Weekly Enforcement Action Tracker (June 24 – June 29)

Penalties: TBD
Respondent: Hylan Asset Management, LLC
Violation: Running a scheme to collect money from consumers on fake and unauthorized debts… Read More

Penalties: N/A
Respondent: Kyusun Kim
Violation: Between 2008 and 2015, Kim made unsuitable recommendations to numerous senior customers that they concentrate their retirement assets and liquid net worth in speculative and illiquid securities, in violation of NASD Rules 2310 and 2110 and FINRA Rules 2111 and 2010… Read More

Penalties: $1,400,000.00
Respondent: Deutsche Bank Securities Inc.
Violation: During the period June 2006 to April 2017, the firm, due to systemic deficiencies, failed to have reasonable supervisory procedures in place that resulted in numerous OATS and equity trade reporting violations. Staff also determined that the firm violated municipal bond trading and other supervision requirements… Read More

Penalties: N/A
Respondent: Jason Taek Chong
Violation: In June 2018, Chong failed to provide information requested by FINRA staff pursuant to FINRA Rule 8210. Chong thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Brian S. Hyun
Violation: Between April and August 2016, while registered with FINRA through RBC, Hyun participated in two undisclosed outside business activities in violation of FINRA Rules 3270 and 2010… Read More

Penalties: N/A
Respondent: Taek Man Chong
Violation: In June 2018, Chong failed to provide information requested by FINRA staff pursuant to FINRA Rule 8210. Chong thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Melanie A. Melton
Violation: Failing to produce information and documents during an investigation, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $50,000.00
Respondent: G.C. Andersen Partners Capital, LLC
Violation: GC Andersen permitted JM to engage in activities requiring registration, including investment banking activities in connection with several Firm private placements, even though he was not registered with FINRA in any capacity, in violation of NASD Membership and Registration Rules 1031 and 1032 and FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Paul Higbee
Violation: In August and September 2016, during a FINRA examination of GC Andersen, Higbee submitted misleading documents and written responses to questions submitted to GC Andersen by FINRA Staff. These documents and responses concealed the full scope of the activities performed for GC Andersen by a statutorily disqualified person. As a result of this conduct, Higbee violated FINRA Rule 2010… Read More

Penalties: $10,000.00
Respondent: Xavier Patino
Violation: In 2014 and 2016, Patino made material misstatements to a customer and guaranteed the customer against loss in connection with a variable annuity purchase. On two separate occasions, at the customer’s request, Patino signed documents that purported to recite various guarantees regarding the customer’s variable annuity, including a guarantee of principal. Patino knew the representations were false. As a result of the foregoing, Patino violated FINRA Rules 2010 and 2150(b)… Read More

Penalties: N/A
Respondent: Jason Taek Chong
Violation: In June 2018, Chong failed to provide information requested by FINRA staff pursuant to FINRA Rule 8210. Chong thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Taek Man Chong
Violation: In June 2018, Chong failed to provide information requested by FINRA staff pursuant to FINRA Rule 8210. Chong thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $15,758.26
Respondent: Andrew Garrett Inc.
Violation: During the period June 17, 2013 to May 27, 2015 (the “Relevant Period”), Andrew Garrett charged customers excessive commissions on approximately 128 equity transactions. As a result, the Firm violated NASD Conduct Rule 2440 and NASD IM-2440-1 (for conduct before May 9, 2014), and FINRA Rules 2121 (for conduct on or after May 9, 2014) and 2010… Read More

Penalties: $5,000.00
Respondent: Dennis Anthony Contrestano
Violation: From October 4, 2017 to October 24, 2017, while associated with RBC, Contrestano executed six unauthorized transactions in one customer’s account. The customer did not provide verbal or written authorization for the trades. This conduct violated FINRA Rule 2010… Read More

