Weekly Enforcement Action Tracker (Mar 25 – Mar 30)

Penalties: TBD
Respondent: Joseph Spera, et al.
Violation: schemed with former colleagues, posing as legitimate portfolio managers to induce investment bankers to bring them ”over the wall” and share nonpublic details about upcoming secondary offerings while agreeing not to disclose the information to others or trade before the offerings were announced. Spera and the others involved allegedly violated those agreements and tipped each other with confidential information that enabled them to trade for a profit ahead of public announcements, in violation of Section 17(a) of the Securities Act of 1933, Section 10(b)… Read More

Penalties: TBD
Respondent: REcoin Group Foundation. et al.
Violation: defrauding investors in a pair of so-called “Initial Coin Offerings” (“ICOs”) purportedly backed by investments in real estate and diamonds… Read More

Penalties: $950,000.00
Respondent: Kinross Gold Corporation
Violation: failed to maintain its internal accounting controls around contracting and awarded a lucrative logistics contract to a company preferred by government officials without following its own bidding and tendering procedures… Read More

Penalties: N/A
Respondent: SEC Complaint – Akorn, Inc., Timothy Dick, and David Hebeda
Violation: the company also disclosed that it overstated net revenue for 2014 by approximately 7 percent and income from continuing operations before income taxes for 2014 by approximately 136 percent. Akorn’s material weaknesses persisted over multiple reporting periods and contributed to Akorn’s materially inaccurate 2014 financial statements… Read More

Penalties: TBD
Respondent: Brian Hirsch, et al.
Violation: Illegally accepting more than $1 million in undisclosed kickbacks for giving certain customers preferential access to lucrative IPOs, enabling them to reap major trading profits in the secondary markets… Read More

Penalties: $50,000.00
Respondent: Timary Delorme
Violation: involved in a manipulative trading scheme with Izak Zirk Engelbrecht a/k/a Zirk De Maison (“Engelbrecht”), who was charged by the Commission on September 18, 2014, with, among other things, violating the antifraud and registration provisions of the federal securities laws… Read More

Penalties: $1,250,000.00
Respondent: Wedbush Securities Inc.
Violation: Wedbush failed reasonably to supervise one of its registered representatives, Timary Delorme (“Delorme”), who engaged in a manipulative trading activity of penny stocks over multiple years, as detailed below… Read More

Penalties: $2,949,991.00
Respondent: Maxwell Technologies, Inc., Can M. Andrews, David J. Schramm, and James W. DeWitt, Jr. CPA
Violation: engaged in an accounting fraud scheme that improperly recognized over $19 million in revenue from future quarters in violation of U.S. Generally Accepted Accounting Principles (“GAAP”)… Read More

Penalties: TBD
Respondent: Rio Tinto plc, Rio Tinto Limited, Thomas Albanese, and Guy Robert Elliott
Violation: fraud for inflating the value of coal assets acquired for $3.7 billion and sold a few years later for $50 million… Read More

Penalties: $75,869.50
Respondent: JH Darbie & Co., Inc. and Robert Y. Rabinowitz
Violation: properly compute and report its net capital. As a consequence, from September 2015 through July 2016 (the “Relevant Period”), JH Darbie operated with a net capital deficiency and violated net capital reporting and books and records provisions… Read More

Penalties: TBD
Respondent: Eugene Terracciano
Violation: Anti-money laundering (“AML”) compliance failures at Aegis Capital Corporation (“Aegis” or “the firm”) by Eugene Terracciano (“Terracciano”), who served as the firm’s AML Compliance Officer (“AML CO”) from September 2013 to approximately September 2015… Read More

Penalties: N/A
Respondent: SEC Complaint – DaRayl D. Davis & Affluent Advisory Group, LLC
Violation: A fraudulent securities offerings and a Ponzi-like scheme conducted by DaRayl D. Davis, a former securities industry professional who has held himself out to be an investment adviser and life coach… Read More

Penalties: TBD
Respondent: Darayl D. Davis & Affluent Advisory Group, LLC
Violation: A fraudulent securities offerings and a Ponzi-like scheme conducted by DaRayl D. Davis, a former securities industry professional who has held himself out to be an investment adviser and life coach. Davis raised more than $5 million from approximately 30 investors by selling them fictitious financial products described as “corporate bond notes” and “guarantee bonds… Read More

