Weekly Enforcement Action Tracker (Apr 22 – Apr 27)

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Penalties: N/A
Respondent: Ambicon Holdings, Inc., et al.
Violation: AmbiCom failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the period ended January 31, 2016… Read More

Penalties: $35,000.00
Respondent: Steven H. Davis, et al
Violation: “On April 18, 2018, a federal court entered judgments against former Dewey & LeBoeuf, LLP executives Stephen DiCarmine and Joel Sanders in an SEC enforcement action arising from their roles in a fraudulent $150 million bond offering.”… Read More

Penalties: N/A
Respondent: Gregory John Tuthill
Violation: From at least September 2010 through January 2012, Tuthill, acted as an unregistered broker by soliciting investors, providing them with sales materials, closing sales, and discussing the merits of the proposed investments with investors. Additionally, Tuthill offered and sold securities in transactions that were not registered with the Commission and not subject to an applicable exemption from registration… Read More

Penalties: $9,221,484.00
Respondent: The Dun & Bradstreet Corporation
Violation: During the time period from approximately 2006 through 2012, D&B’s HDBC and Roadway subsidiaries made unlawful payments in order to obtain or retain business. These unlawful payments were not accurately reflected in the books and records of HDBC and Roadway, which were consolidated into D&B’s books and records. During the relevant period, D&B also failed to devise and maintain sufficient internal accounting controls to detect or prevent the improper payments… Read More

Penalties: $969,788.96
Respondent: Jeremy R. Lundin
Violation: He was associated with Big Island Capital, LLC, he misappropriated investor funds, falsely stated to investors that their funds were invested as he represented that they would be, sent out false account statements indicating that investors funds were fully invested and earning positive returns, and otherwise engaged in a variety of conduct that operated as a fraud and deceit on investors… Read More

Penalties: N/A
Respondent: Marilynjean Interactive Inc.
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligations to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations… Read More

Penalties: $5,200,000.00
Respondent: Daniel H. Glick, et al.
Violation: Misappropriating millions from elderly investors who had entrusted Glick and FMS with their retirement savings. According to the SEC’s complaint, Glick and FMS provided clients with false account statements that hid Glick’s improper use of client funds to pay personal expenses and his improper transfers of funds to two other individuals… Read More

Penalties: $778,819.78
Respondent: WCAS Management Corporation
Violation: Failure regarding conflicts of interest between the adviser and its private equity fund clients and fund investors in connection with an agreement (the “WCAS Services Agreement”) between the adviser and a group purchasing organization (the “GPO”)… Read More

Penalties: $35,000,000.00
Respondent: Altaba Inc. and f/d/b/a Yahoo Inc.
Violation: In late 2014, Yahoo learned of a massive breach of its user database that resulted in the theft, unauthorized access, and acquisition of hundreds of millions of its users’ data, including usernames, birthdates, and telephone numbers. At that time, the breach was the largest known theft of user data… Read More

Penalties: N/A
Respondent: SEC Complaint – PixarBio Corp et al.
Violation: A fraudulent offering of unregistered securities by PixarBio (a biotechnology company with no revenue), Francis Reynolds (PixarBio’s president, chief executive officer, chief financial officer, and chief science officer), Kenneth Stromsland (PixarBio’s chief information officer and vice president of investor and public relations), and M. Jay Herod (a long-time friend of Reynolds). Since at least December 2015, the defendants have raised approximately $12.7 million for PixarBio from about 211 investors… Read More

Penalties: TBD
Respondent: PixarBio Corp. et al.
Violation: Misled investors with false claims about PixarBio’s progress in developing “NeuroRelease,” a purported method of delivering non-opiate, post-operative pain medication. From December 2015 to the present, the defendants are alleged to have falsely told investors that the FDA had lowered PixarBio’s hurdles for regulatory approval. They are also charged with misleading investors about the amount of money PixarBio had raised and about a phony takeover bid of a company that Reynolds had previously led. According to the complaint, the defendants raised about $12.7 million from about 211 investors in an unregistered offering… Read More

