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On May 3, 2019 FINRA (The Financial Industry Regulatory Authority) published a Notice and Warning to member firms concerning fraudulent imposter broker websites, designed to fool investors into transmitting funds to thieves.

Anthony M. Abraham, Esq., PC has been involved in several cases in which impostor Websites were used to steal entire IRA accounts. In one case, an investor from Perth, Australia, called that he wired the entire balance of his retirement account to a broker in Hong Kong, who promised half price shares in the then new Alibaba IPO. The website was a fake; so were investment advisor internet listings for a purported “Investment Advisor” in New York State (the reason we were called in NYS). All funds were lost; the case could not ne pursued in the USA when the money was wired into Hong Kong, never to be seen again. The investor was wiped out.

FINRA therefore issued a Warning Notice to Member Firms.

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FINRA Broker Check reports Kalos Capital broker Eric Weschke is the subject of several customer disputes. (CRD# 2486324).

Weschke has been in the securities industry for 20 years and has been affiliated Kalos Capital in Long Island, New York since 2011.

According to FINRA, Weschke has been the subject of nine past customer complaints. Two complaints are pending. While at Kalos Capital, one customer alleged that Weschke recommended unsuitable investments, among other claims. $200,000 in damages have been demanded in the current complaint.

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On April 11, 2019, the SEC (Securities and Exchange Commission) charged two former directors of investments at Woodbridge Group of Companies LLC related to their participation in a massive Ponzi scheme. Ivan Acevedo and Dane R. Roseman, were charged, along with Robert H. Shapiro (who was Woodbridge’s owner).

Previously, a number of others, principally unregistered securities brokers, were charged.

In prior SEC charges, the SEC charged Woodbridge and Shapiro, and Woodbridge’s unlicensed brokers. A federal court in Florida in January 2019 ordered Woodbridge and Shapiro together to pay $1 billion for operating this Ponzi scheme.

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The SEC (Securities and Exchange Commission) advanced charges against former executives of Woodbridge Group. The total claim is $1.2 billion. Woodbridge engaged in an elaborate Ponzi, mostly against the elderly.

Ivan Acevedo and Dane R. Roseman, former directors of investments at Woodbridge, were charged for their roles in the scheme. Acevido and Roseman, were former controlling persons of Woodbridge

The criminal charges against them pend in Federal Court in Los Angeles.

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On April 9, 2019, the SEC (Securities and Exchange Commission) charged one of the former attorneys of SeaWorld Entertainment Inc. with insider trading. The “inside knowledge” was that the company’s revenue would be better than anticipated for the second quarter of 2018.

The allegations were than Paul B. Powers had revenue information as the company’s associate general counsel and assistant secretary. Based on the info, Powers purchased 18,000 shares of SeaWorld stock right after he received a confidential draft of the 2018 second quarter earnings, detailing strong  performance by Sea World.   Powers then sold his SeaWorld shares for approximately $65,000 in illicit profits.

“… Powers blatantly exploited his access to nonpublic information by misusing SeaWorld’s confidential revenue data to enrich himself,” said an SEC spokesman who continued.  “Investors should feel confident in the integrity of corporate officers, particularly attorneys…”

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The SEC (Securities and Exchange Commission) on April 2, 2019 charged the founder a Silicon Valley startup with defrauding investors in Jumio Inc. a private mobile payments company.

Former CEO, Daniel Mattes, agreed to pay more than $17 million to settle the charges.

The SEC’s complaint which was filed in federal court in California alleged that Mattes overstated Jumio’s 2013 and 2014 revenues,. then sold shares he owned to unrelated investors.

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$50 MILLION IN WHISTLEBLOWER AWARDS BY SEC

On March 26, 2019, the SEC (Securities and Exchange Commission) awarded $50 million to two whistleblowers. The information provided the basis for an enforcement action.

One Whistleblower received an award of $37 million; the other $13 million.

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BROKER NAILED FOR $250K. BROKER TIMARY DELORME FINED IN  PUMP AND DUMP.

The SEC  (Securities and Exchange Commission) (SEC) announced that Wedbush Securities Inc. will pay a $250,000 penalty and has agreed to be censured to settle its failure to supervise charge concerning a “pump and dump” scheme by its broker, Timary Delorme.

The SEC stated: “Wedbush ignored numerous red flags indicating that one of its registered representatives was involved in a long-running pump-and-dump scheme targeting retail investors. Wedbush conducted two flawed and insufficient investigations into the registered representative’s conduct, and failed to take appropriate action.”

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Two FINRA claims were filed involving Michael Fasciglione’s and National Securities Corporation. The claims allege suitability, breach of contract, breach of fiduciary duty, negligence, and/or churning.

The claims were settled for $525,000 and $80,000. FINRA reports of 6 other settled claims involving with prior brokerages.

Michael Fasciglione has been licensed with Aegis Capital Corp since September 2017; previously Fasciglione was licensed with National Securities Corporation. In December 2014, Fasciglione was suspended from the securities industry for 1 month and fined $5,000 by FINRA.

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On March 15, 2019, Talimco LLC, a registered investment adviser, and its former COO, Rodgers, were charged with manipulating the auction of a commercial real estate asset. One client’s asset was raided in a bid rigging scheme to sell the asset to a private affiliated client.

The asset was a commercial real estate asset sold in an alleged bidding process.

Talimco and Rogers owed its selling client a fiduciary duty to take steps to use its best efforts to maximize the price obtained for the asset. Rather than searching for competitive arms length offers, Rogers purportedly used the firm’s successful affiliated fund client for one bid, then convinced two other bidders to participate in the auction (who were actually shills who would underbid).