Penalties: $750,000.00
Respondent: Aegis Capital Corporation
Violation: From at least late 2012 through early 2014, Aegis, a registered broker-dealer, failed to file Suspicious Activity Reports (“SARs”) on hundreds of transactions when it knew, suspected, or had reason to suspect that the transactions involved the use of the broker-dealer to facilitate fraudulent activity or had no business or apparent lawful purpose… Read More

Penalties: N/A
Respondent: Memorandum Opinion & Order – Nauman A. Aly
Violation: Aly fraudulently manipulated the price of publicly-traded securities by placing false information on the SEC’s public database, EDGAR… Read More

Penalties: TBD
Respondent: Nauman A. Aly
Violation: Made $425,000 manipulating the price of Integrated Device Technology (IDT) securities by filing a false tender offer on the SEC’s EDGAR system… Read More

Penalties: $60,000.00
Respondent: Kevin Mckenna & Robert Eide
Violation: Anti-money laundering (“AML”) compliance failures at Aegis Capital Corporation (“Aegis” or “the firm”), a registered broker-dealer: Kevin McKenna (“McKenna”) who served as the firm’s AML Compliance Officer (“AML CO”) from June 2012 to mid-2013 and Robert Eide (“Eide”), who serves as the firm’s Chief Executive Officer (“CEO”)… Read More

Penalties: TBD
Respondent: Howard B. Present
Violation: From August 2008 to September 2013, Present made materially false and misleading statements about the AlphaSector strategy, the flagship product of F-Squared, and its advertised performance. Present falsely claimed that 2 AlphaSector’s advertised performance was based on the actual performance of real clients’ investments when in fact, the performance had been back-tested; further, the advertised performance was substantially overstated due to a calculation error… Read More

Penalties: N/A
Respondent: Kent Maerki
Violation: From May 2012 through October 2014 Respondent engaged in securities fraud, acted as an unregistered broker or dealer, and offered and sold securities in unregistered transactions, in connection with a $12.5 million securities offering fraud orchestrated by Respondent and David Alcorn (“Alcorn”), through Janus Spectrum… Read More

Penalties: TBD
Respondent: AriseBank, Jared Rick Sr., and Stanley Ford
Violation: Rice, Ford, and AriseBank are alleged to have offered and sold investments in their purported “AriseCoin” cryptocurrency to investors in the United States and elsewhere. The SEC alleges that since November 2017, AriseBank has failed to register the ICO and enticed investment through a celebrity endorsement from Evander Holyfield and demonstrably false claims… Read More

Penalties: N/A
Respondent: SEC Complaint – AriseBank, Jared Rick Sr., and Stanley Ford
Violation: Rice, Ford, and AriseBank are alleged to have offered and sold investments in their purported “AriseCoin” cryptocurrency to investors in the United States and elsewhere. The SEC alleges that since November 2017, AriseBank has failed to register the ICO and enticed investment through a celebrity endorsement from Evander Holyfield and demonstrably false claims… Read More

Penalties: TBD
Respondent: Kirbyjon Hines Caldwell and Gregory Alan Smith
Violation: The Commission brings this action to enjoin Kirbyjon Hines Caldwell (“Caldwell”) and Gregory Alan Smith (“Smith”) ( collectively “Defendants”) from further violations of the registration and antifraud provisions of the federal securities laws by offering and selling participation rights in certain historical Chinese bonds (the “bonds”) to mostly vulnerable and elderly investors, some of whom liquidated their annuities to invest in this scheme… Read More

Penalties: $60,000.00
Respondent: Kirbyjon Hines Caldwell
Violation: The Securities and Exchange Commission charged the pastor of one of the largest Protestant churches in the country and a self-described financial planner in a scheme to defraud elderly investors by selling them interests in defunct, pre-Revolutionary Chinese bonds… Read More

Penalties: TBD
Respondent: Shae Yatta Harper
Violation: The Commission brings this action to enjoin Shae Yatta Harper (“Harper”) from further violations of the registration provisions of the federal securities laws and from aiding and abetting violations of the antifraud provisions of the federal securities laws… Read More

Penalties: $7,575,000.00
Respondent: Logitech International, S.A., Michael Doktorczyk and Sherralyn Bolles, CPA
Violation: Recurring instances of improper accounting between 2008 and 2013 related to a product write-down, warranty liabilities, and revenue recognition. The Commission further found Doktorczyk and Bolles, both former officers of Logitech, responsible for the improper accounting for warranty liabilities, which occurred during their employment… Read More