Penalties: N/A
Respondent: Oriental Dragon Corp.
Violation: Oriental Dragon Corp. is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the quarter ended September 30, 2013. Further, Oriental Dragon’s Form 10-K for the fiscal year ended December 31, 2012, does not comply with Regulation S-X, as Respondent’s auditor withdrew its 2 opinions issued on the financial statements for the fiscal year ended December 31, 2012. Respondent further failed to heed a delinquency letter sent to Respondent by the Division of Corporation Finance requesting compliance with its periodic filing obligations… Read More

Penalties: TBD
Respondent: AF Ocean Investment Management Company
Violation: AF Ocean’s periodic reports with the Commission failed to disclose the beneficial ownership of Fan over essentially all its issued securities. AF Ocean also issued press releases and filed periodic reports misrepresenting that it had purported business operations. AF Ocean has since become delinquent in its filing obligations with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the period ended June 30, 2016… Read More

Penalties: $140,000.00
Respondent: Andy Z. Fan
Violation: Fan used nominees to conceal, and otherwise failed to disclose, his beneficial ownership of essentially all the issued securities of the Blank Check Companies. Fan also authorized false press releases and Commission filings with respect to purported business operations and engaged in manipulative trading in the public markets in order to maintain the Blank Check Companies as viable candidates for future reverse mergers… Read More

Penalties: TBD
Respondent: ChinAmerica Andy Movie Entertainment Media Company
Violation: ChinAmerica’s periodic reports with the Commission failed to disclose the beneficial ownership of Fan over essentially all its issued securities. ChinAmerica also issued press releases and filed periodic reports misrepresenting that it had purported business operations. ChinAmerica has since become delinquent in its filing obligations with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the period ended June 30, 2016… Read More

Penalties: $843,356.65
Respondent: Tobin J. Senefeld
Violation: During 2013 to 2014, Respondent participated in a fraudulent scheme that raised several million dollars from investors who invested in two farm loan offerings. The amended complaint also alleged that investors were informed that their funds would be used to make short-term operating loans to farms… Read More

Penalties: N/A
Respondent: Ikenna Ikokwu
Violation: In connection with the sale of FutureGen securities, Ikokwu misled his clients and customers by, among other things, failing to disclose compensation received from FutureGen for each sale, falsely claiming that he had performed extensive due diligence into FutureGen, and touting his personal and family investments in FutureGen-related entities while failing to disclose that his largest investment was delinquent. The complaint also alleged that Ikokwu and Ike Inc. acted as unregistered broker-dealers by receiving commissions for the sale of FutureGen securities… Read More

Penalties: N/A
Respondent: Christopher M. Lee, aka Rashid K. Khalfani
Violation: From at least March 2012 until January 2014, in connection with the sale of private investment fund membership interests, Khalfani misappropriated 94% of nearly $2 million in investor funds for personal use or to buy real estate for himself or his company; falsely stated to investors that one of the investment funds was “vetted, qualified and registered” with the SEC and several other government and regulatory agencies… Read More

Penalties: N/A
Respondent: Winning the Money Game with Ike, Inc.
Violation: In connection with the sale of FutureGen securities, Ike Inc. misled its customers by, among other things, failing to disclose compensation received from FutureGen for each sale, falsely claiming that Ikokwu had performed extensive due diligence into FutureGen, and touting Ikokwu’s personal and family investments in FutureGenrelated entities while failing to disclose that his largest investment was delinquent… Read More

Penalties: $225,000.00
Respondent: SEI Investments Global Funds Service
Violation: From approximately mid-2008 through the end of 2012, SEI Global Funds Services’ actions caused the Liquidity Fund to fail to satisfy the conditions necessary for the SEI Funds to rely upon an exemption under Rule 12d1-1 under the Investment Company Act. Rule 12d1-1 permits a fund, subject to certain conditions, to conduct transactions with an affiliated fund that would be otherwise prohibited under Section 17(a)(1) and (2) of the Investment Company Act… Read More