Penalties: $509,949.00
Respondent: Gregg C. Lorenzo, Francis V. Lorenzo and Charles Vista, LLC
Violation: Accordingly, it is ORDERED that the Commission staff shall direct the payment of $509,949.00 from the Fair Fund in accordance with the Plan… Read More

Penalties: $5,108,441.27
Respondent: Wells Fargo Advisors, LLC
Violation: From at least January 2009 through June 2013, certain registered representatives at Wells Fargo Advisors, LLC (“WFA”) and its predecessor Wells Fargo Investments, LLC (“WFI”)2 improperly solicited customers to redeem their market-linked investments (“MLI”) early and purchase new MLIs without adequate analysis or consideration of the substantial costs associated with such transactions… Read More

Penalties: TBD
Respondent: James VanBlaricum, et al.
Violation: The defendants raised over $10 million by guaranteeing investment returns and promising investors that their funds would be used to drill oil wells. Instead, the defendants used investor money for a variety of personal expenditures, including luxury international vacations and wedding expenses… Read More

Penalties: TBD
Respondent: SEC Complaint – James VanBlaricum, et al.
Violation: From at least May 2013 through August 2016, Defendants defrauded hundreds of investors out of more than $10 million in connection with various securities offerings conducted for the purported purposes of drilling oil and gas wells and investing in leased mineral interests and drilling-related equipment… Read More

Penalties: $150,000.00
Respondent: Richard Weed et al.
Violation: Weed helped structure CitySide into a publicly traded company through reverse mergers, created backdated promissory notes and authored false legal opinion letters that enabled two co-conspirators to obtain millions of purportedly unrestricted shares of stock in the company… Read More

Penalties: $196,387.25
Respondent: Jon B. Schmidhammer
Violation: Schmidhammer violated Section 1707.44 of the Ohio Revised Code by engaging, as an investment adviser representative, in a course of business that operated as a fraud upon a person… Read More

Penalties: $300,000.00
Respondent: Bayes Capital, LLC
Violation: These proceedings concern Bayes Capital’s violations of Regulation SHO (“Reg SHO”) of the Exchange Act, in connection with its principal trading practices. As described more fully below, from August 2016 through December 2017, Bayes Capital repeatedly failed to satisfy Reg SHO’s order-marking, locate, and circuit breaker requirements for millions of short sales… Read More

Penalties: $37,611.90
Respondent: Curative Biosciences, Inc. f/k/a Healthient, Inc., William M. Alverson, Katherine West Alverson, and Steven G. Patton
Violation: Fraudulently misrepresenting that the company had issued company shares to third parties in purported compensation for services and in discharge of company debt when, in fact, the company issued the shares for capital raising purposes in violation of the offering registration requirements… Read More

Penalties: $200,000.00
Respondent: Aisling Capital LLC
Violation: The failure of venture capital fund adviser Aisling to offset consulting fees against the management fees paid by certain funds it advised, resulting in the funds paying $759,870 more in management fees than they should have paid… Read More

Penalties: TBD
Respondent: SEC Complaint – Pinto-Thomaz, et al.
Violation: This case involves insider trading by Pinto-Thomaz, Oujaddou, and Millul in advance of the March 20, 2016 announcement (the “Announcement”) that The SherwinWilliams Company (“Sherwin-Williams”) had agreed to acquire The Valspar Corporation (“Valspar”)… Read More

Penalties: $9,239.00
Respondent: Donato J. Dandreo III
Violation: From 2016-2017, Donato J. Dandreo made several misrepresentations to potential investors in his attempts to finance construction of residential homes through his real-estate development company Bounty Homes Corporation… Read More

Penalties: TBD
Respondent: Pinto-Thomaz, et al.
Violation: Tipping two friends about The Sherwin-Williams Co.’s confidential plans to acquire The Valspar Corp., which he learned of through his work… Read More

Penalties: $1,250,000.00
Respondent: Adam Mattessich and Joseph (a/k/a Jay) Ludovico
Violation: For more than 10 years, Joseph “Jay” Ludovico and another Cantor Fitzgerald trader used personal checks to pay a portion of their commissions to Adam Mattessich, the firm’s former global co-head of equities, and another trader… Read More

