The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
December 12, 2022
Intellivest Securities Hunts Down Raiders Who Allegedly Gutted The Brokerage Firm (BrokeAndBroker.com Blog)
DOJ RELEASES
SEC RELEASES
CFTC RELEASES
FINRA RELEASES
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12/12/2022
Intellivest Securities Hunts Down Raiders Who Allegedly Gutted The Brokerage Firm
(BrokeAndBroker.com Blog)
(BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6797/intellivest-securities-growth-capital/
A small FINRA broker-dealer alleged that it had been raided by another firm with devastating consequences: The victim ceased virtually all operations. Down but not out, the small firm sued the raider and won just under $1 million in damages, costs, and fees. Perhaps sensing the enemy closing in, the raider embarked upon a scorched-earth policy by ceasing business and filing for bankruptcy. Now what? The raider started the war but the small firm wasn't agreeing to an armistice.Maryland U.S. Attorney's Office Announces the Seizure of 55 Domain Names that Violated Copyrights by Illegally Live Streaming the World Cup (DOJ Release)
https://www.justice.gov/usao-md/pr/maryland-us-attorney-s-office-announces-seizure-55-domain-names-violated-copyrights
https://www.justice.gov/usao-md/pr/maryland-us-attorney-s-office-announces-seizure-55-domain-names-violated-copyrights
The United States Attorney's Office for the District of Maryland announced the seizure of 55 separate websites for allegedly live streaming the World Cup games, an infringement of the Fédération Internationale de Football Association ("FIFA") copyrights. As alleged in part in the DOJ Release:
[FIFA] is the international governing body of association football and holds the exclusive rights to sanction and stage the FIFA World Cup 2022, which is being hosted in multiple cities in Qatar. Beginning in September 2022, HSI received information from a representative of FIFA identifying several sites being used to distribute and transmit copyright-infringing content, without FIFA's authorization. HSI Agents in Maryland reviewed World Cup games accessible from each of the subject domain names, in violation of FIFA's copyright.As detailed in the affidavit, free access to live sports-related copyright-protected content can attract heavy viewing traffic, which makes websites offering such content a potentially lucrative way to serve advertisements. Based on the pervasive use of advertising on each site, the affidavit alleges that the purpose for distributing the infringing content is the private financial gain to these websites' operators. By seizing the subject domain names the government prevents third parties from acquiring the name and using it to commit additional crimes, or from continuing to access the websites in their present forms.
Order Determining Whistleblower Award Claims ('34 Act Release No. 34-96474; Whistleblower Award Proc. File No. 2023-20)
https://www.sec.gov/rules/other/2022/34-96474.pdf
The SEC's Claims Review Staff ("CRS") issued a Preliminary Determination recommending a Whistleblower Award of over $20 million to Claimant. The Commission ordered that CRS's recommendations be approved. The Order asserts in part that [Ed: footnotes omitted]:
[T]he Commission considered that prior to Claimant's provision of information, Enforcement staff had previously received a detailed referral from the Division of Examinations and had been investigating the conduct for more than a year before receiving Claimant's tip. As such, much of the information Claimant provided was already known to the Enforcement staff, and the new, helpful information Claimant provided was fairly limited. On the other hand, Claimant met with Enforcement staff multiple times and remained cooperative throughout the investigation.
In the Matter of the Arbitration Between Yusuf A. Hai, Claimant, v. CIG Securities,
Osman Radwan Minkara,
Kenneth Gerard Chaput,
CIG Capital Advisors Inc., and
CIG Asset Management, Inc., Respondents (FINRA Arbitration Award 22-01542)
https://www.finra.org/sites/default/files/aao_documents/22-01542.pdf
In a FINRA Arbitration Statement of Claim filed in August 2022, associated person Claimant Hai asserted "that he was terminated without cause and not provided fourteen days' notice of termination pursuant to the Registered Representative Agreement. Claimant also asserted that he was not paid for those fourteen days and that his Personal Time Off ("PTO") was not fully paid." Claimant Hai sought $38,156.79 plus costs/fees. Respondent CIG Asset Management, Inc. is not a FINRA member/associated person and did not voluntarily submit to arbitration; and, as such, the sole FINRA Arbitrator made no determination as to that Respondent. The Arbitrator denied Claimant Hai's claims but found Respondents CIG Securities and CIG Capital jointly/severally liable to reimburse Claimant $300 in filing fees. https://www.finra.org/sites/default/files/aao_documents/22-01542.pdf
https://www.finra.org/sites/default/files/aao_documents/21-02186.pdf
In a FINRA Arbitration Statement of Claim filed in August 2021, public customer Claimant Gagnon asserted:
churning for commissions and quantitative unsuitability (fraud) (Rules 2111 and Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5); qualitative and quantitative unsuitability (Rule 2111); failure to supervise and negligent supervision (Rule 3010); breach of fiduciary contract and implied covenant of good faith and fair dealing; negligent misrepresentation and omissions; and violation of standards of commercial honor and principles of trade (Rule 2010). The causes of action relate to Claimant's allegation that Respondents churned Claimant's account, excessively traded Claimant's account, charged excessive commissions, and recommended and executed unsuitable transactions. The securities involved included Abercrombie & Fitch; Penny JC Co; Pier 1 Imports; Corbus Pharmaceuticals; 3D Systems; Bank of America; Barclays Nat'l Gas ETN; BP PLC; Flame Seal Products; GigaMedia; Hanwha Q Cells; OneOkay Partners; Vale SA; Target Corp.; Alibaba Group; and Facebook, Inc
Claimant Gagnon sought actual/compensatory damages of $1,606,034.39; disgorgement of $1,539,232.42 of excessive commission, interest, fees, and costs. On May 2, 2022, Claimant Gagnon settled with Respondent Reynolds and voluntarily dismissed with prejudice his claims. In a December 7, 2022, Order, the Panel granted both parties' cross motions for Discovery sanctions and ordered Worden to pay Claimant $64,000.00 and ordered Claimant to pay Worden $64,000.00. The FINRA Arbitration Panel found Respondents WCM, Worden, and Rosalia jointly/severally liable and ordered them to pay to Claimant Gagnon $2,000 in compensatory damages.