Financial Enforcement Actions | Week of June 19 to June 25

Penalties: N/A
Respondent: Seven & i Holdings, Co., Ltd; 7-Eleven, Inc; Marathon Petroleum Corporation
Violation: The Federal Trade Commission initiated an investigation of the proposed acquisition by Respondent Seven & i Holdings Co., Ltd., through its wholly owned subsidiary, Respondent 7- Eleven, Inc., (collectively “7-Eleven”), of voting securities and non-corporate interest of 13 subsidiaries from Respondent Marathon Petroleum Corporation… Read More

Penalties: $20,000.00
Respondent: Christopher Betz
Violation: Pursuant to an offer of settlement in which Christopher Betz neither admitted nor denied the rule violations upon which the penalty is based, on June 21, 2021, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that on various dates between October 15, 2019, and January 15, 2020, Betz entered buy and sell orders in Soybean, Chicago SRW Wheat, and Corn futures contract markets that matched opposite each other for accounts owned by his employer… Read More

Penalties: $10,000.00
Respondent: Mark Van Keirsbilck
Violation: Pursuant to an offer of settlement in which Mark Van Keirsbilck neither admitted nor denied the rule violations upon which the penalty is based, on June 21, 2021, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on several occasions between September 1, 2019, and January 7, 2020, Van Keirsbilck entered and canceled orders in the December 2019, February 2020, April 2020, and June 2020 Live Cattle futures markets without the intent to trade… Read More

Penalties: $35,000.00
Respondent: Marquette Trading Partners LP
Violation: Pursuant to an offer of settlement in which Marquette Trading Partners LP (“Marquette”) neither admitted nor denied the rule violations upon which the penalty is based, on June 21, 2021, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on October 22, 2019, Marquette deployed an untested automated trading system (“ATS”) in the December 2019 Lean Hogs futures market… Read More

Penalties: $1,500,000.00
Respondent: Credit Suisse International; Credit Suisse Securities Europe Limited; Credit Suisse Capital LLC
Violation: Respondents were required to comply with certain reporting requirements related to their swap transactions. Since becoming provisionally registered SDs, Respondents failed to accurately report certain data to a swap data repository (“SDR”) under Part 45 of the Regulations, 17 C.F.R. pt. 45 (2020). Specifically, from at least January 10, 20132 to December 2018 (the “Relevant Period”), one or more Respondents submitted inaccurate daily valuation data for the majority of their equity swap transactions… Read More

Penalties: $125,000.00
Respondent: Cetera Advisor Networks LLC
Violation: Between October 2019 and July 2020, Cetera caused 26 registered representatives, whom the firm was recruiting, to take nonpublic personal customer information from the firms where the representatives were then registered and to disclose it to a third-party vendor without the other broker-dealers’ or the customers’ knowledge or consent, causing those broker-dealers to violate the SEC’s Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Information (Regulation S-P)… Read More

Penalties: N/A
Respondent: George Louis McCaffrey III
Violation: McCaffrey provided false information to FINRA during a prior investigation in violation of FINRA Rules 8210 and 2010. Additionally, McCaffrey violated 3280 and 2010 by participating in $270,000 of private securities transactions, without prior written disclosure to, and approval from, his employer member firm… Read More

Penalties: N/A
Respondent: Daniel Jossen
Violation: Beginning in April 2021, Jossen failed to provide information requested pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Michael Scott Farris
Violation: Farris failed to provide documents and information requested by FINRA pursuant to FINRA Rule 8210. By virtue of this misconduct, Farris violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Scott R. Mathews
Violation: Between January 1, 2011 and December 31, 2015, Mathews engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts (UITs) in customer accounts. Based on the foregoing, Mathews violated NASD Rule 2310 (for conduct before July 9, 2012), FINRA Rule 2111 (for conduct on or after July 9, 2012), and FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Nathan Gersteen Katz
Violation: Katz refused to provide FINRA with information and documents requested pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $11,687,223.00
Respondent: Merrill Lynch, Pierce, Fenner & Smith Incorporated
Violation: From January 2011 through December 2015, Merrill Lynch failed to establish and maintain a supervisory system that was reasonably designed to achieve compliance with FINRA’s suitability rule as it pertains to early rollovers of UITs. Merrill Lynch therefore violated NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on or after December 1, 2014), and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Kelly Wayne Feehrer
Violation: Between January 1, 2011 and December 31, 2015, Feehrer engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts (UITs) in customer accounts. Based on the foregoing, Feehrer violated NASD Rule 2310 (for conduct before July 9, 2012), FINRA Rule 2111 (for conduct on or after July 9, 2012), and FINRA Rule 2010… Read More

