SEC Charges Parker Drilling Company with FCPA Violations

Posted on April 17, 2013 by BraunHagey & Borden

SEC v. Parker Drilling Company, Case No. 1:13-cv-461 (E.D. Va.).  On April 16, 2013, the SEC announced it filed settled FCPA charges against Parker Drilling Company, an international drilling services firm.  According to the SEC, Parker Drilling authorized payments to a Nigerian agent totaling $1.25 million back in 2004.  The payments were authorized even though Parker’s former senior executives knew that the money would be used to “entertain” Nigerian officials who were involved in resolving Parker Drilling’s ongoing customs problems.  After the Nigerian agent’s work, a previous customs fine was reduced by more than $3 million and Parker Drilling was allowed sell its rigs.  Continue reading →

Posted in Securities | Tagged , , | Leave a comment

CFTC Settles Fraud Action against Robert Cannone and National Equity Holdings for $3.6 Million

Posted on April 16, 2013 by BraunHagey & Borden

CFTC v. National Equity Holdings, Inc., et al., Case No. SACV 11-1718-JVS (C.D. Cal.).  On April 15, 2013, the CFTC announced it settled with Defendants Robert Cannone and National Equity Holdings, Inc.  The CFTC alleged that Cannone, by and through National Equity, solicited more than $1.4 million to trade commodity futures contracts through a pool.  According to the CFTC, Cannone and National Equity falsely told investors that there was a successful and experienced trader for the pool, they misrepresented the potential of profits and the risks associated with trading commodity futures, they did not tell investors that they were not registered with the CFTC to operate a pool, and they did not tell investors how the funds would be used.  Continue reading →

Posted in Commodities, Futures | Tagged , , | Leave a comment

SEC Charges David Miller in Unauthorized Trading Scheme

Posted on April 16, 2013 by BraunHagey & Borden

SEC v. David Miller, Case No. 3:13-cv-00522 (D. Conn.).  On April 15, 2013, the SEC announced it filed a partially settled enforcement action against David Miller, a former trader with Rochdale Securities LLC.  The SEC alleges that Miller received an order to purchase 1,625 shares of Apple stock.  However, Miller made orders to purchase a total of 1,625,000 shares of Apple (at a cost of almost $1 billion).  According to the SEC, Miller was going to share in the customer’s profit from selling the 1,625,000 shares if Apple’s stock price increased following Apple’s expected earnings announcement later that day.  Miller misled Rochdale’s principals by claiming that a customer had authorized the Apple orders.  Continue reading →

Posted in Securities | Tagged , , , , | Leave a comment

SEC Charges Scott Reiman with Insider Trading

Posted on April 15, 2013 by BraunHagey & Borden

In the Matter of Scott Reiman, Admin. Proc. File No. 3-15277.  On April 15, 2013, the SEC announced it initiated and settled an administrative proceeding charging Scott Reiman with insider trading.  According to the SEC Order Instituting Proceedings, Reiman is the founder and president of investment firm Hexagon, Inc.  He received repeated tips from Roger Parker who was CEO of Delta Petroleum.  The SEC previously sued Parker alleging that Parker tipped friend Mark Van Gilder with confidential information that private investment firm Tracinda was going to purchase a 35 percent stake in Delta.  Continue reading →

Posted in Securities | Tagged , , | Leave a comment

SEC Sues Former KPMG Partner for Insider Trading

Posted on April 15, 2013 by BraunHagey & Borden

SEC v. Scott London and Bryan Shaw, Case No. CV 13-02558 (C.D. Cal.).  On April 11, 2013, the SEC announced it filed insider trading charges against former KPMG partner Scott London and his friend Bryan Shaw.  The SEC alleges that London gave Shaw nonpublic information over a period of 18 months.  London passed the inside information by cell phone but on one occasion London give Shaw nonpublic information in the presence of others during a golf outing.  According to the SEC, London was the lead partner on the KPMG audits of Herbalife and Skechers USA, and he was the firm’s account executive for Deckers Outdoor Corp.  As a result, he had routine access to material, nonpublic information about these companies before they released their financial results. Shaw traded numerous times on the inside information he received from London.  He grossed profits of more than $714,000 from his trading.  The SEC alleges that London also gained access to inside information about impending mergers involving two former KPMG clients – RSC Holdings and Pacific Capital and tipped Shaw with the information.  Shaw made nearly $192,000 by purchasing RSC Holdings stock right before its merger announcement.  He also made more than $365,000 by purchasing Pacific Capital securities prior to a merger announcement.  Shaw gave London bags of cash, a Rolex watch, and several pieces of expensive jewelry.  The SEC charged London and Shaw with violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  The SEC seeks
injunctive relief, civil monetary penalties and disgorgement.

