Financial Enforcement Actions | Week of Mar 27 to Apr 02

Penalties: $10,000.00
Respondent: Raymond Alagao Velasco, Sr
Violation: In February 2017, Velasco submitted to LPL four termination letters that falsely represented that his customers were separated from their employment, inducing the firm holding the customers’ retirement accounts into waiving approximately $10,000 in surrender fees… Read More

Penalties: $5,000.00
Respondent: Jason V. McHenry
Violation: From October 2018 through November 2020, McHenry willfully failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose that he had been charged with three felonies, and subsequently pled guilty to one felony, in violation of Article V, Section 2(c) of FINRA’s By-Laws and FINRA Rules 1122 and 2010… Read More

Penalties: $5,000.00
Respondent: Candice E. Montie
Violation: Between April and June 2018, Montie participated in four private securities transactions without providing prior written notice to her broker-dealer, in violation of FINRA Rules 3280 and 2010… Read More

Penalties: $26,689.00
Respondent: Ignacio Erhart Del Campo
Violation: From November 1, 2013 to June 4, 2017, while associated with Northeast Securities, Erhart Del Campo exercised discretion in a customer’s account without written authorization in violation of NASD Rule 2510(b) and FINRA Rule 2010. After the customer’s June 4, 2017 death and unaware that the customer died, Erhart Del Campo continued to trade in the account. From June 9, 2017 to May 29, 2019, while associated with Northeast and Insigneo, he placed 77 unauthorized transactions in the account in violation of FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Jiacheng Zhou
Violation: Between January 2019 and March 2020, Zhou improperly used firm funds by submitting at least $8,643.60 of travel and meal expenses as business expenses in order to obtain reimbursement to which she was not entitled. By virtue of this conduct, Zhou violated FINRA Rule 2010… Read More

Penalties: $91,137.00
Respondent: Herbert G. Frey
Violation: During the period March 1, 2018 through February 28, 2019, while associated with Union Capital and Lincoln Douglas, Frey excessively traded a customer’s account (Customer 1) and placed unauthorized trades in Customer l’s account, in violation of FINRA Rules 2111 and 2010… Read More

Penalties: $10,000.00
Respondent: Jiacheng Zhou
Violation: Between January 2019 and March 2020, Zhou improperly used firm funds by submitting at least $8,643.60 of travel and meal expenses as business expenses in order to obtain reimbursement to which she was not entitled. By virtue of this conduct, Zhou violated FINRA Rule 2010… Read More

Penalties: $5,000.00
Respondent: Gordon Bryan
Violation: From September 2017 through September 2018, while associated with Wells Fargo, Bryan engaged in an outside business activity without providing prior written notice to the firm and subsequently exceeded the scope of his disclosed involvement in that outside business activity… Read More

Penalties: $450,000.00
Respondent: Merrill Lynch, Pierce, Fenner & Smith Incorporated
Violation: From on or about September 1, 2013 through approximately June 2016 (the Relevant Period), Merrill did not reasonably supervise certain types of public and private side employee communications under the firm’s policies and procedures, in violation of NASD Rule 3010 and FINRA Rules 3110 and 2010… Read More

Penalties: $5,000.00
Respondent: Colin Woolford
Violation: From January 2018 through June 2019, Woolford misused his corporate card by submitting $8,202.13 in personal expenses for reimbursement as business expenses in violation of FINRA Rule 2010. Prior to detection, Woolford self-reported his misconduct to Barclays, voluntarily repaid the firm $8,202.13, and fully cooperated with the firm’s internal investigation… Read More

Penalties: $285,000.00
Respondent: Ryan Carlson; Nicholas Cioffi & American Independent Securities Group, LLC
Violation: From October 2014 through April 2017, AISG and Carlson failed to (a) establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with applicable rules relating to sales of collateralized mortgage obligations (CMOs); (b) take reasonable action to ensure that Cioffi-the principal to whom Carlson had delegated responsibility for supervising Representative A and his CMO recommendations-was properly executing that responsibility; (c) reasonably respond to red flags indicating that Representative A’s CMO recommendations were unsuitable; and (d) reasonably supervise discretionary trading and accounts held by senior investors… Read More