Penalties: $105,000.00
Respondent: Sidoti & Company, LLC
Violation: From March 31, 2018 through December 11, 2020, Sidoti published 2,202 research reports in which the firm failed to accurately disclose certain information required by FINRA Rule 2241(c). Specifically, Sidoti failed to disclose accurately: (1) investment banking and other compensation it received from companies in research reports covering those same companies; (2) it had acted as a co-manager for public offerings of securities issued by companies in research reports covering those same companies; and (3) the percentage of companies within each of the “buy,” “hold,” and “sell” rating categories for which the firm provided investment banking services. These disclosure issues resulted from Sidoti’s failure to establish and maintain a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with its research disclosure obligations… Read More

Penalties: N/A
Respondent: Cesar Gabriel Hernandez
Violation: In May 2021, FINRA sent Hernandez a request to appear for on-the-record testimony pursuant to FINRA Rule 8210. Hernandez has indicated, through counsel, that he will not appear to provide testimony to FINRA… Read More

Penalties: N/A
Respondent: Hung Brandon Ly
Violation: In April and May 2021, Ly failed to provide information and documents and to appear for testimony requested pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $2,500.00
Respondent: Danielle Matson
Violation: Between August 2017 and April 2019, Matson violated FINRA Rules 4511 and 2010 by entering false customer information into her member firm’s customer account profile system, thereby causing the fn-m to maintain inaccurate books and records in violation of §17(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 17a-3 thereunder… Read More

Penalties: N/A
Respondent: Arieh Israel
Violation: In June 2019, Israel accepted a blank, signed check from an insurance customer that was intended for the customer’s policy premium. Israel then completed the check by making it payable to himself for $3,229, deposited the check into his own personal bank account, and used the funds for his own personal benefit… Read More

Penalties: $5,000.00
Respondent: Robert Brandon Prettyman
Violation: Between January 2014 and March 2019, Prettyman reused customers’ signatures on approximately 25 customer-related documents, including account opening and transaction documents, and used correction fluid to alter signature dates and other information on certain of the documents. He then submitted those documents to the firm. Prettyman thereby violated FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Carlos A. Hurtado
Violation: Hurtado refused to provide on-the-record testimony pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Eric P. Burton
Violation: Between August 2016 and December 2016, Burton falsified documents that he submitted to LPL in connection with 22 variable annuity exchanges. As a result, Burton violated FINRA Rule 2010, and he separately violated FINRA Rules 4511 and 2010 by causing LPL to maintain inaccurate books and records… Read More

Penalties: $100,000.00
Respondent: Farmers Financial Solutions, LLC
Violation: From at least June 2016 through December 2018, Farmers Financial failed to establish and maintain a reasonably designed supervisory system to achieve compliance with applicable securities laws and regulations with respect to its VUL business. As a result of the foregoing, Farmers Financial violated FINRA Rules 3110(a) and 2010… Read More

Penalties: $22,764,287.00
Respondent: AMEC Foster Wheeler Limited
Violation: From 2012 through 2014, Foster Wheeler’s UK subsidiary, Foster Wheeler Energy Limited (“FWEL”) made improper payments to Brazilian officials in connection with efforts to win a contract with the Brazilian state-owned oil company, Petróleo Brasileiro S.A. – Petrobras (“Petrobras”)… Read More

Penalties: $653,827.00
Respondent: Nathaniel Brown; Benjamin Wylam; Naveen Sood; Marcus Bannon; Matthew Rauch; Naresh Ramaiya
Violation: According to the SEC’s complaint, Nathaniel Brown, who served as the revenue recognition manager for Infinera Corporation, repeatedly tipped Infinera’s unannounced quarterly earnings and financial performance to his best friend, Benjamin Wylam, from April 2016 until Brown left the company in November 2017… Read More

