SEC v. Christopher A.T. Pedras, et al., Case No. CV 13-07932 DMG JCGx (C.D. Cal.) On November 4, 2013, the SEC announced it obtained an emergency asset freeze against Christopher A.T. Pedras who allegedly deceived investors into believing they were investing in a profitable trading platform. In reality, he was using new investor money to pay returns to earlier investors. Pedras was assisted by his business partner Sylvester M. Gray II and his sales representative Alicia Bryan. According to the SEC, Pedras raised more than $5.6 million. Continue reading
SEC v. Yin Nan “Michael” Wang, Wendy Ko, et al., Case No. CV 13-07553 JAK CSSx (C.D. Cal.) On November 1, 2013, the SEC announced it obtained an emergency asset freeze against Yin Nan (Michael) Wang, Wendy Ko and some companies allegedly involved in a real estate investment scheme. According to the SEC, Wang is the owner of Defendant Velocity Investment Group. Wang and Ko also allegedly controlled Bio Profits Series fund accounts which transferred investor funds to make quarterly interest payments to other investors. According to the SEC, Wang admitted that Velocity was using new investor money to pay earlier investors. Continue reading
SEC v. Dennis S. Rosenberg, Case No. 1:13-cv-3559-AT (N.D. Ga.). On October 29, 2013, the SEC announced insider trading charges against Dennis Rosenberg (“Rosenberg”) for trading in the securities of Carter’s Inc. (“Carter’s”). According to the SEC, Rosenberg would trade before news releases about Carter’s earnings after getting tips from a former Carter’s executive about the content of the upcoming announcements. The SEC alleges that Rosenberg also passed the inside information along to two investment advisers for two separate hedge funds. According to the SEC, Rosenberg made about $50,000 composed of gains, losses avoided, and consulting fees based on his tips. The SEC also alleges that Rosenberg’s tippees made about $2 million in profits and losses avoided. Rosenberg settled with the SEC. Without admitting or denying the charges, Rosenberg consented to entry of a final judgment enjoining him from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5. The final judgment will also order him to disgorge about $500,000 and pay about $108,000 in prejudgment interest. The amount of civil monetary penalties will be decided by the Court at a later date.
In the Matter of Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., CFTC Docket No. 14-02. On October 29, 2013, the CFTC announced the filing of a Settled Order Instituting Proceedings against Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (“Rabobank” or the “Bank”) for the alleged false reporting and attempted manipulation of the London Interbank Offered Rate (LIBOR) and Euro Interbank Offered Rate (Euribor) for the U.S. Dollar, Yen and Sterling, and for the alleged manipulation of Yen LIBOR. According to the Order, Rabobank was one of the global banks that submitted borrowing rate information on a daily basis for use in the calculation of LIBOR for various currencies and for Euribor. The Bank also traded and held cash and derivatives positions whose value depended on these same benchmarks. Continue reading
In the Matter of Further Lane Asset Management, LLC, et al., Admin. Proc. No. 3-15590; In the Matter of GW & Wade, LLC, Admin. Proc. No. 3-15589; In the Matter of Knelman Asset Management Group, LLC et al., Admin. Proc. No. 3-15588. On October 28, 2013, the SEC announced it sanctioned three investment advisory firms for violating the “custody rule” which requires advisory firms to adhere to certain standards when they maintain custody of client money or securities. Continue reading
In the Matter of Stryker Corporation, Admin. Proc. No. 3-15587. On October 24, 2013, the SEC announced it filed a settled Foreign Corrupt Practices Act case against Stryker Corporation related to its subsidiaries’ alleged payments of bribes to doctors, health care professionals, and other government-employed officials. According to the SEC’s Order Instituting Cease-and-Desist Proceedings (the “Order”), Stryker’s subsidiaries in Argentina, Greece, Mexico, Poland, and Romania made payments of about $2.2 million that were falsely described as legitimate expenses in the company’s books and records. Stryker made about $7.5 million in profits as a result of the bribes. Continue reading
On October 24, 2013, the CFTC announced the results of its enforcement program for fiscal year 2012 (“FY13”), and they are revealing. The most significant point is the numbers – the CFTC filed 82 enforcement cases, which is just 20 shy of their record of 102 enforcement actions last year. The agency’s three-year total is 283 enforcement actions, nearly double the number of cases brought in the prior three years. Continue reading
Posted in Commodities
SEC v. Diebold, Inc., Case No. 1:13-cv-01609 (D.D.C.). On October 22, 2013, the SEC announced it filed a settled Foreign Corrupt Practices Act case against ATM maker Diebold, Inc. According to the SEC, Diebold, through its Chinese subsidiary, gave European and U.S. trips to officials of government owned banks in China. The SEC alleges that Diebold spent approximately $1.6 on these trips, entertainment, and other improper gifts. Likewise, Diebold spent more than $147,000 on trips and entertainment for Indonesian government officials. Continue reading
SEC v. Yuhe International, Inc., and Gao Zhentao, Case No. 1:13-cv-01598-RCL (D.D.C.). On October 18, 2013, the SEC announced fraud charges against Yuhe International, Inc.(“Yuhe”), a China-based provider of broiler chickens, and its Chief Executive Officer, Gao Zhentao (“Gao”). According to the SEC, Yuhe, under Gao’s direction and control, made false public statements about the acquisition of chicken farms for more than $15 million. The company provided updates about the farms’ contribution to the company’s revenue. In October 2010, Yuhe completed a public offering in the United States, selling more than four million shares of its common stock and generating net proceeds in excess of $27 million. Continue reading
In the Matter of JPMorgan Chase Bank, N.A., CFTC Docket No. 14-01. On October 16, 2013, the CFTC announced it issued a settled Order against JPMorgan Chase Bank, N.A. (“JPMorgan”) in connection with the trading of certain credit default swaps (“CDS”). According to the Order, by selling a large volume of these swaps, JPMorgan recklessly disregarded concept that prices are established based on legitimate forces of supply and demand. As a result, the CFTC has found the Bank liable for violating Section 6(c)(1) of the Commodity Exchange Act (the “Act”), 7 U.S.C. §9 (2012), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), and Commission Regulation 180.1, 17 C.F.R. §180.1 (2012). As part of the settlement, JPMorgan admitted the Order’s factual findings that its traders acted recklessly and has agreed to pay a $100 million civil monetary penalty.