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On February 25, 2019, the SEC took action against against the operators of a South Florida investment fund and its principals. One principal had a felony record. The charges were filed  against Castleberry Financial Services Group LLC and its  president, T. Jonathon Turner and another officer, Norman M. Strell.

The SEC alleged that investors were defrauded  of $3.6 million.

The SEC alleged that Castleberry mis-represented to investors it had hundreds of millions invested in local  properties and businesses. High yields were offered, claiming that a large insurer, CNA and Chubb “bonded” the investments.  CNA and Chubb had no connection with Castleberry. CNA’s and Chubb’s logos were also misappropriated.

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FINRA Broker Check reports that a complaint, dated 26 February 2019, was filed against James Bradley Schwartz (“Schwartz”) (Disciplinary Proceeding. 201605170430), while associated with Aegis Capital Corp. (“Aegis” or the “Firm”). The Complaint by FINRA’s Division of Enforcement alleges that Schwartz and Aegis (a FINRA-regulated broker-dealer), churned and excessively traded the accounts of four customers from August 2014 through May 2016.

During that period, Schwartz purportedly executed approximately 535 trades in the customer accounts – resulting in annualized turnover rates ranging from 19.9 to 54.7, and annualized cost-to-equity ratios (or break-even points) ranging from 87% to 120%.

The FINRA Complaint further alleges that Schwartz’s churning and excessive trading was unsuitable, unauthorized and caused combined losses of more than $660,000 in these four customers’ accounts. At the same time, Schwartz’s trading generated gross sales credits and commissions of approximately $277,705, of which Schwartz received more than $194,000.

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A biotech company employee was charged today with insider trading by the SEC. The SEC alleged that the employee had foreknowledge of the withdrawal of certain products from consideration by the US Food and Drug Administration. Securities and Exchange Commission v. Joseph Frank Vacante, No. 19-civ-1616 (S.D.N.Y. filed Feb. 21, 2019)

Joseph Frank Vacante, formerly employed at Trinity Biotech, PLC agreed to pay more than $140,000 to settle the SEC’s charges.

The SEC alleged that, on September 29, 2016, Vacante learned that the FDA had recommended that Trinity withdraw two biotech drugs which Vacante identified as vital to the company. The SEC Complaint was dated September 2019.  The complaint alleged Vacante twice communicated with his broker on the same day in efforts to sell Trinity American Depository Receipts (ADRs).

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On February 14, 2019 and February 22, 2019, respectively, A federal district court in Securities and Exchange Commission v. Walter C. Little and Andrew M. Berke, Civil Action No. 1:17-CV-03536 (S.D.N.Y., filed May 11, 2017), entered judgments against two inside traders, a former law firm partner and his neighbor.

Profits of about $1 million were made with the stolen inside info.

The SEC alleged that Walter C. Little, an attorney, viewed confidential material on his law firm’s  computer network related to about 11 deals involving law firm clients. Little then purportedly  traded and tipped his neighbor, Andrew M. Berke. The Complaint stated that the reading occurred from February 2015 to February 2016.

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On February 7, 2019, the Securities and Exchange Commission (SEC) charged the owner of an online gaming company, Kizzang LLC, with fraudulently raising  $9 million from 50 individuals.

The SEC alleged that Robert Alexander represented  that investors would be returned 10 times capital invested and that Alexander had his own millions at stake in Kizzang, had made a $50 million charitable donation, and that he was the creator of a significant video game.

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History repeats itself.

In the booming 1920s, before regulation imposed by the New Deal, scamsters would literally form public corporations, go public and sell shares, based on fictitious businesses. Stock manipulators like Joe Kennedy would reap fortunes at a clip by selling shares after the public securities price of the shares was run up.. There were “pools” in which investors conspired to perpetrate this kind of fraud. A notable scam of the 1920s was the “Radio Pool,” in which crooked Wall Streeters would drive up RCA (the leading stock of the booming 1920s) stock, unload their shares for huge profits, then leave unwary investors with collapsed prices for RCA.

Now, even after 85 years of regulation by the SEC, it happened again.

Sea of Thieves Review - A Dip in the Shallow End ...We are investigating FINRA complaints against Victor Rigoni (CRD#4272056) for sale of unsuitable investments

According to FINRA’s Broker Check some customer complaints concern private Real Estate Investment Trusts and other non traditional products like oil and gas investments.

The recent claim against Rigoni is dated October 2018. The customer FINRA complaint states damages of $125,000 and is before FINRA for determination. Recovery is sought for funds lost in unsuitable investments among other claims.

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Former Senior Attorney at Apple Attorney Caught Insider Trading

On February 14, 2019 insider trading charges were advance against the Apple lawyer responsible for supervising insider trading at that company.    The charges were brought by the SEC.

As alleged, in house compliance attorney,  Gene Daniel Levoff (who formerly acted as Apple’s global head of corporate law and corporate secretary), was privy to insider information as to Apple’s quarterly earnings announcements. Levoff had a prime position who regularly reviewed Apple’s numbers prior to public release.

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Charles Ponzi hard at work above.

Scammers nailed for $1 billion in fines in Ponzi Ripoff

A Federal Court in Florida on January 24, 2019 ordered The Woodbridge Group of Companies LLC and its disgraced CEO Robert H. Shapiro to pay $1 billion in disgorgement and penalties.

Three penny-stock companies and their CEO – Cherubim Interests, Inc. (CHIT), PDX Partners, Inc. (PDXP), Victura Construction Group, Inc. (VICT), and Patrick Jevon Johnson  were the subject of an SEC action to enforce  subpoenas this week. SEC v. v. Cherubim Interests, Inc., PDX Partners, Inc., Victura Construction Group, Inc., and Patrick Jevon Johnson, No. 2:18-mc-00175 (C.D. Cal. filed December 21, 2018)

According to the SEC’s application as described in Litigation Release 24380 dated 26 December 2018,  on December 21, 2018 The SEC announced it sought enforcement of its subpoenas in the   U.S. District Court for the Central District of California.

The subject of the investigation is to determine whether individuals or entities engaged in a potential pump-and-dump scheme. The securities implicated were CHIT, PDXP, and VICT.