Financial Enforcement Actions | Week of October 07 to October 12

Penalties: TBD
Respondent: Passport Imports, Inc.
Violation: They mailed more than 21,000 fake “urgent recall” notices to consumers in 2015 and 2017, to lure them to visit dealerships… Read More

Penalties: N/A
Respondent: Kevin Peter Smith
Violation: In connection with its investigation concerning Smith’s termination from Morgan Stanley, certain actions he took while serving as trustee for the trust of a family member and Firm client, and discretionary trading in a Firm client’s account, FINRA’s Department of Enforcement (“Enforcement”) requested that Smith appear and provide testimony pursuant to FINRA Rule 8210. Smith has indicated that he will not appear and provide the requested testimony. By virtue of the foregoing, Smith violates FINRA Rules 8210 and 2010… Read More

Penalties: N/A
Respondent: Kevin Peter Smith
Violation: In connection with its investigation concerning Smith’s termination from Morgan Stanley, certain actions he took while serving as trustee for the trust of a family member and Firm client, and discretionary trading in a Firm client’s account, FINRA’s Department of Enforcement (“Enforcement”) requested that Smith appear and provide testimony pursuant to FINRA Rule 8210. Smith has indicated that he will not appear and provide the requested testimony. By virtue of the foregoing, Smith violates FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Sidney Joseph Dufresne, Jr.
Violation: Between June 2016 and May 2017, Dufresne sold more than $1.6 million in unapproved fixed indexed annuities to five individuals, two of whom were Firm customers. Dufresne’s actions violated FINRA Rules 3270 and 2010… Read More

Penalties: N/A
Respondent: Thomas A. Davis
Violation: For conversion and failure to appear for on-the-record testimony… Read More

Penalties: $5,000.00
Respondent: Jose Luis Paula
Violation: $5,000.00 This matter concerns Paula’s attempt to settle a customer complaint without informing or obtaining authorization from NYL in violation of FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Wilfred Rodriguez Jr.
Violation: FINRA staff conducted an investigation into allegations that Rodriguez, among other things, converted customers’ funds and concealed it by falsifying account documents with inflated account values. During the investigation, Rodriguez failed to produce documents and information requested by FINRA staff pursuant to FINRA Rule 8210 in violation of FINRA Rules 8210 and 2010… Read More

Penalties: $7,500.00
Respondent: John-Aaron Lenhert
Violation: Between December 2013 and September 2015 (the “Relevant Period”), Lenhert borrowed a total of $44,700 from three of his Firm customers (the “Loans”) without providing prior notice to, and receiving written approval from, the Firm, in violation of FINRA Rules 3240 and 2010. Lenhert also made misrepresentations to the Firm regarding the Loans in two annual compliance questionnaires and during the Firm’s internal investigation, in violation of FINRA Rule 2010… Read More

Penalties: N/A
Respondent: Larry Joe Templin
Violation: In 2018, Templin refused to provide information requested by FINRA staff pursuant to FINRA Rule 8210. Templin thereby violated FINRA Rules 8210 and 2010… Read More

Penalties: $5,000.00
Respondent: Steven John Sosnowski
Violation: In December 2016, Sosnowski forged a customer’s signature to open an insurance policy in the customer’s name without the customer’s knowledge or permission, thereby violating FINRA Rule 2010… Read More

Penalties: N/A
Respondent: John Halsey Buck III
Violation: Respondent violated FINRA Rules 8210 and 2010 in September 2018 by failing to provide documents and information requested in connection with an investigation concerning his potential involvement in certain unapproved private securities transactions. In response to a request for documents and information pursuant to F1NRA Rule 8210, Respondent stated through counsel that he would not provide the materials requested, and would not cooperate in the future… Read More

Penalties: $139,118.53
Respondent: William H. Murphy and William H. Murphy & Co., Inc.
Violation: Engaged in sales of unregistered, non-exempt securities and member firm and registered principal failed to establish and enforce an adequate supervisory system, including written supervisory procedures… Read More

Penalties: N/A
Respondent: Jeffre James and Saint James Holding and Investment Company Trust
Violation: The SEC made multiple attempts to contact James, extended its deadline for responding to the subpoenas several times, and personally served James with copies of the subpoenas… Read More

