SEC Charges Investment Adviser Anthony K. Welch With Fraud

Posted on September 7, 2012 by BraunHagey & Borden

SEC v. Anthony K. Welch, Case No. 1:12-cv-3034 (N.D. Ga.).  On August 31, 2012, the SEC charged former investment adviser Anthony Welch with fraud.  Welch issued a press releases and made other public statements that had false and misleading information concerning technologies acquired by and revenues generated by eHydrogen and ChromoCure. The period of the false and misleading press releases coincided with suspicious price and trading volume increases in the common stock of both companies. Continue reading →

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SEC Charges Brokers Fabrizio Neves and Jose Luna for Defrauding Brazilian Public Pension Funds

Posted on September 7, 2012 by BraunHagey & Borden

Securities and Exchange Commission v. Fabrizio Neves, et al., Case No. 1:12-cv-23131 (S.D. Fla.).  On August 29, the SEC filed fraud charges against former Miami brokers Fabrizio Neves and Jose Luna.  Neves and Luna were involved in a scheme to mark up prices of approximately $70 million in structured notes issued by commercial banks, charging around $36 million in undisclosed fees to their brokerage customers: two Brazilian public pension funds and a Colombian institutional investor.  Continue reading →

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SEC Files Fraud Action Robert L. Kelly and Wwebnet, Inc.

Posted on September 7, 2012 by BraunHagey & Borden

Securities and Exchange Commission v. Wwebnet, Inc. and Robert L. Kelly, Case No. 12-CV-6581 (S.D.N.Y.).  On August 28, the SEC announced fraud charges against Wwebnet, Inc. and its CEO Robert Kelly.  Kelly solicited investments from investors to purchase stock issued by Wwebnet through unregistered private placement offerings.  Kelly and Wwebnet defrauded investors by misrepresenting and omitting material information about the Company and how it would use investor funds.  Continue reading →

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SEC Files Settled Fraud Action Against Hedge Fund Manager Gary R. Marks

Posted on September 7, 2012 by BraunHagey & Borden

Securities and Exchange Commission v. Gary R. Marks, CV-12-4486-JSC (N.D. Cal.).  On August 27, the SEC announced it had filed a settled action against Gary R. Marks.  Marks managed various fund of funds hedge funds through Sky Bell Asset Management, Inc. (an investment adviser previously registered with the Commission), including a fund that was co-managed with several groups including Sky Bell Offshore Partners (collectively “Sky Bell Hedge Funds”).  Marks misrepresented the level of correlation and diversification among the Sky Bell Hedge Funds. Continue reading →

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SEC Obtains Final Judgment Requiring Jeffrey Mowen to Pay More Than $18 Million

Posted on August 31, 2012 by BraunHagey & Borden

SEC v. Jeffrey L. Mowen, et al., Case No. 2:09-cv-00786-DB/PMW (D. Utah).  On August 27, the SEC announced it obtained a final judgment against Jeffrey L. Mowen, ordering Mowen to disgorge $8,041,779 and $1,964,203.67 in prejudgment interest.  The Court also ordered Mowen to pay a civil monetary penalty of $8,041,779.  The Court enjoined Mowen from future violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act.  Mowen operated a Ponzi scheme that was fed through money raised by another defendant, Thomas Fry.  Fry raised money through promoters by selling high-yield promissory notes.  The scheme raised over $40 million.  Mowen never invested the funds, instead taking more than $8 million for himself.  Mowen previously pled guilty to related criminal charges and is currently serving a ten-year prison sentence.  The SEC obtained a final judgment ordering disgorgement and penalties against Fry and several of his promoters on June 15, 2012.

 

 

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SEC Charges Eric Martin With Insider Trading

Posted on August 31, 2012 by BraunHagey & Borden

SEC v. Eric Martin, Defendant and Robin Martin, Relief Defendant, Case No. 1:12-CV-02922-AT (N.D. Ga.).  On August 23, 2012, the SEC charged Eric Martin with insider trading.  Martin served as the Vice President of Investor Relations for Carter’s Inc.  He traded Carter’s shares during blackout periods while possessing inside information about the company’s financial results.  When Martin had preliminary financial information and was preparing management for earnings calls, he would buy or sell Carter’s stock depending on whether the preliminary information was good or bad.  Martin realized profits and avoided losses in excess of $170,000.  Martin is charged with violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder.  The SEC is seeking a permanent injunction, disgorgement with prejudgment interest and civil monetary penalties.

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SEC Charges Edward Bronson And His Firm In Penny Stock Scheme

Posted on August 31, 2012 by BraunHagey & Borden

Securities and Exchange Commission v. Edward Bronson, et al., Case No. 12-CV-6421 (S.D.N.Y.).  On August 22, the SEC charged Edward Bronson and his company, E-Lionheart Associates LLC, in a penny stock scheme.  Bronson and E-Lionheart employees would makes cold calls to penny stock companies quoted on the OTC Link to ask if they were looking for capital.  E-Lionheart bought stock at discount rates and then resold the shares.  Bronson and E-Lionheart claimed the sales were exempt from registration under a provision of Regulation D that exempts transactions that are in compliance with state law exemptions.  However, no state law exemptions were applicable to these transactions.  Bronson and his company made more than $10 million in profits from the unlawful sale of the shares.  Bronson and E-Lionheart are charged with violating Sections 5(a) and 5(c) of the Securities Act.  The SEC seeks injunctive relief, disgorgement, civil monetary penalties and penny stock bars.

 

 

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SEC Files Action Against Paul Burks and ZeekRewards.com to Halt $600 Million Ponzi Scheme

Posted on August 30, 2012 by BraunHagey & Borden

SEC v. Rex Venture Group LLC et al., Case No. 3:12-CV-519 (W.D. N. Carolina).  It seems as though we are reading about a new Ponzi scheme almost every day.  On August 22, the SEC announced it filed a settled action against Rex Venture Group d/b/a ZeekRewards.com and Paul R. Burks for operating a massive $600 million Ponzi and Pyramid Scheme.  Defendants solicited investors through the Internet and other means to participate in the ZeekRewards program for a companion website, Zeekler.com, through which the Defendants operated penny auctions.  Continue reading →

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SEC Files Settled Insider Trading Case Against James Lieberman

Posted on August 30, 2012 by BraunHagey & Borden

SEC v. James L. Lieberman, Civil Action No. 1:12-cv-02198 (D. Colo.).  The SEC is continuing its focus on insider trading, announcing on August 21 that it filed insider trading charges against James L. Lieberman.  Lieberman traded Array BioPharma Inc. stock based on inside information about a pending transaction with Novartis, A.G.  Lieberman was Array’s manager of environmental health and safety and received information from Array’s CFO telling him about an upcoming deal with Novartis.  Continue reading →

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SEC Charges Ricardo Rojas in $7 Million Ponzi Scheme Targeting Evangelical Christians

Posted on August 29, 2012 by BraunHagey & Borden

SEC v. Ricardo Bonilla Rojas and Shadai Yire, Inc., Case No. 12-cv-1681 (D.P.R.).  On August 21, the SEC announced fraud charges against Ricardo Rojas and his firm Shadai Yire.  Rojas and his sales agents solicited investors claiming the investments were a risk-free way to earn high returns in a short period of time.  Rojas paid the sales agents commissions based on their sales.  Continue reading →

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