CFTC Obtains Emergency Order Freezing Assets of Robert Stanley Harrison

Posted on February 13, 2013 by BraunHagey & Borden

CFTC v. Robert Stanley Harrison, Case No. 8:13-cv-00327-GRA (D.S.C.).  On February 11, 2013, the CFTC announced that the U.S. District Court for the District of South Carolina froze the assets of Robert Stanley Harrison.  The CFTC charged Harrison with fraudulently soliciting investments in the Investors Choice Advisors LLC commodity pool.  Harrison allegedly guaranteed the investments had no risk and would generate 100 percent profits within 60 to 90 days.  Harrison also created fake documents reflecting purported profits.  In addition, Harrison took investor money for himself and did not register as a Commodity Pool Operator.  The CFTC seeks injunctive relief, registration and trading bans, restitution to defrauded investors, disgorgement, and a civil monetary penalty in addition to the emergency relief already obtained.

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SEC Files Emergency Action in a $150 Million Investment Scheme

Posted on February 11, 2013 by BraunHagey & Borden

SEC v. A Chicago Convention Center, LLC, Anshoo Sethi, and Intercontinental Regional Center Trust of Chicago, LLC, Case No. 13-cv-982 (E.D. Ill.).  On February 8, 2013, the SEC announced charges and an asset freeze against Anshoo Sethi, A Chicago Convention Center (“ACCC”) and Intercontinental Regional Center Trust of Chicago (“IRCTC”) in connection with an alleged investment scheme to defraud foreign investors seeking profitable returns and a legal path to U.S. residency through a federal visa program.  The SEC alleges that Sethi and his companies ACCC and IRCTC  sold more than $145 million in securities and obtained $11 million in administrative fees from investors mostly from China.  Continue reading →

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SEC Gives Up on Case against IndyMac CFO A. Scott Keys

Posted on February 11, 2013 by BraunHagey & Borden

SEC v. Michael W. Perry et al, Case No. CV 11-1309 R (JCx) (C.D. Cal.).  On February 7, 2013, the SEC announced that a federal judge granted summary judgment in favor of A. Scott Keys, a former CFO of IndyMac Bancorp., Inc.  The SEC alleged that former CEO Michael W. Perry and former CFOs A. Scott Keys and S. Blair Abernathy participated in the filing of false and misleading disclosures about the financial stability of IndyMac and its main subsidiary, IndyMac Bank F.S.B.  The SEC claimed that they regularly received internal reports about IndyMac’s deteriorating capital and liquidity positions, but failed to ensure adequate disclosure of that information to investors.  Continue reading →

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SEC Settles Insider Trading Case against Former Executive at a Coca-Cola Bottling Company

Posted on February 8, 2013 by BraunHagey & Borden

SEC v. Steven Harrold, Case No. CV 12-1959 GW (JCx) (C.D. Cal.).  On February 6, 2013, the SEC announced that it settled insider trading charges against Steven Harrold, a former executive at a Coca-Cola bottling company.  In its complaint filed in March 2012, the SEC alleged that Harrold, who was a Vice President at Coca-Cola Enterprises Inc., bought company stock in his wife’s brokerage account after learning that his company had agreed to acquire the Coca-Cola Company’s bottling operations in Norway and Sweden.  Harrold signed an agreement promising to maintain the confidentiality of any nonpublic information he learned about the deal.  Continue reading →

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SEC Files Insider Trading Case against James Balchan for Trading on Information Gained from his Wife, a Law Firm Partner

Posted on February 7, 2013 by BraunHagey & Borden

SEC v. James Balchan, Case No. 4:13-cv-00298 (S.D. Tx.).  On February 6, 2013, the SEC announced that it filed insider trading charges against James Balchan for trading ahead of the acquisition of National Semiconductor after he misappropriated confidential information from his wife, a partner at a law firm that was consulted on issues related to the acquisition.  The SEC alleges that a partner at the firm where Balchan’s wife worked
began organizing informal client events in honor of National Semiconductor’s general counsel.  The partner had a social friendship with Balchan’s wife and Balchan.  Continue reading →

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CFTC Obtains $325 Million Penalty to Settle LIBOR Case against the Royal Bank of Scotland and RBS Securities Japan Limited

