2Cir Affirms FINRA Arbitration Award to Jefferies of $1 Million Liquidated Damages For Aborted Employment (BrokeAndBroker.com Blog)
Indiana Woman Convicted Of Conspiracy To Commit Mail Fraud, Wire Fraud, And Money Laundering In Advance-Fee Fraud Scheme Targeting Deaf And Elderly (DOJ Release)
Latvian National Charged for Alleged Role in Transnational Cybercrime Organization (DOJ Release)
SEC Announces Removal of William D. Duhnke III from the Public Company / Accounting Oversight Board; Duane M. DesParte to Serve as Acting Chair Commission to Seek Candidates for all Five Board Positions (SEC Release)
Statement on The Commission's Actions Regarding the PCAOB (by Commissioner Hester M. Peirce and Commissioner Elad L. Roisman)
FINRA Fines and Suspends Rep Over KYC Violations
In the Matter of Woong Seong Hwang, Respondent (FINRA AWC)
FINRA Fines and Suspends Rep Over Discretionary Trading
In the Matter of Ricardo Turlan, Respondent (FINRA AWC)
[S]ummerlin was charged with accepting over $1.2 million from victims of cross-border advance-fee schemes. Many of the identified victims were either elderly, deaf, or both. In these schemes, victims were contacted through Facebook and told that they were winners of a "deaf lottery" or that they had been selected for special and exclusive government grants or other programs. Summerlin herself is deaf and the trial used multiple sign language interpreters to interpret the witness testimony and court proceedings.
In order to claim their supposed prize, grant, or other financial reward, victims were directed to prepay expenses such as taxes and customs fees. Victims were persuaded to do so with the false promise of a much larger payoff. After making an initial payment, victims were directed to make additional larger payments. In some cases, fraudsters were successful at getting multiple payments from victims, who never received any financial reward.
Fraudsters contacting potential victims through Facebook, email, and text messages used fake names and photographs to disguise themselves. These fraudsters also took over the accounts of victims so that they could lure their friends into sending money and to reassure them of the scheme's legitimacy when victims had doubts about participating. Victims were instructed to send these payments to Summerlin, who worked as a "money mule" or intermediary for these fraudsters for approximately four years, from 2012 to 2016.
At trial, the Government showed that Summerlin received over $1.2 million from over 100 people across the country and, in some cases, other countries such as Canada and Australia. Victims mailed Summerlin checks, cash, and money orders. They also wired her funds through bank-to-bank electronic wire transfers and sent her money through Western Union and MoneyGram money transfers. The victims included a deaf elderly couple that resided in this District during the time period of the conspiracy. The Government showed that this couple sent Summerlin around $500,000, depleting their life savings.After receiving these funds, Summerlin rapidly withdrew them from the more than 40 bank accounts she used for these activities. Typically, she wired a portion of the funds to coconspirators in Nigeria and Great Britain. She also made large cash withdrawals, which were used to send funds to coconspirators and for personal use. Finally, she sent a large number of Western Union and MoneyGram money transfers to many of the same recipients in Nigeria and Great Britain. Evidence at trial showed that Summerlin benefited financially from this scheme.
[B]eginning in November 2015, Witte and others stole money and confidential information from unsuspecting victims, including businesses and their financial institutions in the United States, United Kingdom, Australia, Belgium, Canada, Germany, India, Italy, Mexico, Spain, and Russia through the use of the Trickbot malware.
Witte and her co-conspirators allegedly worked together to infect victim computers with the Trickbot malware designed to capture online banking login credentials and harvest other personal information, including credit card numbers, emails, passwords, dates of birth, social security numbers and addresses. Witte and others also allegedly captured login credentials and other stolen personal information to gain access to online bank accounts, execute unauthorized electronic funds transfers and launder the money through U.S. and foreign beneficiary accounts.According to the indictment, Witte worked as a malware developer for the Trickbot Group and wrote code related to the control, deployment, and payments of ransomware. The ransomware informed victims that their computer was encrypted, and that they would need to purchase special software through a Bitcoin address controlled by the Trickbot Group to decrypt their files. In addition, Witte allegedly provided code to the Trickbot Group that monitored and tracked authorized users of the malware and developed tools and protocols to store stolen login credentials.
