SEC Charges Microsoft Manager Brian Jorgenson and his Friend Sean Stokke with Insider Trading

SEC v. Brian D. Jorgenson and Sean T. Stokke, Case No. 2:13-cv-02275 (W.D. Wash.).  On December 19, 2013, the SEC announced insider trading charges against Brian D. Jorgenson and Sean T. Stokke.  According to the SEC, Jorgenson got confidential information about upcoming company news because he worked in Microsoft’s corporate finance and investments division and tipped his friend Stokke.  The SEC alleges that Stokke traded before the public announcement that Microsoft planned to invest $300 million in Barnes & Noble’s e-reader business.  Continue reading

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SEC Obtains Emergency Relief against Robert Helms and Janniece Kaelin in Alleged Ponzi Scheme

SEC v. Robert A. Helms, et al., Case No. 1:13-cv-01036-LY (W.D. Tex.).  On December 6, 2013, the SEC announced it obtained an asset freeze and other emergency relief in an alleged Ponzi scheme.  According to the SEC, Robert A. Helms and Janniece S. Kaelin offered investments through Vendetta Royalty Partners, a business they controlled.  The offering documents provided to investors said that more than 99 percent of the investment funds would be used to buy profitable oil and gas royalty interests.  In reality, Helms and Kaelin invested only 10 percent of the proceeds and the returns on the investments were negligible.  The SEC alleges that Helms and Kaelin had Vendetta Royalty Partners make millions of dollars in so-called partnership income distributions to investors.  Continue reading

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SEC Charges Fifth Third Bancorp and its Former CFO Daniel Poston with Fraud for Accounting Practices during the Financial Crisis

In the Matter of Fifth Third Bancorp and Daniel Poston, Admin. Proc. No. 3-15635.  On December 4, 2013, the SEC announced it filed a Settled Administrative Order Instituting Proceedings (“OIP”) against Fifth Third Bancorp and its former CFO Daniel Poston.
According to the OIP, the problems in the real estate market caused Fifth Third to have more “non-performing assets” as borrowers became unable to repay their loans.  The SEC alleges that Fifth Third decided to sell many troubled loans but failed to classify them as “held for sale” and value them at fair value as required by the relevant accounting rules.  Continue reading

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SEC Settles Insider Trading Case against Charles Langston III

SEC v. Charles Raymond Langston III et al., Case No. 1:13-cv-24360 (S.D. Fla.)  On December 3, 2013, the SEC announced the filing of a settled insider trading case against Charles Raymond Langston III.  The SEC also charged his companies with illegal short selling.  According to the SEC, Langston got confidential information in advance of a public announcement that lowered the value of AutoChina International’s stock. Placement agents approached Langston about investing in a secondary offering of AutoChina.  After promising not to trade on the confidential information, Langston turned around and sold short 29,000 shares of AutoChina stock before the company announced completion of the secondary offering.  Continue reading

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SEC Settles Penny Stock Case Against Curt Kramer for $1.4 Million

In the Matter of Curt Kramer et al., Admin Proc. No. 3-15621.  On November 25, 2013, the SEC announced the filing of a settled Order Instituting Cease-and-Desist Proceedings(“OIP”) against Curt Kramer and his firms Mazuma Corporation, Mazuma Funding Corporation, and Mazuma Holding Corporation.  According to the OIP, Kramer and his firms obtained unregistered penny stock in Laidlaw Energy Group and Bederra Corporation.  The SEC alleges that with the Laidlaw transactions, Kramer tried to circumvent the registration provisions of the federal securities laws by relying on Rule 504 of Regulation D that allows certain companies to offer and sell up to $1 million in unregistered shares.  Continue reading

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SEC Charges Gary Snisky with Defrauding Elderly Investors

SEC v. Gary C. Snisky, Case No. 1:13-cv-03149 (D. Colo.).  On November 21, 2013, the SEC announced it charged Gary Snisky with defrauding elderly investors.  According to the SEC, Snisky targeted retired annuity holders by using insurance agents to sell interests in his company Arete LLC, which posed as a safe and more profitable alternative to an annuity.  The SEC alleges that Snisky raised $3.8 million from investors who used money from their IRAs or other retirement accounts to invest.  Snisky told investors that they could withdraw principal and earned interest with no penalty after 10 years and get guaranteed annual returns of 6 to 7 percent.  Continue reading

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SEC Charges Sam Miri with Insider Trading in Connection with the Galleon Trading Scheme

SEC v. Sam Miri, Case No. 13-cv-8324 (S.D.N.Y.).  On November 21, 2013, the SEC announced insider trading charges against Sam Miri, a former employee at Marvell Technology group for tipping inside information used in connection with Raj Rajaratnam’s insider trading scheme.  According to the SEC, Miri provided confidential financial information about Marvell to Ali Far who was a former Galleon portfolio manager.  Far used the nonpublic information to trade Marvell securities for hedge funds that he founded after leaving Galleon.  Continue reading

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SEC Charges Investment Advisers Gregory Adams and Larry Grossman with Fraud

In the Matter of Larry C. Grossman and Gregory J. Adams, Admin. Proc. No. 3-15617. On November 20, 2013, the SEC announced it issued an Order Instituting Administrative Cease-and-Desist Proceedings (“OIP”) against investment advisers Larry Grossman and Gregory Adams.  The OIP charges Adams and Grossman with fraud and with violating the “custody rule” that requires investment advisory firms to establish specific procedures to safeguard and account for client assets.  According to the OIP, Adams and Grossman solicited clients to invest in funds controlled by Nikolai Battoo, whom the SEC charged with fraud in 2012Continue reading

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SEC Examiner Steven Gilchrist Criminally Charged for Allegedly Making False Statements about Prohibited Stock Holdings

On November 19, 2013, SEC examiner Steven Gilchrist was charged by the United States Attorney’s Office for allegedly making misstatements about prohibited stock holdings.

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DOJ Announces $13 Billion Settlement with JPMorgan for Misleading Investors About Mortgage-Backed Securities

On November 19, 2013, the DOJ announced that it secured a $13 billion settlement with JPMorgan for misleading investors about securities containing toxic mortgages.

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