SEC Charges Peter Kirschner, Stuart Rubens, Advanced Equity Partners and Premiere Consulting with Fraud and Registration Violations

Posted on September 26, 2013 by BraunHagey & Borden

SEC v. Advanced Equity Partners, LLC, Premiere Consulting, LLC, Peter Kirschner and Stuart Rubens, Case No. 3:13-cv-62100 (S.D. Fla.).  On September 26, 2013, the SEC announced fraud charges against Peter Kirschner, a repeat offender, his business partner Stuart Rubens, and their companies Advanced Equity Partners, LLC, (“Advanced Equity”), and Premiere Consulting, LCC (“Premiere”) in connection with an unregistered stock offering of Thought Development, Inc. (“TDI”).  TDI claims to have developed a laser-line system designed to mark first downs in professional and college football games by generating a line on the field visible in the stadium to players and fans and on television. Continue reading →

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CFTC Closes Investigation of Silver Markets without Recommending Enforcement Actions

Posted on September 26, 2013 by BraunHagey & Borden

On September 25, 2013, the CFTC’s Division of Enforcement announced it has closed the investigation that was publicly confirmed in September 2008 concerning silver markets without recommending any charges.  Although the CFTC rarely comments on opening or closing investigations, the CFTC felt is appropriate to inform the public because the investigation was confirmed back in 2008.  The CFTC maintains that based on current state of the law and evidence, there are no grounds to bring charges. Continue reading →

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SEC Charges Game Company CEO Troy Lyndon and Ronald Zaucha with Fraud

Posted on September 25, 2013 by BraunHagey & Borden

SEC v. Troy Lyndon and Ronald Zaucha, Case No. CV13 00486 SOM KSC (D. Haw.).  On September 25, 2013, the SEC announced fraud charges against Troy Lyndon, the founder, CEO and CFO of a religious-themed video game manufacturer and his friend Ronald Zaucha with fraud for falsely inflating the company’s revenue.  According to the SEC, Lyndon caused Left Behind Games Inc. to issue almost two billion shares of stock to Zaucha as supposed payment for consulting services.  In reality, the plan was for Zaucha
to sell unregistered stock into the market and give a portion of the proceeds to Left Behind Games to make its revenue look better than it actually was.  Continue reading →

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SEC Charges Bank Executives Ted Awerkamp and Michael McGrath with Fraud

Posted on September 25, 2013 by BraunHagey & Borden

SEC v. Mercantile Bancorp, Inc. et al., Case No. 3:13-cv-03341-RM-BGC (C.D. Ill.).  On September 24, 2013, the SEC announced charges against Mercantile Bancorp, its former CEO Ted Awerkamp, and its former CFO Michael McGrath for failing to notice in the bank’s financial statements a likely loss in a large troubled loan.  According to the SEC, Awerkamp knew that the borrower in a shared national credit loan for a large residential real estate development was not going to contribute the necessary money to complete the project, which served as collateral for the loan.  He also knew that the collateral had lost value.  Continue reading →

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SEC Charges Larry Polhill with Investment Fraud

Posted on September 25, 2013 by BraunHagey & Borden

SEC v. Larry R. Polhill, Case No. EDCV13-1729 MRP (SPx) (C.D. Cal.).  On September 24, 2013, the SEC announced charges against Larry Polhill for allegedly defrauding hundreds of investors who bought promissory notes believing they were secured by collateral.  According to the SEC, Polhill used his company American Pacific Financial Corporation (“APFC”) to buy and sell real estate and distressed assets.  To raise money, he offered securities in the form of unregistered promissory notes that he claimed would generate interest of 5 to 17 percent per year.  Continue reading →

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SEC Charges 10 Brokers in Connection with the McGinn Smith Ponzi Scheme

Posted on September 24, 2013 by BraunHagey & Borden

In the Matter of Donald J. Anthony, Jr. et al., Admin Proc. No. 3-15514.  On September 23, 2013, the SEC announced charges against 10 former brokers for their roles in a $125 million investment scheme.  In 2010, the SEC filed fraud charges against Timothy McGinn and David Smith to stop their Ponzi scheme and freeze their assets.  McGinn and Smith were also charged criminally and found guilty.  The SEC’s OIP alleges that 10 brokers who recommended the unregistered investment products involved in the scheme misled their customers.  They also overlooked red flags that should have prompted them to do more due diligence into the securities they were recommending to their customers.  Continue reading →

