Financial Enforcement Actions | Week of May 22 to May 28

Penalties: N/A
Respondent: Altria Group, Inc; JUUL Labs, Inc
Violation: JLI has significantly narrowed the number of documents for which it seeks in camera treatment. JLI’s motion seeks in camera treatment for fifteen of the exhibits for which JLI’s first request was denied without prejudice… Read More

Penalties: N/A
Respondent: Anthony J. Caine, Anish Parvataneni & LJM Funds Management Ltd, LJM Partners Ltd
Violation: From at least June 2016 through February 2018 (the “Relevant Period”), Defendants LJM Funds Management Ltd. and LJM Partners Ltd. (collectively “LJM”), both registered Commodity Pool Operators (“CPOs”) (LJM Partners Ltd. was also a registered Commodity Trading Advisor (“CTA”)), Anthony J. Caine (“Caine”) and Anish Parvataneni (“Parvataneni”), both registered Associated Persons of LJM, violated the Commodity Exchange Act (“CEA”) and CFTC Regulations (“Regulations”) by defrauding or deceiving prospective and existing pool participants through false and misleading statements or omissions concerning worst-case scenarios for LJM’s short options trading strategy and LJM’s risk management tools, or engaging in acts that operated as a fraud or deceit upon pool participants… Read More

Penalties: $247,444.00
Respondent: Arjuna A. Ariathurai
Violation: Respondent Ariathurai violated Section 4o(1)(A)-(B) of the Act because, as an AP of a CPO and CTA, his statements in the Risk FAQ and 2016 DDQ that potential worst-case daily losses from selling options could be limited to 20-40%, depending on the strategy were false and misleading. Respondent knew such misstatements were used by LJM to market commodity pool investment opportunities to prospective and existing pool participants. Moreover, Ariathurai knew, as CRO for a CPO/CTA, that LJM’s claims regarding use of historical scenarios in risk management were inaccurate and misleading and he knew LJM made such false and misleading statements to prospective and existing pool participants… Read More

Penalties: N/A
Respondent: William Edwards Ellis
Violation: In April 2021, Ellis violated FINRA Rules 8210 and 2010 by refusing to appear and provide on-the-record testimony requested pursuant to FINRA Rule 8210 in connection with Enforcement’s investigation of Ellis’s purchase of call options using funds provided by his friend and Firm customer… Read More

Penalties: $33,022.41
Respondent: Wilfredo Felix
Violation: Respondent failed to comply with FINRA Rule 8210 requests and falsified expense entries, causing his member firm to maintain inaccurate books and records and file inaccurate FOCUS reports… Read More

Penalties: N/A
Respondent: Laurence Allen; Michael Schunk & NYPEX LLC.
Violation: In obtaining the Order, the NYAG alleged that Allen had wrongfully transferred _dl[ijehiw ced[o out of ACP X and into NYPPEX Holdings and other entities that he owned or controlled… Read More

Penalties: $50,000.00
Respondent: Goldman Sachs & Co. LLC
Violation: During various time periods between January 2015, and June 2019, Goldman violated FINRA trade reporting rules. Goldman violated FINRA Rules 7230A(g)(2) and 2010 by failing to report timely to the FINRA/NASDAQ Trade Reporting Facility (FNTRF) 2,857 certain transactions effected pursuant to the exercise of an Over-the-Counter (OTC) option… Read More

Penalties: N/A
Respondent: William James Potter;
Violation: The Hearing Panel found that Potter, while acting as a third party to a real estate refinancing transaction between two other parties, violated FINRA Rule 2010 by (1) converting a portion of funds belonging to one party to the transaction and (2) misusing another portion of the funds and engaging in other unethical conduct… Read More

Penalties: $5,000.00
Respondent: Elvis Beslagic
Violation: Between September and November 2018, Beslagic violated FINRA Rule 2010 when he accessed a firm customer’s account, with the customer’s knowledge and consent, to trade on the customer’s behalf. Because Beslagic was not permitted to trade in customer accounts, he used the customer’s account login credentials to pose as the customer and conceal his role in the trades from TD Ameritrade. Beslagic coordinated the trades with the customer by text message using his personal device… Read More