Penalties: $3,534,354.82
Respondent: Cambridge Investment Research, Inc
Violation: Cambridge failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM). Cambridge permitted the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features, including the fact that the fund pursued a risky strategy that relied, in part, on purchasing uncovered options… Read More

Penalties: $213,527.00
Respondent: J.W. Cole Financial, Inc. AWCs (Letters of Acceptance, Waiver, and Consent)
Violation: Between May 2017 and December 2017, J.W. Cole failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM). J.W. Cole permitted the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features, including the fact that the fund pursued a risky strategy that relied, in part, on purchasing uncovered options… Read More

Penalties: $7,500.00
Respondent: Keith Holcomb
Violation: Holcomb violated FINRA Rules 3240 and 2010 by borrowing at least $31,420 from a customer without notifying or receiving approval from his member firm… Read More

Penalties: N/A
Respondent: CAROL J. WAYLAND
Violation: The Commission’s complaint alleged that, from at least May 2014 until March 2016, in connection with the sale of limited partnership interests, Wayland misappropriated investor funds, misled prospective and current investors with false promises of high returns and with false claims that Wayland had extensive experience managing oil and gas investment projects, and otherwise engaged in a variety of conduct that operated as a fraud and deceit on investors… Read More

Penalties: N/A
Respondent: Richard J. Randolph, III
Violation: The SEC’s complaint alleges that, since late 2015, Randolph raised more than $1.6 million from at least 14 investors whom Randolph persuaded to fund purported real estate and business projects. According to the complaint, Randolph fraudulently promoted these projects, including by using false financial statements based on fictitious assets and by making false claims about impending projects… Read More

Penalties: N/A
Respondent: Soupman, Inc; Trailblazer Resources, Inc
Violation: As of January 16, 2020, TBLZ had failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder because it had not filed any periodic reports with the Commission since the period ended September 30, 2017… Read More

Penalties: $5,196,641.00
Respondent: George S. Blankenbaker
Violation: According to the SEC’s complaint, between August 2016 and May 2019, Blankenbaker and his companies, StarGrower Commercial Bridge Loan Fund 1 LLC, StarGrower Asset Management LLC, and Blankenbaker Investments Fund 17 LLC, raised more than $11 million from at least 109 investors through the fraudulent offer and sale of securities… Read More

Penalties: $10,000.00
Respondent: Kevin R. Kuhnash; Jason P. Jimerson
Violation: The SEC previously charged Jimerson for his alleged role in a scheme to conceal that Lucent’s core business model was a sham in connection with the company’s acquisition by another manufacturer in 2013… Read More

Penalties: N/A
Respondent: Douglas E. Elstun
Violation: The SEC’s complaint alleges that from 2015 through 2018, Elstun fraudulently overcharged his advisory clients by charging undisclosed fees, including higher advisory fees than clients had agreed to pay, and by applying the advisory fee to non-advisory assets, including bank account balances, equity in homes and other real estate, and the value of vehicles, thereby increasing the fees charged to those accounts… Read More

Penalties: N/A
Respondent: LBRY, Inc
Violation: According to the SEC’s complaint, from at least July 2016 to February 2021, LBRY, which offers a video sharing application, sold digital asset securities called “LBRY Credits” to numerous investors, including investors based in the US… Read More

Penalties: N/A
Respondent: Edward F. Gobora
Violation: The Commission filed a civil action against Gobora alleging that he engaged in two fraudulent schemes between mid-1997 and April 2001. The first scheme involved “cherry picking” of short-term foreign exchange trades, with profitable trades allocated by Gobora to favored clients… Read More

Click here to see the full list of SEC Enforcement Documents

Penalties: N/A
Respondent: Kramer Duhon & Health Research Laboratories, LLC; Whole Body Supplements, LLC
Violation: The Complaint in this matter, issued November 13, 2020, alleges that Respondents “disseminated or caused to be disseminated advertising and promotional materials” for four supplements that the FTC contends were “not substantiated at the time the representations were made,” and that such unsubstantiated representations constitute deceptive advertising in violation of sections 5 and 12 of the FTC Act… Read More

