video regarding the status of the wind turbine technology, purported validation of the technology by a nationally known firm, and Thunderbird's use of investor proceeds. The complaint further alleges that Goldstein and van Arem retained a national network of sales agents to email and cold call prospective investors using the false claims. According to the complaint, Hinds, Goldstein, and van Arem misappropriated nearly $850,000, representing more than 40 percent of investor funds, to enrich themselves and pay the sales agents to seek out more unsuspecting investors.
Jewelry Wholesaler Indicted for $200 Million Ponzi Scheme / Defendant Allegedly Promised Falsely High Rates of Return for Investments in Wholesale Jewelry Purchases (DOJ Release)
https://www.justice.gov/usao-edny/pr/jewelry-wholesaler-indicted-200-million-ponzi-scheme
Gregory Altieri, the president of LNA Associates, was charged in an Indictment filed in the United States District Court for the Eastern District of New York with one count of wire fraud. As alleged in part in the DOJ Release:
[B]eginning in August 2017, Altieri solicited between $75 million to $85 million from over 80 investors from Queens, Staten Island, Long Island and elsewhere, allegedly to purchase jewelry at "closeout" prices and resell it at a high profit. Altieri promised returns of between 30 and 70 percent in a matter of months. While Altieri initially purchased some jewelry with investors' money, in approximately May 2018 he began to use new investors' money to pay earlier investors, representing to the latter group that they were receiving returns on their investments. These purported "returns" were used by Altieri to convince the earlier investors to keep their money with LNA Associates, by "rolling over" their investments into new investments based on false promises to use this money to purchase additional jewelry. By January 2020, when Altieri stopped making paybacks to investors, he owed them approximately $200 million based on the falsely inflated promised returns.
SEC Issues $3.8 Million Whistleblower Award (SEC Release)
https://www.sec.gov/news/press-release/2020-155
https://www.sec.gov/news/press-release/2020-155
The SEC issued an Order awarding $3.8 million to a whistleblower https://www.sec.gov/rules/other/2020/34-89311.pdf As noted in part in the Order, the SEC:
considered that during the course of an ongoing investigation into a fraudulent scheme, Claimant provided new information that helped the Commission halt an ongoing fraud and return millions of dollars to harmed investors. However, while Claimant's information was important to the case, it was discrete and narrow in scope. After Claimant provided original information to the Commission, Claimant was not able to render further assistance because of a lack of first-hand knowledge. An award of *** % appropriately acknowledges the level of Claimant's contribution to the overall success of the enforcement action, given the limited nature of Claimant's information and assistance.