Penalties: $25,768,402.11
Respondent: Lawrence P. Schmidt, Commercial Equity Partners, Ltd, FutureGen Company (d/b/a FutureGen Capital), FGC Distressed Assets Investment #1, LLC; FutureGen Capital DDA CG Fund LLC; FGC Tax Lien Fund #2, LLC; FGC Trading Fund #1 LLC; FGC SPE NO 1 LLC; FGC SPE NO 2 LLC; and FGC CM Note Fund LLC
Violation: Schmidt defrauded investors by creating a web of seemingly legitimate companies, including Commercial Equity Partners, Ltd. and FutureGen Company, that were in fact simply designed to entice investment and conceal his misuse and commingling of investor funds… Read More

Penalties: $1,392,656.00
Respondent: FX & Beyond Corporation et al.
Violation: From 2007 to 2014, Karroum and his company defrauded investors in a foreign exchange trading program… Read More

Penalties: TBD
Respondent: SEC Complaint; – Ross B. Shapiro, Michael A. Gramins and Tyler G. Peters
Violation: Beginning in or about January 2010 through in or about November 2013, Shapiro, Gramins, and Peters repeatedly lied to, or otherwise misled, customers about, among other things, the prices at which Nomura had bought and/or sold RMBS and MHABS and the amount of the firm’s compensation for arranging the trades. Shapiro, Gramins, and Peters also misled customers about whether they were getting the best price for their RMBS and MHABS trades and how much money they were paying Nomura in compensation… Read More

Penalties: TBD
Respondent: Ross B. Shapiro
Violation: In connection with the sale of RMBS at Nomura, Respondent repeatedly made materially misleading statements to customers about, among other things, the prices at which Nomura had bought and/or sold RMBS and the amount of the firm’s compensation for arranging the trades… Read More

Penalties: $1,416,471.00
Respondent: Dennis Wayne Hamilton
Violation: Hamilton earned illegal profits by trading in Harman securities based on nonpublic information he obtained in the course of his employment, in advance of Harman’s earnings releases and other corporate disclosures… Read More

Penalties: $200,000.00
Respondent: Ross B. Shapiro, Michael A. Gramins and Tyler G. Peters
Violation: Shapiro made misrepresentations and omitted material information to investors in order to illicitly generate additional revenue for Nomura’s RMBS desk… Read More

Penalties: TBD
Respondent: Merrill, et al.
Violation: Merrill and Ledford stole at least $85 million of the investor funds to maintain lavish lifestyles, spending millions of dollars on luxury items… Read More

Penalties: TBD
Respondent: John Kevin Reech
Violation: From approximately 2008-09 and in 2011, he solicited investments in a number of private companies, including Omni Guard, Infinity Diamonds, Infinity Direct Insurance (d/b/a Corvina Holdings), Wheat Capital Management, and Wheat Self-Storage Partners I, II, and III… Read More

Penalties: TBD
Respondent: Blockvest, LLC and Reginald Buddy Ringgold, III a/k/a Rasool Abdul Rahim El
Violation: Blockvest and Ringgold, who also goes by the name Rasool Abdul Rahim El, were using the SEC seal without permission, a violation of federal law, and falsely claiming their crypto fund was “licensed and regulated.”… Read More

Penalties: N/A
Respondent: Americas Wind Energy Corporation, et al.
Violation: MGNU has 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 January 31, 2013… Read More

Penalties: TBD
Respondent: Susan Werth, a.k.a. Susan Worth, Corporate Mystic, LLC, Commercial Exchange Solutions, Incorporated, and Exchange Solutions Company
Violation: Werth and her companies did not fund any of the promised real estate projects and instead misused investor funds. Werth used forged bank statements to fraudulently assure investors that her companies had assets sufficient to guarantee the payments to investors, and she also concealed her criminal history and previous lawsuits against her for fraud… Read More

Penalties: $171,836.00
Respondent: Apex Fund Services (US), Inc.
Violation: Apex improperly classified the Withdrawals as receivables without evidence that the Managers were able or willing to repay the Withdrawals… Read More

Penalties: N/A
Respondent: Aurios Inc., et al.
Violation: AURZ has 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 September 30, 2014… Read More

Click here to see the full list of SEC Enforcement Documents