Penalties: N/A
Respondent: Cody Michael Rock
Violation: Rock failed to produce any of the documents or information requested by the December 4, 2017, deadline. On March 9, 2018, counsel for Rock informed FINRA that Rock will not produce any of the requested documents or information. As stated in his counsel’s phone call with FINRA staff on March 9, 2018, and by this agreement, Rock acknowledges that he received FINRA’s request and will not produce the information requested…Read More

Penalties: $2,500.00
Respondent: Lisa C. Piazza
Violation: Piazza willfully failed to amend her Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to disclose that she had been charged with two misdemeanors and later pled “no contest” to one of the misdemeanor charges, in violation of Article V, Section 2 of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: N/A
Respondent: Holly Florence Arbuckle
Violation: Arbuckle refused to appear for testimony in response to a FINRA staff request made pursuant to FINRA Rule 8210, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Lawrence J. Fawcett Jr.
Violation: Fawcett failed to produce documents and information, and failed to appear for on-the-record testimony, in response to FINRA Rule 8210 requests, in violation of FINRA Rules 8210 and 2010…Read More

Penalties: N/A
Respondent: Sanders L. Spangler
Violation: By refusing to appear for on-the-record testimony as requested pursuant to FINRA Rule 8210, Spangler violated FINRA Rules 8210 and 2010… Read More

Penalties: $6,054.33
Respondent: Mark Ketner
Violation: Between August 2015 and January 2017, Ketner engaged in an unsuitable pattern of short-term trading of Unit Investment Trusts (“Ms”) in connection with the accounts of 14 customers. Based on the foregoing, Kehler violated FINRA Rules 2111 and 2010… Read More

Penalties: N/A
Respondent: Matthew Singer
Violation: In 2016, FINRA commenced an investigation into whether Singer and others made unsuitable options recommendations to customers. On March 12, 2018, FINRA staff sent a request to Singer (through his counsel) for on-the-record testimony pursuant to FINRA Rule 8210…Read More

Penalties: $5,000.00
Respondent: Robert Mark Malbasa
Violation: Malbasa failed to timely update his Form U4 to disclose 11 liens filed against him between 2008 and 2014 by the Internal Revenue Service and the State of Ohio. As a result, Malbasa violated Article V, Section 2 of FINRA By-Laws, FINRA Rules 1122 and 2010, and NASD Rule 2110… Read More

Penalties: $550,000.00
Respondent: Aegis Capital Corp.
Violation: Between January 2012 and April 2014 (the “Relevant Period”), Aegis failed to establish and implement an anti-money laundering (“AML”) program reasonably designed to detect and investigate certain “red flags” indicative of potentially suspicious transactions in delivery versus payment/receive versus payment (“DVP”) accounts… Read More

Penalties: N/A
Respondent: David Warren Olson
Violation: After initially cooperating with FINRA’s investigation, in 2018 Respondent refused to provide certain documents and information in response to FINRA Rule 8210 requests in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $12,500.00
Respondent: William Patrick Slattery
Violation: Between November 2015 and April 2016, Slattery engaged in outside business activities without providing notice to his Firm, in violation of FINRA Rules 3270 and 2010. Slattery also failed to amend his Uniform Application for Securities Industry Registration or Transfer (“Form U4”) to disclose a state tax warrant. By virtue of this conduct, Slattery violated Article V, Section 2(c) of FINRA’s By-Laws, and FINRA Rules 1122 and 2010… Read More

Penalties: $4,978.82
Respondent: Richard Gomez
Violation: Gomez sold securities away from his member firm without providing the firm prior written notice, in violation of NASD Rule 3040 and FINRA Rule 2010. We find also that Gomez recommended securities to investors, without a reasonable basis as to the suitability of those securities, in violation of NASD Rule 2310 and FINRA Rule 2010… Read More

Penalties: $100,000.00
Respondent: Portfolio Resources Group, Inc.
Violation: “PRG violated FINRA Rules 3310(a) and 2010 by failing to establish and implement policies and procedures reasonably designed to detect and cause the reporting of potentially suspicious transactions. Specifically, the firm failed to identify, and in some cases, to document its detection and investigation/due diligence, of potentially suspicious transactions involving customer accounts that engaged primarily in high levels of money movements with little or no corresponding securities transactions… Read More