FINRA Enters Into Fair Settlement Involving Customer Loans and Outside Business Activities (BrokeAndBroker.com Blog)SEC Obtains Final Judgments Against Three Defendants in International Microcap Manipulation Scheme (SEC Release)Securities Commissioner Issues Order Stopping Fraudulent Cryptocurrency Trading Program (TSSB Release)The Mother with an Edward Jones Account and Her Daughter the Edward Jones Branch Administrator (BrokeAndBroker.com Blog)
[S]pot Option - under the control of Patarkazishvili, the company's founder and former chief executive officer, and Amiran, the company's former president - defrauded retail investors worldwide through a scheme involving the sale of online binary options. Binary options are securities whose payouts are contingent on the outcome of a yes/no proposition, typically whether an underlying asset will be above or below a specified price at the time the option expires. The SEC has previously charged several entities and individuals in connection with their involvement in the sale of binary options using the Spot Option platform, including in the SEC v. Banc de Binary, SEC v. Beserglik, and SEC v. Senderov cases.The SEC alleges that the defendants developed nearly all of the products and services necessary to offer and sell binary options through the internet, including a proprietary trading platform, and that they licensed these products and services to entities they called "white label partners," who directly marketed the binary options. According to the complaint, Spot Option instructed its white label partners to aggressively market the binary options as a highly profitable investments for retail investors. As alleged, investors were not told that the defendants' white label partners were the counter-parties on all investor trades, and thus profited when the investors lost money. To ensure sufficient investor losses and make the scheme profitable, Spot Option allegedly, among other tactics, instructed its partners to permit investors to withdraw only a portion of the monies the investors deposited, devised a manipulative payout structure for binary options trades, and designed its trading platform to increase the probability that investors' trades would expire worthless. According to the complaint, the defendants' deceptive business practices caused U.S. and foreign investors to lose a substantial portion of the money they deposited to their trading accounts. The defendants allegedly made millions of dollars as a result.
[M]orrie Tobin, a California resident, secretly controlled and owned substantially all of the stock in two public companies, Environmental Packaging Technologies Holdings, Inc. and CURE Pharmaceutical Holding Corp, and organized a scheme to sell that stock without disclosing his identity The complaint alleged that Milan Patel and Matthew Ledvina, both formerly attorneys at an international tax law firm, facilitated Tobin's scheme by hiding Tobin's ownership and control over the companies. As alleged, Patel and Ledvina deposited Tobin's stock in accounts in the names of nominee entities at offshore firms including Wintercap SA, a Swiss-based company run by U.K. citizen Roger Knox. Tobin and others allegedly paid promoters to tout the companies' stock, and when the stock rose following the touting, Tobin sold shares for a profit. On October 2, 2018, the SEC filed an emergency action and obtained an asset freeze against Knox and Wintercap SA, charging them with a scheme that generated more than $165 million of illegal sales of stock in at least 50 microcap companies, including Environmental Packaging and CURE.
Before joining the SEC, Gensler was most recently Professor of the Practice of Global Economics and Management at the MIT Sloan School of Management, Co-Director of MIT's Fintech@CSAIL, and Senior Advisor to the MIT Media Lab Digital Currency Initiative. From 2017-2019, he served as chair of the Maryland Financial Consumer Protection Commission.Gensler was formerly chair of the U.S. Commodity Futures Trading Commission, leading the Obama Administration's reform of the $400 trillion swaps market. He also was Senior Advisor to U.S. Senator Paul Sarbanes in writing the Sarbanes-Oxley Act (2002) and was Under Secretary of the Treasury for Domestic Finance and Assistant Secretary of the Treasury from 1997-2001. In recognition for his service, he was awarded Treasury's highest honor, the Alexander Hamilton Award. He is a recipient of the 2014 Frankel Fiduciary Prize.Prior to his public service, Gensler worked at Goldman Sachs, where he became a partner in the Mergers & Acquisition department, headed the firm's Media Group, led fixed income & currency trading in Asia, and was co-head of Finance, responsible for the firm's worldwide Controllers and Treasury efforts.A native of Baltimore, Maryland, Gensler earned his undergraduate degree in economics in 1978 and his MBA from The Wharton School, University of Pennsylvania, in 1979. He has three daughters.
[B]itles and Lacis are directing potential investors to deposit principal in one of eight different "savings plans." They claim proprietary algorithmic trading software referred to as the Cryp-Spider AI Algo-Trading System that trades the principal across different cryptocurrency exchanges. The artificial intelligence's cryptocurrency trading purportedly generates daily returns between 0.3% and 6.0% of principal, and Bitles and Lacis are promising to pay other profits derived from speculation on the relative value of cryptocurrencies and the US Dollar.In addition, Bitles and Lacis are issuing and promoting the sale of BTL Tokens. According to the order, they have been referring to BTL Tokens as "internal tokens" and describe BTL Tokens as utility coins - a term that typically refers to tokens used to purchase goods or services from an issuer. In this case, however, the order accuses Bitles and Lacis of claiming the BTL Tokens will appreciate in value - as much as 10 to 60% per month - and that holders of the BTL Tokens will realize profits of at least 30% per month.. . .The order also alleges Bitles and Lacis are recruiting sales agents to recruit Texas investors. Their recruitment allegedly requires attendance of a seven-day training program - and after the conclusion of this program, sales agents purportedly expect to receive at least $10,000 per month through commissions, bonuses, awards and prizes including a Rolex Watch, luxury yacht and a villa in Dubai.According to the order, however, the parties are not registered to offer securities in Texas and they are recruiting sales agents who are not registered to offer securities in Texas. Likewise, the investments in the cryptocurrency trading program are not registered or permitted for sale in Texas.The order also alleges the offering is a fraud. The parties are accused of concealing critical information, such as the identity and qualifications of traders and key personnel, information relating to the Cryp-Spider AI and financial information relating to business operations.
did not process his withdrawal from the cash value of his account and, instead, the funds disappeared. Claimant further alleged that, during the review of his complaint, Respondent provided inaccurate data for the value of his option holdings.