Financial Enforcement Actions | Week of July 06 to July 12

Penalties: N/A
Respondent: Vision Solution
Violation: Defendants promised consumers that they could make thousands of dollars a month online if they bought business coaching and related services, which often cost over $10,000. Most people who bought the defendants’ services did not develop a functioning business, earned little or no money, and often ended up in debt… Read More

Penalties: N/A
Respondent: Reckitt Benckiser Group PLC
Violation: Defendant’s willful maintenance of its monopoly through a course of anticompetitive conduct, including forcing the market to convert from Suboxone Tablets to Suboxone Film based on, inter alia, knowingly false claims related to patient safety, and submitting a meritless citizen petition to the FDA, constitutes an unfair method of competition in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a)… Read More

Penalties: N/A
Respondent: Elegant Solutions, Inc. (Mission Hills Federal)
Violation: Defendants have represented, directly or indirectly, expressly or by implication that: a. Consumers who purchase Defendants’ debt relief services will be enrolled in a repayment plan that will reduce their monthly payments to a lower, specific amount or have their loan balances forgiven in whole or in part; b. Most or all of consumers’ monthly payments to Defendants will be applied toward consumers’ student loans; or c. Defendants will assume responsibility for the servicing of consumers’ student loans. In truth and in fact, in numerous instances in which Defendants have made the representations were false or not substantiated at the time Defendants made them. Therefore, Defendants’ representations are false or misleading and constitute deceptive acts or practices in violation of Section 5(a) ofthe FTC Act, 15 U.S.C. § 45(a)… Read More

Penalties: N/A
Respondent: Richard Earl Cagle
Violation: Cagle refused to appear and provide on-the-record testimony requested by FINRA staff pursuant to FINRA Rule 8210. Through this conduct, Cagle violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Michael Richard Mackay
Violation: Mackay did not respond to requests for documents and information sent to him by FINRA staff pursuant to FINRA Rule 8210. Through this conduct, Mackay violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Vincent Joseph Storms
Violation: Respondent Vincent Joseph Storms falsified firm branch audit data, in violation of FINRA Rule 2010… Read More

Penalties: $55,000.00
Respondent: Citigroup Global Markets Inc.
Violation: During the period between January 4, 2010 and March 11, 2016 (the “Review Period”), the firm failed to report and inaccurately reported reportable listed options positions to the Large Options Position Reporting (“LOPR”) system in violation of FINRA Rule 2360(b)(5). LOPR data is used extensively by self-regulatory organizations to identify holders of large options positions who may be attempting to manipulate the market or otherwise violate securities rules and regulations. Thus, the accuracy of LOPR data is essential for the analysis… Read More

Penalties: $5,000.00
Respondent: Linda Sue Zara
Violation: From June 2017 to October 2017, Zara borrowed $44,292 from her Firm customer without providing prior notice to, or obtaining prior written approval from, Wells Fargo, in violation of FINRA Rules 3240 and 2010… Read More

Penalties: $15,000.00
Respondent: OTA, LLC
Violation: During the period January 2015 to February 2016 (the “Relevant Period”), in six instances the Firm had a fail-to-deliver position at a registered clearing agency and did not close out the fail by purchasing or borrowing securities of like kind or quantity within the required time frame, in violation of SEC Rule 204(a)(3). In four instances during the Relevant Period the Firm failed to exit the penalty box by purchasing securities of like kind and quantity as required, and in two of those four instances executed short sales in the security, in violation of SEC Rule 204(b)… Read More

Penalties: $5,000.00
Respondent: Traderfield Securities Inc.
Violation: For calendar years 2014, 2015 and 2016, Traderfield failed to have a system of supervisory control procedures which test and verify that its supervisory procedures were reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA rules. Further, the Firm failed to create reports of its testing and verification. As a result, Traded-1dd violated FINRA Rules 3120 and 2010. In addition, for the same calendar years, Traderfield failed to complete properly annual certifications of its compliance and supervisory processes in violation of FINRA Rules 3130 and 2010… Read More

Penalties: $5,000.00
Respondent: Jonathon Hartwig
Violation: Hartwig failed to notify UBS of and amend his pending Form U4 to reflect certain material information he was required to report. In addition, Hartwig provided a false response about the same information on an attestation he submitted to UBS. As a result, Hartwig violated FINRA By-Laws Art. V, Sect. 2(c) and FINRA Rules 1122 and 2010… Read More