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SEC Charges Frank Spinosa and TD Bank for their Role in Rothstein Ponzi Scheme

Posted on September 24, 2013 by BraunHagey & Borden

SEC v. Frank Spinosa,  Case No. 0:13-cv-62066 (S.D. Fla.); In the Matter of TD Bank, N.A., Admin Proc. No. 3-15512.  On September 23, 2013, the SEC announced fraud charges against TD Bank and former executive Frank Spinosa for their roles in the Scott Rothstein Ponzi scheme.  Rothstein is currently serving a 50-year prison sentence.  According to the SEC’s Order Instituting Proceedings (“OIP”) and complaint, Rothstein claimed to represent plaintiffs who settled their legal claims for large sums payable over time by large corporate defendants.  He pretended that these plaintiffs were willing to sell their periodic payments to investors at a discount in exchange for one lump-sum payment.  In reality, there were no plaintiffs, defendants or settlements.  Continue reading →

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SEC Charges Filmmaker Lawrence Robbins with Insider Trading

Posted on September 23, 2013 by BraunHagey & Borden

SEC v. Lawrence J. Robbins, (S.D.N.Y.).  On September 23, 2013, the SEC announced insider trading charges against independent filmmaker Lawrence Robbins.  According to the SEC, Robbins traded in Millennium Pharmaceuticals Inc. and Sepracor Inc. securities based on inside information that he got from his business partner John Michael Bennett before the acquisition announcements by the two companies.  Bennett got the inside information from his friend Scott Allen.  The SEC previously charged Bennett and Allen.  According to the SEC, Allen got inside information before the two acquisitions through his job at a consulting firm that was advising the acquiring company in each deal.  Continue reading →

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SEC Charges Former Qualcomm Executive Jing Wang and his Financial Advisor Gary Yin with Insider Trading

Posted on September 23, 2013 by BraunHagey & Borden

SEC v. Jing Wang and Gary Yin, Case No. 3:13-cv-02270-L-WVG (S.D. Cal.).  On September 23, 2013, the SEC announced insider trading charges against former Qualcomm executive Jing Wang and his financial adviser Gary Yin for trading ahead of major announcements by Qualcomm for more than a quarter-million dollars in profits.  According to the SEC, Wang and Yin became friends and were members of the same church.  Wang asked Yin to manage his money and opened a number of brokerage accounts at Merrill Lynch’s San Diego branch office.  Wang disclosed the accounts to Qualcomm because he was an officer and was required to pre-clear all Qualcomm trades with the company.  Continue reading →

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SEC Charges Stephen Kirkland and his Company The Kirkland Organization with Securities Fraud for Misleading Investors About the Returns on their Investments

Posted on September 23, 2013 by BraunHagey & Borden

SEC v. Stephen L. Kirkland and The Kirkland Organization, Inc., Case No. 1:13-cv-3150-JEC (N.D. Ga.).  On September 23, 2013, the SEC announced fraud charges against Stephen L. Kirkland and his company The Kirkland Organization, Inc. (“TKO”).  According to the SEC, Kirkland and TKO lied to investors and potential investors by telling them:    (a) if they invested through a managed account at Westover Energy Trading Partners, LLC (“Westover”), there would be no risk of losing their investments; (b) they would earn 2% to
3% per month; (c) a New York real estate developer/owner was a manager of Westover; and (d) the New York real estate developer/owner’s substantial wealth would be used to indemnify investors against loss.  The SEC alleges that investors in the United States and England invested at least $800,000 based upon the false statements.  The SEC charged Kirkland and TKO with violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206 (1) and Section 206 (2) of the Investment Advisers Act.   With respect to Kirkland, the SEC further alleges that he, while acting as a control person, induced violations of Section 10(b) of the Exchange Act and Rule 10b-5.

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