Penalties: N/A
Respondent: Philip N. Burgess, Jr., Walter Wojciechowski, and John Cook, Jr & Princeton Alternative Funding LLC; Microbilt Corporation
Violation: According to the SEC’s complaint, from March 2015 through February 2017, Defendants solicited investors to buy limited partnership interests in Princeton Alternative Income Fund, LP (PAIF), by: (1) misrepresenting and actively concealing the role of Burgess, a convicted felon, in the management of PAF; (2) making materially false statements about the ability of PAF and Microbilt to monitor PAIF’s investments in real time; (3) making materially false statements about the selection process for PAIF’s investments; and (4) making materially false and misleading statements about PAIF’s largest investor. The complaint also charges Microbilt, Burgess, and Wojciechowski with aiding and abetting PAF’s and Cook’s violations… Read More

Penalties: $50,000.00
Respondent: Songjiang “Sam” Wang
Violation: Both Wang and Chan were charged with insider trading by the U.S. Attorney’s Office for the District of Massachusetts and were criminally convicted after a jury trial. Wang was sentenced to six months of incarceration, and Chan was sentenced to thirty-six months of incarceration; both were also ordered to pay fines and restitution… Read More

Penalties: $6,513,192.82
Respondent: Gateway One Lending & Finance, LLC
Violation: From approximately July 2014 until December 2016 (the “Relevant Period”), Gateway gave investors false and misleading information about the performance of auto loans that were securitized in asset-backed securities offerings. For six of the securitizations it sponsored during the Relevant Period, Gateway gave investors, as well as the securitizations’ underwriters and ratings agencies, false and misleading data about the past performance of its auto loans… Read More

Penalties: $1,587,912.93
Respondent: Crown Capital Securities, L.P
Violation: These proceedings arise out of breaches of fiduciary duty by Crown Capital Securities, L.P., a dually-registered investment adviser and broker-dealer, in connection with its receipt of third-party compensation from client investments without fully and fairly disclosing its conflicts of interest… Read More

Penalties: N/A
Respondent: Joseph Geromini
Violation: The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Joseph Geromini, while he was the Chief Operating Officer of an earlystage medical devices company based in Philadelphia, Pennsylvania, lied to investors and stole over $200,000 raised during two 2018 securities offerings… Read More

Penalties: $329,163.92
Respondent: Asante K. Berko
Violation: Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 30A of the Securities Exchange Act of 1934… Read More

Penalties: N/A
Respondent: Ramiro Jose Sugranes & UCB Financial Advisers, Inc
Violation: According to the SEC’s complaint, which was filed under seal in federal court in the Southern District of Florida on June 10, 2021 and unsealed on June 17, 2021, since at least September 2015, defendants Ramiro Jose Sugranes, UCB Financial Advisers, Inc., and UCB Financial Services, Limited engaged in a scheme to divert profitable trades to two accounts believed to be held by Sugranes’ relatives and to saddle other clients with losing trades… Read More

Penalties: $208,912.00
Respondent: Guggenheim Securities LLC.
Violation: GS willfully violated Rule 21F-17 of the Exchange Act, which prohibits any person from taking any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation… Read More

Penalties: $7,644,372.40
Respondent: John Wise
Violation: From August 2017 to January 2018, Loci, a developer of a software platform called InnVenn, raised $7.6 million by offering and selling digital tokens called “LOCIcoin” through an unregistered and fraudulent initial coin offering (“ICO”). In promoting the ICO, Loci and its founder and Chief Executive Officer, Wise, made numerous materially false and misleading statements, touted the value of LOCIcoin to investors, highlighted their efforts to make LOCIcoin available for trading on digital asset trading platforms, and claimed that LOCIcoin would increase in price as a result of their efforts… Read More

Penalties: N/A
Respondent: Mark A. Miller
Violation: According to the SEC’s complaint, Miller hijacked or controlled at least seven defunct public issuers between September 2017 and April 2019. The complaint alleges that, over the course of the scheme, Miller purchased shares of the issuers on the open market, made false filings with the SEC and issued false press releases regarding his, or his nominees’, alleged role with five of the issuers… Read More

Penalties: $17,000,000.00
Respondent: Covia Holdings Corp; Fairmount Santrol Holdings Inc now known as Bison Merger Sub I, LLC
Violation: The Commission found that from 2014 to 2018, Fairmount, a provider of sand-based products used by oil and gas exploration and production companies for fracking, misled investors by overstating the performance and commercial potential of high-margin proppant products it was developing and selling, PowerProp, Propel SSP and Propel SSP 350… Read More

Click here to see the full list of SEC Enforcement Documents