Penalties: $13,801,637.00
Respondent: Howard B. Present
Violation: Present made materially false and misleading statements about the AlphaSector strategy, the flagship product of F-Squared, and its advertised performance, (ii) Present falsely claimed that AlphaSector’s advertised performance was based on the actual performance of real clients’ investments when in fact, prior to September 2008 the performance had been back-tested, and (iii) the advertised performance prior to September 2008 was substantially overstated due to a calculation error… Read More

Penalties: N/A
Respondent: Citigroup Alternative Investment LLC and Citigroup Global Markets Inc.
Violation: After considering the comments to the Proposed Plan, Commission staff, working with the Commission-appointed fund administrator, GCG, have added modifications that address the comments received (the “Plan”). After careful consideration, the Commission concludes that the Plan should be approved… Read More

Penalties: N/A
Respondent: Citigroup Alternative Investment LLC and Citigroup Global Markets Inc. – Distribution Plan
Violation: The Commission found that the Respondents willfully violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, which prohibit fraudulent conduct in the offer or sale of securities. In addition, CGMI willfully violated Section 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”) and CAI violated Section 206(4) of the Advisers Act and Rules 206(4)-7 and 8 promulgated thereunder… Read More

Penalties: $345,000.00
Respondent: J.P. Morgan Securities LLC
Violation: Limitations in the firm’s systems also led to a failure to retain market data snapshots from the Securities Information Processor (“SIP”), which the firm used to make order routing determinations… Read More

Penalties: N/A
Respondent: Douglas A. Leone
Violation: “Potential unsuitable recommendations and excessive trading in customer accounts. Pursuant to FINRA Rule 8210, Enforcement twice requested that Respondent appears at an on-the-record interview (“OTR”) to provide testimony. Respondent did not appear. For violating FINRA Rules 8210 and 2010″… Read More

Penalties: N/A
Respondent: Kristen Lewis
Violation: In March 2018, Respondent violated FINRA Rules 8210 and 2010 by refusing to appear for on-the-record testimony requested pursuant to FINRA Rule 8210… Read More

Penalties: $41,055.00
Respondent: Ahmed Ghassan Gheith
Violation: Gheith did not disclose his participation in these private securities transactions to his firm, in violation of NASD Rule 3040 and FINRA Rules 3280 and 2010… Read More

Penalties: N/A
Respondent: Charles A. Laverty
Violation: Laverty concealed the loans from his firms and falsely stated on annual compliance questionnaires and on a heightened supervision attestation that he had not borrowed money from customers. Laverty also concealed the loans from FINRA and provided false on-the-record (“OTR”) testimony during a previous FINRA investigation into Laverty’s borrowing activity… Read More

Penalties: $5,000.00
Respondent: Richard Kyle Taylor
Violation: Taylor engaged in two outside business activities without providing prior written notice to the Firm, in violation of FINRA Rules 3270 and 2010… Read More

Penalties: $25,000.00
Respondent: Stifel, Nicolaus & Co., Inc.
Violation: Respondent’s registered representative entered 221 orders in ABCD on behalf of client accounts that he improperly marked as “unsolicited” despite the fact that such orders were solicited, causing Respondent’s books and records to be inaccurate. As a result, Respondent violated Section 17(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), Rules 17-a(3) and (4), thereunder, and NASD Rule 3110… Read More

Penalties: $15,000.00
Respondent: Don Traywick
Violation: From April 2012 to July 2014, Traywick recommended and effected 61 unsuitable short-term switches of Class A mutual fund shares in a customer’s accounts. Based on the foregoing, Traywick violated NASD Rule 2310 (for conduct before July 9, 2012), FINRA Rule 2111 (for conduct on and after July 9, 2012), and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Kevin S. Fitzpatrick
Violation: Fitzpatrick entered 221 orders in ABCD on behalf of client accounts that he improperly marked as “unsolicited” despite the fact that such orders were solicited, causing Respondent’s books and records to be inaccurate. As a result, Respondent violated NASD Rule 3110 and FINRA Rule 2010… Read More

Penalties: TBD
Respondent: Matthew Evan Eckstein
Violation: Sold over $1.3 million of “investments” that were neither described in any written materials nor memorialized in a note or other agreement. These undocumented investments appear to have been part of a spurious investment scheme run by KB, a close friend of Eckstein… Read More