SEC Files Settled Case Against Gilbert Fiorentino For Hiding Perks and Other Compensation

Posted on September 20, 2012 by BraunHagey & Borden

SEC v. Gilbert Fiorentino, Case No. 12-cv-23388, (S.D. FL.).  On September 17, 2012, the SEC announced filing a settled civil fraud action against Gilbert Fiorentino, a former director of Systemax, Inc.  Between 2006 and 2010, Fiorentino received more than $400,000 from companies that did business with Systemax.  Fiorentino did not disclose the compensation to Systemax or its auditors.  In addition, he stole hundreds of thousands of dollars of goods from Systemax, which he also did not disclose.  Continue reading →

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SEC Announces Joseph Brass and Michael Schlager Were Sentenced in a Criminal Financial Fraud Action

Posted on September 19, 2012 by BraunHagey & Borden

US v. Joseph M. Brass, et al., Case No. 10-cr-00753-PD (E.D. Pa.)  On September 13, 2012, the SEC announced that Joseph M. Braas and Michael J. Schlager were sentenced in a criminal action in connection with a financial fraud.  Braas and Schlager were senior officers at Equipment Finance, LLC (“EFI”), formerly a commercial lender to the soft pulp logging industry and wholly-owned subsidiary of Sterling Financial Corp. (“Sterling”).  Brass was sentenced to 15 years in federal prison, and Schlager to 20 years.  Braas and Schlager were also each ordered to pay $53 million in restitution.   Continue reading →

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SEC Charges Stephen Blankenship and His Company With Stealing $600,000 From Customers

Posted on September 19, 2012 by BraunHagey & Borden

SEC v. Deer Hill Financial Group, LLC and Stephen B. Blankenship, Case No. 3:12-cv-01317 (D. Conn.)  On September 13, 2012, the SEC announced it charged Stephen Blankenship and his company with stealing $600,000 from customers.  Most of the investors deceived by Blankenship were his brokerage customers, some for long periods of time.  Blankenship talked customers into withdrawing money from their brokerage accounts promising that he could achieve better returns by investing their money through Deer Hill.  Continue reading →

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SEC Settles With ICP Asset Management and Others on Charges They Defrauded Collateralized Debt Obligations They Managed

Posted on September 12, 2012 by BraunHagey & Borden

Securities and Exchange Commission v. ICP Asset Management, LLC, ICP Securities, LLC, Institutional Credit Partners, LLC, Thomas C. Priore, Lori A. Priore, and Bertrand H. Smyers, Case No. 10-CV-4791 (S.D.N.Y.).  On September 10, 2012, the SEC announced advisory firm ICP Asset Management and president Thomas C. Priore have agreed to settle charges that they defrauded several collateralized debt obligations (“CDOs”) they managed.  They caused the CDOs to overpay for securities and lose millions of dollars.  Priore and the ICP companies also improperly obtained fees and undisclosed profits at the expense of the CDOs and their investors. Continue reading →

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SEC Obtains Temporary Asset Freeze and Restraining Order Against Louis Schooler and His Company in $50 Million Fraud Scheme

Posted on September 12, 2012 by BraunHagey & Borden

Securities and Exchange Commission v. Louis V. Schooler and First Financial Planning Corporation d/b/a Western Financial Planning Corporation, Case No. 12 CV 2164 LAB (JMA) (S.D. Cal.).  On September 10, 2012, the SEC announced it obtained an asset freeze against Western Financial Planning Corporation and Louis V. Schooler in a fraud scheme that raised more than $50 million.  The case is about Western and Schooler selling partnership interests that Western had organized to buy vacant land in Nevada and hold for sale at a profit.  Continue reading →

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SEC Files Settled Insider Trading Case Against Pharmaceutical Company Executive Arthur Reed And His Father-In-Law Allan Derusha

Posted on September 11, 2012 by BraunHagey & Borden

SEC v. Arthur H. Reed and Allan F. Derusha, Case No. 1:12-cv-07119 (N.D. Ill.).  On September 6, 2012, the SEC filed settled insider trading charges against Arthur Reed, who was the Director of Contract Marketing for APP Pharmaceuticals, Inc., and his father-in-law Allan Derusha.  Reed learned that APP was in the process of being acquired by another company and bought APP stock based on his knowledge of the acquisition.  He tipped his father-in-law who also bought APP stock.  Continue reading →

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SEC Charges Hyung Lim With Insider Trading For Tipping Hedge Fund Manager

Posted on September 10, 2012 by BraunHagey & Borden

SEC v. Hyung Lim, Case No. 12-CV-6707 (S.D.N.Y.).  On September 4, 2012, the SEC charged Hyung Lim with insider trading.  Lim obtained information about Nvidia Corporation’s quarterly earnings announcements from a friend who worked there.  Lim would then tip hedge fund manager Danny Kuo.  Lim gave Kuo information about Nvidia’s revenues and profit margins, among other things.  Kuo compensated Lim for the tips in cash and with illegal tips which Lim used to make more than $11,000 in trading profits.  Continue reading →

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SEC Charges Yan-qing Liu With Fraud For Bolstering Financial Results With Fake Sales

Posted on September 10, 2012 by BraunHagey & Borden

SEC v. China Sky One Medical, Inc. and Yan-qing Liu, Case No. CV12-7543 MWF (MANx) (C.D. Cal.).  On September 4, 2012, the SEC charged China-based China Sky One Medical, Inc. (“CSKI”) and its CEO and chairman Yan-qing Liu with fraud.  CSKI claimed in public reports that it had entered into a strategic distribution agreement with a Malaysian company that would become the exclusive distributor of one of CSKI’s products and generate $1 million per month in sales.  Continue reading →

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SEC Charges Georgia Accountant and Several Others with Insider Trading

Posted on September 7, 2012 by BraunHagey & Borden

SEC v. Melvin, Case No. 1:12-cv-02984 (N.D. Ga.); SEC v. Berry, Case No. 1:12-cv-02985 (N.D. Ga.); SEC v. Coots, Case No. 1:12-cv-02986 (N.D. Ga.); SEC v. Jackson, Case No. 1:12-cv-02987 (N.D. Ga. Filed Aug. 28, 2012); SEC v. Rooks, Case No. 1:12-cv-02988 (N.D. Ga.).  On August 28, 2012, the SEC announced several insider trading cases against Georgia defendants.  They all relate to an accountant who tipped four friends who then furnished the inside information to others.  The information was related to a tender offer by a French pharmaceutical company.  Continue reading →

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Hedge Fund Manager James F. Turner And His Firm Ordered to Disgorge $2 Million In Profits From Insider Trading

Posted on September 7, 2012 by BraunHagey & Borden

Securities and Exchange Commission v. Clay Capital Management, LLC, et al., Case No. 2:11-cv-05020-DMC-JAD (D.N.J.).  On August 29, 2012, the SEC announced it obtained final judgments against Clay Capital Management, LLC and its former Chief Investment Officer, James F. Turner II, for their roles in an insider trading scheme.  The Court ordered Clay Capital and Turner to disgorge $2.1 million in illicit gains and permanently enjoined them from future violations of the antifraud provisions of the federal securities laws. Continue reading →

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