Posted on February 6, 2013 by BraunHagey & Borden

In the Matter of The Royal Bank of Scotland plc and RBS Securities Japan Limited, CFTC Docket No. 13-14.  On February 6, 2013, the CFTC announced it issued a settled Order against the Royal Bank of Scotland and RBS Securities Japan related to the alleged manipulation, attempted manipulation, and false reporting relating to LIBOR for Yen and Swiss Franc.  The CFTC Order imposes on RBS a $325 million civil monetary penalty.  It also orders RBS to cease and desist from further violations as charged, and engage in undertakings to ensure the integrity and reliability of LIBOR submissions, including improving internal controls.  Continue reading →

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CFTC Sues Halifax Investment Services for Illegal Solicitation of Forex Orders

Posted on February 6, 2013 by BraunHagey & Borden

CFTC v. Halifax Investment Services, Ltd., Case No. 1:13-cv-00892 (E.D.Ill.).  On February 5, 2013, the CFTC announced charges against Halifax Investment Services, Ltd. of Sydney, Australia relating to the solicitation and acceptance of forex orders from U.S. customers without the requisite CFTC registration.  The CFTC alleges that in the forex market, entities known as Retail Foreign Exchange Dealers (RFEDs) may buy foreign currency contracts from, or sell foreign currency contracts to, individual investors.  Continue reading →

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SEC Settles Case against Former Officers of Gibraltar Asset Management Group

Posted on February 6, 2013 by BraunHagey & Borden

SEC v. Garfield Taylor, Inc., et al., Case No. 1:11-cv-02054-RLW (D.D.C.).  On February 5, 2013, the SEC announced that it settled its case against three former officers of Gibraltar Asset Management Group, LLC for their role in a $27 million dollar Ponzi scheme operated through Gibraltar.  Without admitting or denying the charges, the defendants settled as follows:

  • Benjamin C. Dalley consented to the entry of a Final Judgment permanently enjoining him from aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  He will pay $72,500 in disgorgement and prejudgment interest and a civil penalty of $40,000.
  • Randolph M. Taylor consented to the entry of a Final Judgment permanently enjoining him from aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  He will pay $584,148.32 in disgorgement and prejudgment interest.  However, all but $30,000 of this amount is waived and Taylor will not pay a civil monetary penalty, based upon his sworn Statement of Financial Condition.
  •  William B. Mitchell consented to the entry of a Final Judgment permanently enjoining him from violating Section 15(a)(1) of the Exchange Act.  The Final Judgment orders Mitchell to pay $164,131 in disgorgement and prejudgment interest, but waives payment of all but $15,000 of this amount, and does not impose a civil penalty, based upon his sworn Statement of Financial Condition.  In a separate administrative proceeding, Mitchell agreed to a SEC Order that bars him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.
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SEC Settles Insider Trading Case Against Four Company Executives and Two Tippees

Posted on February 6, 2013 by BraunHagey & Borden

SEC v. Patrick M. Carroll, James P. Carroll, William T. Carroll, David Mark Calcutt, Christopher Calcutt, David Stitt, John Monroe and Stephen Somers, Case No. 3:11-cv-165-H.  On February 5, 2013, the SEC announced that it settled insider trading charges in a case filed in March 2011.  The SEC charged eight people for trading on the basis of inside information about the forthcoming acquisition of Steel Technologies, Inc. by Mitsui & Co. (USA).  The SEC alleged that four executives traded illegally and that three of them tipped others who also traded in advance of the upcoming acquisition.  The six settling defendants collectively earned $268,805 from their trades.  Continue reading →

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SEC Announces that Investment Adviser Timothy Roth Was Sentenced to 12 Years in Parallel Criminal Case

Posted on February 6, 2013 by BraunHagey & Borden

SEC v. Timothy J. Roth, et al, Case No. 11-cv-02079 (C.D. Ill.).  On February 5, 2013, the SEC announced that a federal judge sentenced Timothy J. Roth to 151 months in prison and ordered him to pay $16,151,964 in restitution to his victims.  Roth, a former investment adviser associated with Comprehensive Capital Management, Inc. (“Comprehensive”), pleaded guilty to one count of mail fraud and one count of money laundering in connection with his misappropriation of over $16 million worth of mutual funds.  The criminal charges arose out of the same facts underlying an SEC action filed against Roth in March 2011.  Continue reading →

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