Articles Tagged with brokerfraud

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“Pump and Dump” schemes are not just the subject of episodes of the Sopranos. Nor are they limited to the unregulated 1920’s stock market in the USA commanded by Joe Kennedy. They persist in the here and now, made even more extreme through internationalization of markets, information and trading.

 On 20 June 2019 the SEC (Securities and Exchange Commission) published charges against five foreign traders for “matching” trades in Medico International, Inc. (MDDT) to artificially increase the price. Assets were frozen by the Court in the defendant’s brokerage accounts, inclusive of $144,000 slated for wiring offshore, and blocks of MDDT stock.

The SEC complaint stated that on 19 June 2019, traders from China, Singapore, and Malaysia attempted to artificially manipulate the price of MDDT. “Matched” orders to buy and sell MMDT at about the same times, sizes, and prices were implemented. The SEC complaint was filed in the US District Court for the Southern District of New York.

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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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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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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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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.

On December 19, 2018, the SEC announced additional charges against an additional 13 individuals and 10 companies for unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors.

Woodbridge collapsed into bankruptcy in December 2017. The SEC previously  charged the owner, the company and others of operating a $1.2 billion Ponzi scheme. Top sales agents were also accused.

The supplemental defendants, all 13, of selling more than $350 million of unregistered securities to about 4,400 investors. The defendants told the purchasers that the Notes were “safe” Investments.

“Churning” of a brokerage account occurs when a stock broker buys and sells stocks to generate commissions for himself without regard to the interests of the customer. It is the equivalent of theft.

In January 2018 a FINRA panel has awarded an investor the entire amount of the investor’s claim, $1.67 million in compensatory and punitive damages against her broker.

The specific legal claims were churning, unauthorized trading, unsuitable trading, breach of fiduciary duty and failure to supervise.

December 25, 2018

According to The Financial Industry Regulatory Authority (FINRA) former advisor Scott Kozak (Kozak). has been accused by his former firm and barred by FINRA over unapproved securities.  Kozak has four customer complaints on his record.

The charge was “selling away” securities, not approved by the broker Kozak was affiliated with. The activity occurred between July 2011 and March 2017. Kozak was associated previously with Cetera Advisors LLC (Cetera) in Highlands Ranch, Colorado.

A Ponzi scheme  is a financial scam where early investors are paid returns with money from later investors rather than legitimate investment returns. A big time Ponzi scheme occurred in Fla. recently. The most recent “huge Ponzi” was Bernard L. Madoff Securities, LLC, involving as much as $65 Billion. Well, this one was $1.2 Billion which is still bad enough.

A Villages, Florida, resident and four companies were charged in an enormous Ponzi scheme by the SEC for unlawfully selling securities of Woodbridge Group of Companies LLC to unsuspecting clients. The SEC previously charged the now bankrupt company, Knowles Systems, Inc., its principal and others with operating a  $1.2 billion Ponzi scheme.

One defendant is Lynette M. Robbins, a cosmetologist who lived with Theodore F. Leutz at 731 Evans Way in the Villages. The Wall Street Journal reported that Knowles Systems Inc. and Robbins, its chief executive and owner, was the highest earning agent for Woodbridge. A SEC report said she received at least $8.1 million in commissions. Other Florida-based defendants sold more than $243 million of its unregistered securities to about 1,600 retail investors.