SEC Charges Portfolio Manager with Using Forged Document to Offer Securities to Investor (SEC Release)SEC Charges Florida Real Estate Companies and Executive with Misappropriating Investor Money (SEC Release)Former CEO of Publicly Traded Company Sentenced to 15 Months' Imprisonment and Ordered to Pay More Than $1.2 Million in Restitution for Securities Fraud Conspiracy (DOJ Release)
FINRA warns member firms of an ongoing phishing campaign that involves fraudulent emails (see sample in Appendix) purporting to be from FINRA and using the domain name "@gateway-finra.org." The email asks the recipient to click a link to "view request" and provide information to "complete" that request, noting that "late submission may attract penalties."FINRA recommends that anyone who clicked on any link or image in the email immediately notify the appropriate individuals in their firm of the incident.The domain of "gateway-finra.org" is not connected to FINRA and firms should delete all emails originating from this domain name
[I]n January 2019, Salzano, an executive advisor and portfolio manager at National Realty Investment Advisors, LLC, a New Jersey-based private real estate management firm, sent the loan document to an investor to obtain an investment in a joint venture opportunity offered by the firm. The complaint alleges that Salzano provided the investor a term sheet for a loan that purportedly was being used to finance the real estate project in which the investor would invest. As alleged, the term sheet falsely stated that a third-party lender had committed to provide a $25 million loan for the project, and that the term sheet contained the forged signature of the lender's chief executive officer. Further, the complaint alleges that Salzano knowingly provided the false term sheet to the investor in an attempt to secure the investment.
[A]fter Hand learned of negative efficacy results from the trial, she tipped Chad Calice, who then sold all of his Neuralstem stock ahead of the public announcement of the negative news. The complaint alleges that while selling his shares, Calice tipped off his uncle, who then also sold his entire Neuralstem position that day. According to the complaint, after the negative news was announced the next morning, the price of Neuralstem stock dropped by approximately 50%. As alleged, by selling their stock in advance of the news, Calice avoided losses of $103,875 and his uncle avoided losses of $14,434.
[F]rom January 2016 through September 2020, Brodman, his company Property Income Investors LLC, and his various other entities raised approximately $9.06 million from about 156 investors through a series of unregistered securities offerings. The complaint alleges that Brodman and his companies told investors that offering proceeds would be used to purchase turnkey, multifamily properties located in South Florida, which would then be renovated and rented to tenants. As alleged in the complaint, however, Brodman misappropriated approximately $1.12 million in investor funds for his own personal use. In addition, Brodman and his companies allegedly misused investor money by paying sales commissions totaling about $1.2 million to unregistered sales agents, despite telling investors that commissions would only be paid to "licensed broker/dealers," and by using investor funds to pay a portion of the purported profits that were distributed to investors. The complaint alleges that Nicolosi, the companies' top producing sales agent, offered and sold the unregistered securities despite the fact that he was not a registered broker.
From April to August 2017, Ahn, a long-time senior corporate executive and board director for biotech companies, worked as a consultant for a New York firm, and advised it during its efforts to acquire Dimension Therapeutics, Inc., a biotech firm formerly headquartered in Cambridge, Mass. In the course of his work for the New York firm, Ahn learned about Dimension's intention to be acquired by another biotech firm, the details and the timing of his employer's proposals to acquire Dimension and gained access to confidential information about Dimension's business. Ahn thereafter bought Dimension stock while in possession of that nonpublic information. When Dimension announced that it would be acquired in August 2017, its stock increased 262% in one day.The SEC previously filed a separate civil action against Ahn in federal court in Boston.
Between July 2017 and February 2018, Mancino conspired to increase HD View's stock price by executing numerous fraudulent matched trades designed to create the false appearance that HD View's stock price had risen as a result of genuine market demand. Once HD View's stock price increased, the conspirators sold the stock for profit and caused more than $1.2 million in losses to more than 1,200 HD View investors. Mancino also agreed to pay kickbacks to stock brokers who would execute manipulative trades designed to increase the price and trading volume of HD View's stock.
Make no mistake: As the rule stands today, cancelling or amending any 10b5-1 plans calls into question whether they were entered into in good faith. If insiders don't act in good faith when using 10b5-1 plans, those plans will not offer them an affirmative defense.In addition, I've asked staff to consider other potential reforms to the rule, including the intersection with share buybacks.Many of your companies may already do these things as they're considered best practices for 10b5-1 plans.I believe, though, that our capital markets might be better served if these practices were consistently required. In addition to evaluating the rule itself, SEC staff will use all of the tools in our toolbox to ensure we are identifying and punishing abuses of 10b5-1 plans.These issues speak to the confidence that investors have in the markets - that everybody, from working families to big institutions to insiders, has a level playing field. Anytime we can increase investor confidence in the markets, that's a good thing. It helps both investors and businesses seeking to raise capital, grow, and innovate.