Penalties: N/A
Respondent: Jeffrey Warren
Violation: In connection with FINRA’s investigation into a gift that Warren received from a former Oppenheimer customer, FINRA staff issued Warren a request for information and documents pursuant to FINRA Rule 8210. Warren refused to produce the information and documents, in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $170,000.00
Respondent: Wolverine Execution Services, LLC
Violation: Between May 2016 and March 2019, Wolverine violated Regulation SHO (Reg SHO) Rule 200(g), promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act), and FINRA Rule 2010, by inaccurately marking sell orders as long rather than short in 18,756 instances. The firm also violated Reg SHO Rule 203(b) and FINRA Rule 2010 by failing to document compliance with the locate requirement in 556,388 instances during February 2018… Read More

Penalties: $4,809,976.50
Respondent: Eric Pulier
Violation: The SEC’s complaint, filed September 27, 2017, alleged that Pulier, a former IT executive at Computer Sciences Corporation (CSC) and co-founder of ServiceMesh, Inc. (SMI), a cloud-computing company, paid more than $2 million in bribes to former executives at the Commonwealth Bank of Australia (CBA) in order to entice CBA to enter into contracts with CSC… Read More

Penalties: $20,000.00
Respondent: Nelson Gomes; Michael Luckhoo-Bouche; Shane Schmidt; Douglas Roe; Kelly Warawa & FFS Capital Limited; Paifang Trading Limited; Artefactor Limited; Atlantean Management Corporation; Meadow Asia Limited; Thyme International Limited
Violation: The Securities and Exchange Commission having filed a Complaint and Defendant Michael Luckhoo-Bouch (“Luckhoo-Bouch”) having entered a general appearance; consented to the Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint ( except as to jurisdiction and except as otherwise provided herein in paragraph IX); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment… Read More

Penalties: $12,915,750.00
Respondent: Michael Luckhoo-Bouch; Nelson Gomes
Violation: According to the Commission’s complaint, beginning around January 2018, Canadian citizen Nelson Gomes, working with Canadian citizen Luckhoo-Bouch and others, ran a fraudulent business through which corporate control persons could conceal their identities while illegally dumping their company’s stock into the market for purchase by unsuspecting investors… Read More

Penalties: N/A
Respondent: Harmel S. Rayat & Renova Care Inc.
Violation: The SEC’s complaint, filed in federal court in the Southern District of New York, alleges that in July 2017, Rayat arranged, and caused RenovaCare to pay for, a promotional campaign designed to increase the company’s stock price… Read More

Penalties: N/A
Respondent: Rich Pharmaceuticals, Inc
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: XSport Global, Inc
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: $247,444.00
Respondent: Arjuna Ariathurai
Violation: LJM’s short volatility trading strategy used margin to sell out-of-the-money put and call options on S&P 500 futures contracts. Similar to selling insurance, this option writing strategy carried risks that were remote but extreme. In various marketing documents, webinars, and communications with investors and their advisers, Respondent, LJM, and the portfolio managers emphasized LJM’s risk management practices and claimed LJM’s “managing principle” was to maintain a consistent risk profile and consistent risk levels… Read More

Penalties: N/A
Respondent: Stephen Michael Thompson
Violation: The Commission’s complaint alleged that, among other things, Respondent supervised securities solicitors without being registered with the Commission as a broker or being associated with any entity that was so registered as a broker… Read More

Penalties: N/A
Respondent: General Energy Resources & Technology Corp
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: Glacier Holdings, Inc. (n/k/a StyleMaster, Inc.)
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: International Technology Enterprises Ltd
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: Mediterranean Minerals Corp
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: Immune Pharmaceuticals Inc
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Comission’s Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: Rystar Communications Ltd
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: Spongetech Delivery Systems, Inc
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: George Heckler
Violation: The Commission’s complaint alleged, among other things, that, in connection with the purchase and sale of securities, Heckler, an associated person with Cassatt Partners and CV Partners, misused and misappropriated client funds; made materially false misrepresentations to investors; failed to state material facts necessary in order to make other statements made, in light of the circumstances under which they were made, not misleading; provided investors with false account statements indicating that investors’ funds were fully invested and earning positive returns; and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors in Cassatt and CV Special… Read More

Penalties: $238,434.00
Respondent: Mohammed A. Bari
Violation: According to the SEC’s complaint, Bari was a medical investigator for the clinical trial of KarXT, a drug developed by Boston-based Karuna Therapeutics, Inc. for treating patients with schizophrenia… Read More

