SEC Charges Richard and Susan Olive with Defrauding Senior Citizens Investing in Charity

Posted on February 5, 2013 by BraunHagey & Borden

SEC v. Richard and Susan Olive, Case No. 2:13-cv-14047 (S. D. Fl.); SEC v. We the People, Inc. of the United States, Case No. 2:13-cv-14050 (S. D. Fl.); SEC v. William G. Reeves, Esq., Case No. 2:13-cv-14048 (S. D. Fl.).  On February 4, 2013, the SEC announced fraud charges against Richard and Susan Olive for raising millions of dollars selling investments in a so-called charitable organization.  The SEC alleges that the Olives were hired at We The People Inc. and obtained $75 million from hundreds of investors across the U.S.  They sold an investment described as a charitable gift annuity (“CGA”).  The CGAs issued by We The People were unique in that they were issued to benefit the Olives and other third-party promoters and consultants.  Continue reading →

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SEC Charges Five Cay Clubs Resorts and Marinas Executives in $300 Million Ponzi Scheme

Posted on January 31, 2013 by BraunHagey & Borden

SEC v. Barry J. Graham, Fred Davis Clark, Jr., a/k/a Dave Clark, Cristal R. Coleman, a/k/a Cristal Clark, David W. Schwarz, Ricky Lynn Stokes, Case No. 4:13-cv-10011 (S. D. Fl.).  On January 30, 2013, the SEC announced fraud charges against Fred Davis Clark, Jr., Cristal R. Coleman, David W. Schwarz, Barry J. Graham and Ricky Lynn Stokes, all of whom are former executives of the Cay Clubs Resorts and Marinas.  The SEC alleges that Defendants were involved in a multi-year scheme to defraud investors who purchased units at Cay Clubs’ resort locations.  Defendants, directly and through sales agents, touted the profitability of the investments by promising immediate income from a guaranteed 15% return.  Continue reading →

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CFTC Files Settled Charges Related to Illegal Off-Exchange Transactions in Precious Metals

Posted on January 30, 2013 by BraunHagey & Borden

In the Matter of Secured Precious Metals International, Inc., Secured Precious Metals Management, Inc. and Linda Laramie, CFTC Docket No. 13-12; In the Matter of Barclay Metals, Inc., Universal Clearing, LLC, Sean Stropp and Sylvia Williams, CFTC Docket No. 13-13.  On January 28, 2013, the CFTC announced it issued two Orders settling charges against Secured Precious Metals International, Inc., Secured Precious Metals Management, Inc., and their sole owner and principal, Linda Laramie (collectively, “SPM”), as well as Barclay Metals, Inc., Universal Clearing, LLC, and their owners and principals, Sean Stropp and Sylvia Williams (collectively, “Barclay”), all for engaging in illegal off-exchange financed transactions in precious metals with retail customers.  Continue reading →

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SEC Brings Affinity Fraud Charges against Firas Hamdan in Investment Scheme Targeting Lebanese Community

Posted on January 30, 2013 by BraunHagey & Borden

SEC v. Firas A. Hamdan, Case No. 4:13-CV-215 (S.D. Tex.).  On January 29, 2013, the SEC announced fraud charges against Firas Hamdan for targeting members of the Lebanese and Druze communities with an investment scheme involving a supposed high-frequency trading program.  The SEC alleges that Hamdan raised more than $6 million.  Hamdan told investors that he would generate 30 percent returns on their investments by pooling investor funds with his own money.  Hamdan provided investors with fake brokerage account statements to substantiate his claimed profits.  Continue reading →

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SEC Brings Financial Crisis-Related Case against Jesse Litvak for Selling Mortgage-Backed Securities