Posted in Securities | Tagged , , | Leave a comment

CFTC Files Settled Administrative Action against Barry Sendach, Joshua Kershner and Forex Global Solutions

Posted on April 10, 2013 by BraunHagey & Borden

In the Matter of Forex Global Solutions, et al., CFTC Docket No. 13-20.  On April 9, 2013, the CFTC announced it filed settled administrative charges against Barry Sendach, Joshua Kershner, and their companies, Forex Global Solutions Inc. and Forex Global Solutions Ltd.  Without admitting or denying the charges, the Respondents all consented to entry of a CFTC Order requiring them to pay a $750,000 civil monetary penalty and imposing permanent trading and registration bans against them.  According to the CFTC Order, Forex Global enticed customers to open off-exchange forex trading accounts and grant discretionary trading authority over those accounts to Forex Global.  Forex Global provided investors with false historical performance returns and did not disclose that performance returns were not accurately calculated.  The CFTC order also finds that Forex Global, Sendach, and Kershner failed to register with the CFTC as required under the CFTC’s new forex rules which require that entities that obtain or exercise discretionary trading authority over forex trading accounts to register with the CFTC as Commodity
Trading Advisors (“CTAs”), and entities that solicit or accept forex trades must be registered as Introducing Brokers (“IBs”).  The rules also require certain persons associated with a CTA or IB to be registered as Associated Persons (APs).  Forex Global violated the rules by acting as a CTA and IB without registering in those capacities.  Sendach and Kershner violated the rules by acting as APs of Forex Global without registering as APs.

Posted in Commodities | Tagged , | Leave a comment

CFTC Files Settled Administrative Action Against Interactive Brokers LLC

Posted on April 10, 2013 by BraunHagey & Borden

In the Matter of Interactive Brokers, LLC, CFTC Docket No. 13-19.  On April 9, 2013, the CFTC announced it filed settled administrative charges against Interactive Brokers, LLC.  Without admitting or denying the charges, Interactive Brokers consented to entry of a CFTC Order requiring it to pay a $225,000 civil monetary penalty and to cease and desist from violating CFTC Regulations.  The CFTC Order finds that Interactive Brokers did not compute as of the close of business each day the amount of customer funds required to be on deposit and the amount of customer funds actually on deposit in segregated accounts.
In addition, Interactive Brokers covered a portion of its U.S. Dollar (“USD”) commodity futures and options customer obligations with Japanese yen and Swiss francs to enhance interest earnings.  As a result, it did not have enough USD in segregation to meet its obligations.  Continue reading →

Posted in Commodities, Futures | Tagged , | Leave a comment

CFTC Charges Whileon Chay and 4X Solutions in Forex Ponzi Scheme

Posted on April 10, 2013 by BraunHagey & Borden

CFTC v. 4X Solutions, Inc. and Whileon Chay, Case No. 13-CIV-2287 (S.D.N.Y.).  On April 8, 2013, the CFTC announced it filed fraud charges against 4X Solutions, Inc. and its principal, Whileon Chay.  The CFTC alleges that Chay and 4X raised $4.8 million from investors by falsely claiming potential returns of 24 percent to 36 percent per year.  Defendants also claimed that they had not suffered a single losing month in 14 years.  In reality, Chay lost $2 million trading forex and misappropriated $2.8 million to fund 4X’s operations and make Ponzi payments to investors.  He also used the money to pay for resorts, restaurants, and limousine service, among other things.  The CFTC also alleges that Chay hid his trading losses and theft by giving out false monthly account statements.  The CFTC seeks restitution, disgorgement, civil monetary penalties, trading and registration bans, and injunctive relief.

Posted in Commodities | Tagged , , , | Leave a comment

SEC Charges Medical Device Company Employee for Illegally Tipping His Brother

Posted on April 9, 2013 by BraunHagey & Borden

SEC v. Tai Nguyen and Thanhha Bao, Case No. 12-cv-5009 (GBD) (S.D.N.Y.).  On April 8, 2013, the SEC announced an enforcement action against ThanhHa Bao, who worked in the finance department at Abaxis Inc.  The SEC alleges that Bao routinely tipped Tai Nguyen, who made $144,910 by trading before the company’s quarterly earnings announcements.  Nguyen was previously charged with insider trading by the SEC.  The SEC alleges that Bao tipped Nguyen about Abaxis’s quarterly earnings.  Nguyen traded on the inside information and tipped several hedge fund managers who made more than $7.2 million through illegal trades.  The hedge fund traders were also charged previously by the SEC.  Without admitting or denying the charges, Bao settled with the SEC.  Bao agreed to pay $144,910 and be barred from serving as an officer or director of a public company for five years.  He will also be enjoined from future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Exchange Act Rule 10b-5.

Posted in Securities | Tagged , , , , | Leave a comment

SEC Charges Glenn Hoppes and His Companies with Offering Fraud in Connection with Oil Drilling Projects

Posted on April 9, 2013 by BraunHagey & Borden

SEC v. Glenn Hoppes, United States Energy Corp., TN-KY Development Fund LP, TN-KY Development Fund II LP and TN-KY Development Fund III LP, Case No. 8:13-cv-00868-SDM-AEP (M.D. Fl.).  On April 8, 2013, the SEC announced an enforcement action against Glenn Hoppes, and four companies he controls, United States Energy Corp., TN-KY Development Fund LP, TN-KY Development Fund II LP and TN-KY Development Fund III LP.  According to the SEC, Hoppes hired Joseph Hilton to sell investments in oil drilling projects and also financially supported Hilton’s boiler room even though he knew Hilton was barred from acting as a broker in a prior SEC enforcement action.  Continue reading →

Posted in Securities | Tagged , , , , | Leave a comment