Penalties: N/A
Respondent: Gemini Equipment Partners Income Fund X
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: Jin Wan Hong International Holdings Ltd
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: $2,551,421.00
Respondent: Kai Christian Peterson; Gil Berserglik; Raz Beserglik & Sharaga Holdings Ltd.; Lembex Global Investments Ltd.
Violation: Defendant is permanently restrained and enjoined from directly or indirectly, including but not limited to, through any entity he owns, operates, manages or controls, engaging in any activity for the purpose of: (a) inducing or attempting to induce the purchase or sale of binary options, securities-based swaps, or other securities, over the Internet or via email or other forms of electronic communication; (b) causing any person or entity to engage in any activity for the purpose of inducing or attempting to induce the purchase or sale of binary options, securities-based swaps, or other securities, over the Internet or via email or other forms of electronic communication; or (c) deriving compensation from any activity inducing or attempting to induce the purchase or sale of binary options, securities based swaps, or other securities, over the Internet or via email or other forms of electronic communication… Read More

Penalties: $300,296.00
Respondent: Kai Christian Peterson; Gil Beserglik; Raz Beserglik & Sharaga Holdings Ltd.; Lembex Global Investments Ltd.
Violation: Defendant is permanently restrained and enjoined from directly or indirectly, including but not limited to, through any entity he owns, operates, manages or controls, engaging in any activity for the purpose of: (a) inducing or attempting to induce the purchase or sale of binary options, securities-based swaps, or other securities, over the Internet or via email or other forms of electronic communication; (b) causing any person or entity to engage in any activity for the purpose of inducing or attempting to induce the purchase or sale of binary options, securities-based swaps, or other securities, over the Internet or via email or other forms of electronic communication; or (c) deriving compensation from any activity inducing or attempting to induce the purchase or sale of binary options, securities based swaps, or other securities, over the Internet or via email or other forms of electronic communication… Read More

Penalties: $5,498,941.00
Respondent: Kai Christian Petersen; Gil Beserglik and Raz Beserglik
Violation: According to the SEC’s complaint, filed on September 26, 2019, between October 2014 and August 2017, Kai Christian Petersen, Gil Beserglik and Raz Beserglik owned, controlled, and operated three unregistered binary option brokers named Bloombex Options, Morton Finance, and Startling Capital, which together defrauded U.S. and foreign investors out of tens of millions of dollars. According to the complaint, the brokers controlled by the defendants utilized call centers in Germany and Israel that operated as “boiler rooms,” in which salespersons used high pressure sales tactics to offer and sell speculative and fraudulent binary options to investors. Employees at these call centers allegedly lied about their names, locations and expertise in trading securities, and falsely told investors that the brokers only earned money if investors made money… Read More

Penalties: N/A
Respondent: Galea Life Sciences, Inc.,
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: N/A
Respondent: Digital Donations Technologies, Inc.
Violation: Respondent is delinquent in its periodic filings with the Commission, has repeatedly failed to meet its obligation to file timely periodic reports, and failed to heed a delinquency letter sent to it by the Division of Corporation Finance requesting compliance with its periodic filing obligations or, through its failure to maintain a 2 valid address on file with the Commission as required by Commission rules, did not receive such letter… Read More

Penalties: $1,276,781.00
Respondent: Randy R. King; Matthew B. King; Andrea S Trout & The Legacy Group Inc.; Colorado Ventures I; Radiant Holdings
Violation: According to the SEC’s complaint, filed in federal court in Colorado, the defendants raised money to fund residential and small-scale commercial real estate projects, primarily in California and Colorado. Legacy, the Kings, and Trout allegedly defrauded investors by raising money for specific projects and then using the funds on other projects… Read More

Penalties: N/A
Respondent: Roy Gagaza
Violation: The Commission’s complaint alleged that, from no later than March 2017 until June 2018, Gagaza offered and sold the securities of 1 Global, a merchant cash advance company based in Hallandale Beach, Florida, in unregistered transactions. The complaint alleged Gagaza offered and sold 1 Global’s securities to his advisory clients and other individuals via various means, including emails, telephone calls, dinner seminars, and in-person meetings, while not registered as a broker-dealer or associated with a registered broker-dealer. The complaint further alleged that Gagaza communicated with 1 Global about how to characterize and convey the features of the 1 Global investment, including the supposed safety and security of the investment… Read More

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