Posted on January 28, 2013 by BraunHagey & Borden

SEC v. Jesse C. Litvak, Case No. 3:13-cv-00132 (D. Conn.). On January 28, 2013, the SEC announced fraud charges against Jesse Litvak, a former executive at broker-dealer Jeffries & Co.  The SEC alleges that Litvak arranged trades for customers as part of his job as a managing director on the mortgage-backed securities (“MBS”) desk at Jefferies.  He would buy MBS from customers and sell them to others.  He lied about the price at which he bought the MBS so he could sell it to the other customer at an artificially high price and then keep more money for the firm.  Continue reading →

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SEC Charges Financial Adviser Kevin Dowd with Tipping Insider Information

Posted on January 25, 2013 by BraunHagey & Borden

SEC v. Kevin L. Dowd.  On January 25, 2013, the SEC announced charges in New Jersey Federal Court against Kevin Dowd for illegally tipping inside information.  The SEC alleges that Dowd learned about the acquisition of Pharmasset Inc. by Gilead Sciences from one of his supervisors at the brokerage firm where he worked.  The supervisor learned about the deal from a customer who was on Pharmasset’s board of directors.  The supervisor told Dowd to keep the information confidential and to refrain trading in Pharmasset securities.  Nevertheless, Dowd tipped a friend who bought Pharmasset stock right before the public announcement of the deal.  Continue reading →

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President Obama Plans to Nominate Mary Jo White to Lead the SEC

Posted on January 24, 2013 by BraunHagey & Borden

The Associated Press is reporting that President Obama will nominate former federal prosecutor Mary Jo White to serve as Chairman of the SEC.

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SEC Charges Jonathan Gilchrist with Stock Manipulation

Posted on January 24, 2013 by BraunHagey & Borden

SEC v. Jonathan C. Gilchrist, Case No 4:13-cv-00163 (S.D. Tex.).  On January 23, 2013, the SEC announced it filed charges against Jonathan C. Gilchrist for engaging in a stock manipulation scheme in violation of the registration and antifraud provisions of the federal securities laws.  The SEC alleges that Gilchrist authorized the unregistered offer and sale of six million shares of Mortgage Xpress, Inc. which was renamed The Alternative Energy Technology Center, Inc., to himself and business he controlled.  The shares were sold at a significantly reduced price.  Continue reading →

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CFTC Obtains Default Judgment against Lincolnshire Trading Partners, LLC

Posted on January 23, 2013 by BraunHagey & Borden

CFTC v. Lincolnshire Trading Partners, LLC, and Scott Geisinger, Case No 2:12-cv-07417-PA-VBK (N.D. Cal.).  On January 18, 2013, the CFTC announced that it obtained a default judgment against Lincolnshire Trading partners, LLC and Scott Geisinger for violating CFTC registration requirements.  The CFTC charged Geisinger and Lincolnshire in August 2012.  According to the Court’s default judgment, Lincolnshire, by and through its agent, Geisinger, exercised discretionary trading authority over foreign currency (forex) trading accounts for people who were not eligible to participate in retail, leveraged forex transactions.  Defendants were not registered with the CFTC nor did they have a valid exemption from the registration requirements.  The defendants were each ordered to pay a $140,000 civil monetary penalty and are permanently barred from any commodity-related activities.

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Kenneth Dachman Sentenced to Lengthy Prison Term in Investment Fund Scheme

Posted on January 23, 2013 by BraunHagey & Borden

SEC v. Kenneth A, Dachman, et al., Case No 1:12-cv-00821 (N.D. Illinois).  On January 22, 2013, the SEC announced that in a parallel criminal action brought by the Unites States Attorney’s Office, Kenneth A Dachman was sentenced to 120 months in prison and ordered to pay more than $4 million in restitution.  Dachman was criminally charged for raising more than $4 million from investors for his sleep disorder businesses, Central Sleep Diagnostics and Advanced Sleep Devices.  He obtained money from investors by misrepresenting the use of their funds, the expected investment returns and risks involved in the investments, and the financial condition of the businesses.  In February 2012, the SEC filed a civil enforcement action against Dachman based on the same events.  The SEC’s action was while the criminal case was pending.

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