Penalties: $110,513,843.00
Respondent: ROBERT WILLIAM BURLAND; RICHARD T. COLE; AMY BURLAND; BARBARA COLE; SCOT STEPEK; NIKOLE GILSTORF; ANTONIO G. LIA; JOHN LUCIDI & ASSOCIATED COMMUNITY SERVICES, INC; CENTRAL PROCESSING SERVICES, LLC; COMMUNITY SERVICES APPEAL, LLC; THE DALE CORP; DIRECTELE, INC
Violation: On January 26, 2021, the United States Federal Trade Commission, along with 38 states and the District of Columbia, commenced this civil action by filing a complaint alleging that the defendants illegally and deceptively procured tens of millions of dollars in bogus donations from hundreds of millions of Americans, through more than 1.3 billion unsolicited telephone calls… Read More

Penalties: $223,383,914.00
Respondent: ROBERT WILLIAM BURLAND; RICHARD T. COLE; AMY BURLAND; BARBARA COLE; SCOT STEPEK; NIKOLE GILSTORF; ANTONIO G. LIA; JOHN LUCIDI & ASSOCIATED COMMUNITY SERVICES, INC; CENTRAL PROCESSING SERVICES, LLC; COMMUNITY SERVICES APPEAL, LLC; THE DALE CORP; DIRECTELE, INC
Violation: On January 26, 2021, the United States Federal Trade Commission, along with 38 states and the District of Columbia, commenced this civil action by filing a complaint alleging that the defendants illegally and deceptively procured tens of millions of dollars in bogus donations from hundreds of millions of Americans, through more than 1.3 billion unsolicited telephone calls… Read More

Penalties: $110,088,843.00
Respondent: ROBERT WILLIAM BURLAND; RICHARD T. COLE; AMY BURLAND; BARBARA COLE; SCOT STEPEK; NIKOLE GILSTORF; ANTONIO G. LIA; JOHN LUCIDI & ASSOCIATED COMMUNITY SERVICES, INC; CENTRAL PROCESSING SERVICES, LLC; COMMUNITY SERVICES APPEAL, LLC; THE DALE CORP; DIRECTELE, INC
Violation: On January 26, 2021, the United States Federal Trade Commission, along with 38 states and the District of Columbia, commenced this civil action by filing a complaint alleging that the defendants illegally and deceptively procured tens of millions of dollars in bogus donations from hundreds of millions of Americans, through more than 1.3 billion unsolicited telephone calls… Read More

Penalties: $416,914.00
Respondent: BASF SE; BASF Corporation; DIEM Labs, LLC,
Violation: This matter involves Respondents’ advertising for Hepaxa and Hepaxa PD capsules containing omega-3 fatty acids. The Commission’s proposed complaint alleges that advertising for the Hepaxa products represented that Hepaxa reduces liver fat in most adults with Nonalcoholic Fatty Liver Disease (“NAFLD”) within six months, and that Hepaxa PD reduces liver fat in most children with NAFLD within six months… Read More

Penalties: $157,318.00
Respondent: Cai Berg; Tim Prince & DIEM Labs, LLC
Violation: The Commission considered the matter and determined that it had reason to believe that Respondents have violated the Federal Trade Commission Act, and that a Complaint should issue stating its charges in that respect…. Read More

Penalties: $259,596.00
Respondent: BASF SE; BASF CORPORATION;
Violation: The Commission considered the matter and determined that it had reason to believe that Respondents have violated the Federal Trade Commission Act, and that a Complaint should issue stating its charges in that respect… Read More

Penalties: N/A
Respondent: Illumina, Inc; GRAIL, Inc
Violation: As the only provider of a critical input into MCED tests, Respondent Illumina possesses multiple means of foreclosing or disadvantaging rivals to Respondent Grail. After the Acquisition, Respondent Illumina will have an increased incentive to disadvantage close competitors to Respondent Grail because the value of foregone NGS instrument and consumable sales to disadvantaged third-party MCED test developers will be offset by the gain in MCED testing revenue captured by Grail… Read More

Penalties: $2,600,000.00
Respondent: YINAN DU & BEAM FINANCIAL INC
Violation: The Complaint charges that Defendants participated in deceptive acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, by advertising a mobile banking application (the “Beam app”) with representations that consumers will have “24/7” access to their money, will have access to their money with “NO LOCKUP,” will have their withdrawn money returned to them in five or fewer business days, and will receive substantial interest rates, including base interest rates on their deposits of at least 0.2% or 1.0%… Read More