Penalties: $410,986.50
Respondent: Alexander Capital, L.P.
Violation: Alexander Capital failed to develop and implement reasonable supervisory policies and procedures for both reasonable basis and customer-specific suitability… Read More

Penalties: $20,000.00
Respondent: Philip A. Noto II
Violation: Respondent failed reasonably to supervise two registered representatives, (“RR1” and “RR2”) with a view to preventing and detecting their violations of the federal securities laws from approximately December 2012 through July 2014 while Respondent, RR1 and RR2 were each associated with Alexander Capital, L.P. (“Alexander Capital”), a registered broker-dealer… Read More

Penalties: $301,443.84
Respondent: Bruce A. Hauptman and Grand Teton Capital Management, LLC
Violation: These proceedings concern the misuse and misappropriation of private fund assets by investment adviser Bruce Hauptman and an investment adviser he owned and controlled, Grand Teton Capital Management, LLC (“GTCM”)… Read More

Penalties: TBD
Respondent: SEC Complaint – Donato J. Dandreo III
Violation: Dandreo, a professional real-estate developer in the northern suburbs of Boston, Massachusetts, misrepresented to potential investors that he had raised almost $1.5 million in 2016 and 2017 in his attempts to raise funds from the public markets in order to finance construction of residential homes. In reality, Dandreo raised no money at all… Read More

Penalties: $1,250,000.00
Respondent: Cantor Fitzgerald & Co.
Violation: From at least May 2012 to December 2013, Cantor willfully2 violated Section 17(a) of the Exchange Act and Rule 17a-3(a)(19) thereunder, which requires registered broker-dealers to make and keep current a record as to each associated person listing each purchase and sale of a security attributable, for compensation purposes, to that associated person, and the amount of the compensation received or, alternatively, to produce the required information promptly if requested by a representative of a securities regulatory authority… Read More

Penalties: $6,506,016.00
Respondent: THL Managers V, LLC and THL Managers VI, LLC
Violation: This matter arises from inadequate disclosures by private equity fund adviser THL regarding THL’s potential future receipt of lump sum fees from the portfolio companies of two THL-managed private equity funds launched in 2000 and 2006… Read More

Penalties: $3,600,000.00
Respondent: Morgan Stanley Smith Barney LLC
Violation: Failure to adopt policies and procedures reasonably designed to prevent MSSB personnel from misusing and misappropriating funds in client accounts… Read More

Penalties: TBD
Respondent: SEC Complaint – Adam Mattessich and Joseph (a/k/a Jay) Ludovico
Violation: This matter concerns a scheme by Defendants, both registered representatives (i.e., brokers) formerly employed by Cantor Fitzgerald & Co. (“Cantor”), to bypass the firm’s compensation-related procedures designed to comply with various tax and regulatory requirements… Read More

Penalties: $15,000.00
Respondent: Barry T. Eisenberg
Violation: Respondent failed reasonably to supervise a registered representative (“RR”) with a view to preventing and detecting the RR’s violations of the federal securities laws from approximately May 2013 through August 2014 while Respondent and the RR were both associated with Alexander Capital, L.P. (“Alexander Capital”), a registered broker-dealer… Read More

Penalties: TBD
Respondent: SEC Complaint – Curative Biosciences, Inc. f/k/a Healthient, Inc., William M. Alverson, Katherine West Alverson, and Steven G. Patton
Violation: Made materially false and misleading statements to the investing public in the Company’s 2013 Forms 10-K and 10-K/A (collectively “2013 10-Ks”) to conceal their unregistered sale of more than 33 million shares of the Company’s stock, the bulk of the proceeds of which they paid to themselves… Read More

Penalties: N/A
Respondent: Green Parts International, Inc., et al.
Violation: 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 December 31, 2015… Read More