Penalties: $5,000.00
Respondent: Dennis Carey Ward
Violation: Between approximately September 15, 2010 and April 30. 2018. Ward received notice of 19 separate tax liens, with a total value of $ 147,890 , filed against him by either the IRS or Commonwealth of Pennsylvania, each of which he was required to disclose on his Form U4 within 30 days of receiving notice of the lien. Ward willfully failed to timely disclose these liens on his Form U4 thereby violating Article V, Section 2 of FINRA’s BY-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: $473,000.00
Respondent: Clearpool Execution Services, LLC
Violation: From July 2014 to September 2016, Clearpool executed Fund X’s trades and introduced its order flow to other broker-dealers for execution. Fund X traded through more than 1,000 foreign, unregistered individual traders, and triggered thousands of surveillance alerts at FINRA and multiple exchanges for potentially manipulative trading known as “layering” and “spoofing.” Despite being on notice of potentially manipulative trading by Fund X, Clearpool terminated the trading access of hundreds of individual traders, but continued to execute and introduce orders from Fund X. As a result, from July 2014 through September 2016, Clearpool failed to establish and maintain a system that was reasonably designed to achieve compliance with applicable securities laws and regulation and applicable FINRA rules. Thus, it violated NASD Rule 3010(a) (before December 1, 2014) and FINRA Rule 3110(a) (on and after December 1, 2014),3as well as FINRA Rule 2010… Read More

Penalties: $7,500.00
Respondent: John Hardin Alexander
Violation: From approximately January 2014 through February 2017 (the “Relevant Period-‘), Alexander violated NASD Rule 2510(b) and FINRA Rule 2010 when he exercised discretionary trading authority and effected approximately 80 trades in two accounts of his Firm customer without having obtained prior written authorization from the customer or approval from Raymond James to treat the accounts as discretionary. Alexander also marked all 80 of his discretionary trades as “solicited” or “unsolicitedinstead of “discretionary,” thereby causing his Firm to maintain inaccurate books and records in violation of violation of Section 17(a) of the Securities Exchange Act or l934 (“SEA”) and Rule 17a-3 promulgated thereunder. By causing Raymond James to maintain inaccurate books and records, Alexander violated FIN RA Rules 4511 and 2010… Read More

Penalties: $93,125.00
Respondent: Aegis Capital Corp.
Violation: During the period of August 2012 through July 2015 (the “Relevant Period”), the Firm violated FINRA Rules 5110 and 2010 in connection with various public offerings. In addition, during the Relevant Period, the Firm violated SEC Rule 101 of Regulation M (“Reg M”), FINRA Rule 5190, and FINRA Rule 2010 in connection with various offerings. Lastly, during the Relevant Period, the Finn failed to establish and maintain a reasonable supervisory system, including reasonable written supervisory procedures (“WSPs”), to achieve compliance with FINRA Rule 5110, Reg M, and FINRA Rule 5190. In light of the foregoing, the Firm violated FINRA Rule 5110, Reg M, FINRA Rule 5190, NASD Rules 3010(a) and (b) (for conduct prior to December 1, 2014), FINRA Rules 3110(a) and (b) (for conduct on and after December 1, 2014), and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Dennis Carey Ward
Violation: “Between approximately September 15, 2010 and April 30. 2018. Ward received notice of 19 separate tax liens, with a total value of $147.890. filed against him by either the IRS or Commonwealth of Pennsylvania, each of which he was required to disclose on his Form U4 within 30 days of receiving notice of the lien. Ward willfully failed to timely disclose these liens on his Form thereby violating Article V, Section 2 of FINRA’s BY-Laws and FINRA Rules 1122 and 2010″… Read More

Penalties: N/A
Respondent: Nancy Kimball Mellon
Violation: Respondent converted $4,300 from her employer firm by submitting false expense reports, causing the firm to maintain inaccurate books and records. Respondent provided false and misleading information to FINRA during an investigation into her expense reports… Read More

Penalties: $100,000.00
Respondent: BNP Paribas Securities Corp.
Violation: During the period from December 2011 through February 2014, BNP Paribas failed to report to the FINRA/Nasdaq Trade Reporting Facility (“FNTRF”) approximately 676 transactions effected pursuant to the exercise of an Over-the-Counter (“OTC”) option, and during the period from January 2015 through December 2016, the Firm failed to timely report to the FNTRF approximately 564 transactions effected pursuant to the exercise of an OTC option… Read More