Although the Commission has the authority to remove PCAOB members from their posts without cause, in all of our actions, we should act with fair process, fully-informed deliberation, and equanimity, none of which characterized the Commission's actions here. Instead the Commission has proceeded in an unprecedented manner that is unmoored from any practical standard that could be meaningfully applied in the future. We are unaware of any similar action by the Commission in connection with its oversight of the PCAOB. These actions set a troubling precedent for the Commission's ongoing oversight of the PCAOB and for the appointment process, including with respect to attracting well-qualified people who want to serve. A future in which PCAOB members are replaced with every change in administration would run counter to the Sarbanes Oxley Act's establishment of staggered terms for Board members, inject instability at the PCAOB, and undermine the PCAOB's important mission by suggesting that it is subject to the vicissitudes of politics.
issues with application; and lack of support service. The causes of action relate to Claimant's assertion: that he was unable to cancel his order prior to the market opening due to some form of error, issue, or glitch with Respondent's stock trading mobile application; that he was unable to protect himself from the market due to his account being locked/suspended by Respondent; and that he was unable to get out of the position before it moved against him.
compensatory damages in the amount of $2,484.00 as compensation for the direct loss caused by the inability to cancel the trade and the fact that he was completely unable to close the position; compensation for damages in an amount the Arbitrator sees fit, due to Claimant being unable to protect himself from the market; compensatory damages in an amount the Arbitrator sees fit, as punishment for the fact the Respondent's support team lied multiple times and withheld documents that would support the Claimant's case; emotional or special damages in an amount the Arbitrator sees fit, due to the immense stress and amount of time and work to make this case; and compensatory damages in the amount of $750.00 ($25.00 per hour for 30 hours) for the time Claimant spent working on this case.
[M]errill Lynch's written supervisory procedures (WSPs) required its registered representatives to collect certain due diligence information when opening a new customer account in order to allow the firm to satisfy its KYC and foreign account activity monitoring obligations. Among other things, Hwang was required to obtain and enter information about the citizenship and address of any customer seeking to open an account.
In May 2009, a friend introduced Hwang to Customer A. Hwang knew Customer A was not a United States citizen, and had recently relocated to Korea. Because Customer A did not satisfy the minimum balance requirement for foreign accounts, Hwang and Customer A agreed to use the New Jersey address of their mutual friend to open a domestic account for Customer A.
Hwang's assistant entered Customer A's country of citizenship as the United States and the New Jersey residence as Customer A's address when completing the account opening documentation. Hwang reviewed the new account opening documentation in Merrill Lynch's account opening system and certified that Customer A's citizenship and address information was correct.
In November 2014 and May 2016, Merrill Lynch opened subaccounts for Customer A. The accounts were opened after Hwang again certified that the information recorded in the firm's systems regarding Customer A's citizenship and address was accurate.
By certifying false information regarding Customer A's citizenship and residence, thereby circumventing the firm's KYC due diligence for foreign accounts, Hwang violated FINRA Rule 2010. By engaging in this conduct, Hwang also caused Merrill Lynch to maintain inaccurate books and records and violated NASD Rule 3110 and FINRA Rules 4511 and 2010.
Between June 2017 and February 2019, Turlan effected approximately 130 transactions in the accounts of two customers without first speaking to the customers on the days of the trades. Neither of the customers provided written authorization for Turlan to exercise discretion in their accounts and UBS did not accept either of the accounts as discretionary accounts. Therefore, Respondent violated NASD Rule 2510(b) and FINRA Rule 2010.
In addition, between January 2018 and December 2018, in one of the accounts, Turlan mismarked approximately 72 trades as "unsolicited," when the transactions were, in fact, solicited. Turlan's mismarking of the order tickets caused UBS to maintain inaccurate books and records. Therefore, Respondent violated FINRA Rules 4511 and 2010.