Penalties: N/A
Respondent: George McElroy
Violation: Between April 2017 and October 2017 (the “Relevant Period”), McElroy willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to disclose two tax liens totaling $29,848.05 in violation of Article V, Section 2(c) of the FINRA By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: N/A
Respondent: Roman A. Corona
Violation: Corona refused to appear for on-the-record testimony as requested pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $686,017.00
Respondent: Jovannie Aquino
Violation: Jovannie Aquino, formerly a registered representative associated with broker-dealer Windsor Street Capital, L.P., f/k/a Meyers Associates, L.P., defrauded seven retail customers by recommending a series of frequent, short-term trades which generated large commissions for Aquino at the expense of his customers… Read More

Penalties: $10,231,157.00
Respondent: Visium Asset Management
Violation: From at least July 2011 to December 2012, Visium, through two of its portfolio managers, engaged in a mismarking scheme, using sham broker quotes to falsely inflate the value of securities held by the Credit Fund, for which Visium acted as investment adviser. As a result, the Credit Fund reported falsely inflated returns, overstated its net asset value (“NAV”), misclassified certain distressed assets, and overpaid performance and management fees… Read More

Penalties: N/A
Respondent: Paul Douglas Vandivier
Violation: Between approximately February 2013 through mid-2015, Vandivier managed a sales team that solicited investors for Aegis Oil, LLC (“Aegis”) and 7S Oil & Gas, LLC (“7S”), through his now defunct company, Aegis Marketing, Inc. (“Aegis Marketing”), and offered and sold securities in connection with the respective offerings. Vandivier hired and managed all of the sales people who worked for him, and trained sales agents on how to sell the investment opportunities… Read More

Penalties: N/A
Respondent: Thomas H. Laws, CPA
Violation: From at least August 2016 through February 2018, Santa Fe transferred directly to Laws and an entity he controlled approximately $1.1 million of investors’ funds for various corporate purposes, including the purchase of a silver mine, the acquisition of mining claims, the purchase of mining equipment, and for third party services to the company. Rather than use the funds for corporate purposes, Laws misappropriated these funds and attempted to hide his theft by fabricating documents, including by forging vendor invoices, agreements, bank records, communications, and signatures. Because Laws misappropriated investor funds, he knew that multiple Santa Fe periodic reports filed with the Commission, each of which were signed and certified by Laws, were materially false and misleading… Read More

Penalties: N/A
Respondent: Fidelity Transfer Services, Inc.; Ruben Sanchez
Violation: For the years 2010 through 2018, Fidelity has filed TA-2s for only seven of those nine years. Two years—2014 and 2018—are missing entirely. Of the seven years that were filed, four (2011, 2012, 2015, and 2016) were filed one to two years late. In each of its TA-2s, Fidelity also affirmed that no amendments to its TA-1 had been necessary in that reporting year. However, this statement was untrue from at least 2014, when Fidelity should have been required to update its principal address and/or telephone number. Therefore, Fidelity’s TA-2s in 2015, 2016, and 2017 included false statements of fact. All of Fidelity’s TA-2s were signed by Sanchez… Read More

Penalties: $1,486,953.44
Respondent: Jehu Hand, Esq.
Violation: Hand has been convicted of a felony within the meaning of Rule 102(e)(2) of the Commission’s Rules of Practice… Read More

Penalties: N/A
Respondent: Kimm C. Hannan
Violation: Hannan was convicted included, among others, multiple charges of engaging in fraudulent or illegal conduct by a party who is purchasing or selling securities in violation of Ohio Revised Code (“ORC”) 1707.44(G), and making false representations in connection with the sale of securities in violation of ORC 1707.44(B)(4). Hannan was also convicted of engaging in fraudulent and deceptive practices as an investment adviser representative… Read More

Penalties: N/A
Respondent: Barry Honig, et al.
Violation: Numerous individuals and associated entities participated in microcap schemes that generated over $27 million from unlawful stock sales. Maza and Keller participated in a fraudulent scheme with Honig, GRQ, and other members of an investor group with respect to a public company of which Maza and Keller were officers . Honig, GRQ, Maza, and Keller with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder… Read More

Penalties: N/A
Respondent: Kwen Y. Chun
Violation: From 2009 to 2014, Chun misappropriated client funds by, among other things, obtaining loans against clients’ insurance policies, or causing clients to obtain loans against their insurance policies, and diverting the funds to bank accounts that Chun had created and controlled in the names of firm clients or his relatives… Read More

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