SEC Charges Kieran Taylor for Role in Rajaratnam Insider Trading Scheme

Posted on September 23, 2013 by BraunHagey & Borden

SEC v. Kieran Taylor, Case No. 13-cv-6670 (S.D.N.Y.).  On September 20, 2013, the SEC filed insider trading charges against Kieran Taylor alleging he got confidential information indicating that Akamai would fall short of previous revenue projections it made publicly.  Akamai was planning to update its revenue guidance for 2008 when it announced its second quarter financial results on July 30.  Based on the tip, Taylor sold his Akamai stock.  He also tipped Taylor also tipped Danielle Chiesi, a friend who was then a portfolio manager at hedge fund advisory firm New Castle Funds.  Continue reading →

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SEC Charges Advisory Firm Owner Tibor Klein and Stockbroker Michael Shechtman with Insider Trading Ahead of Merger Announcement

Posted on September 23, 2013 by BraunHagey & Borden

SEC v. Tibor Klein and Michel R. Shechtman, Case No. 9:13-cv-80954 (S.D. Fla.).  On September 20, 2013, the SEC announced insider trading charges against Tibor Klein, president of Klein Financial Services and his stockbroker friend Michael Shechtman.  The SEC alleges that one of Klein’s clients, a lawyer with King Pharmaceuticals, tipped Klein with confidential information about Pfizer’s anticipated acquisition of King Pharmaceuticals.  Klein started buying a lot of King Pharmaceuticals’ stock right away.  According to the SEC, Klein also tipped his best friend, Shechtman, with the confidential inside information about King Pharmaceuticals.  Continue reading →

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SEC Charges Benjamin S. Staples and his Son Benjamin O. Staples with Profiting from Terminally Ill Patients

Posted on September 20, 2013 by BraunHagey & Borden

SEC v. Benjamin S. Staples and Benjamin O. Staples, Case No. 3:13-2575-MBS.  On September 20, 2013, the SEC announced fraud charges against Benjamin S. Staples and Benjamin O. Staples.  The SEC alleges that the Stapleses lured terminally ill people into their scheme by offering to pay their funeral expenses if they agreed to open the joint accounts and sign documents that relinquished their ownership rights to the accounts or any assets in them.  According to the SEC’s complaint, the Stapleses ran what they called the Estate Assistance Program.  Using investor money, they bought approximately $26.5 million in bonds from numerous issuers.  Continue reading →

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JPMorgan Pays $200 Million to Settle Charges Related to its London Whale Trading Loss and is Forced to Admit Wrongdoing

Posted on September 20, 2013 by BraunHagey & Borden

In the Matter of JPMorgan Chase & Co., Admin. Proc. File No. 3-15507.  On September 19, 2013, the SEC announced it issued a settled Order Instituting Proceedings (“OIP”) against JPMorgan Chase & Co.  According to the OIP, the Sarbanes-Oxley Act of 2002 established requirements for public companies such as creating and maintaining a system of internal controls to provide investors with reasonable assurances that their financial statements are reliable, and ensuring that senior management provides important information to key decision makers such as the board of directors.  According to the OIP, after its portfolio began to substantially decline in value, JPMorgan undertook internal reviews to determine the effectiveness of the Chief Investment Office’s (“CIO”) internal controls.  Continue reading →

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SEC Charges Money Manager Frederick Scott with Defrauding Investors

Posted on September 17, 2013 by BraunHagey & Borden

SEC v. Frederick D. Scott, Case No. CV 13-5113 (E.D.N.Y.).  On September 13, 2013, the SEC announced fraud charges against Fredrick D. Scott whose firm ACI Capital Group was registered as an investment adviser.  In a parallel criminal action, the U.S. Attorney’s Office for the Eastern District of New York today announced Scott has pleaded guilty to criminal charges for, among other things, making false statements to SEC examiners.  The SEC alleges that Scott told investors that ACI would provide multi-million dollar loans to people seeking bank financing.  Continue reading →

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SEC Obtains Emergency Relief against Investment Adviser Paul Marshall for Misappropriating Client Funds

Posted on September 13, 2013 by BraunHagey & Borden

SEC v. Paul Marshall, Bridge Securities, LLC a/k/a Bridge Financial, Bridge Equity, Inc. and FOGFuels, Inc., Case No. 1:13-CV-3032 (N.D. Ga.).  On September 12, 2013, the SEC announced it filed an action seeking a temporary restraining order and other emergency relief, charging Paul Marshall and his three companies, Bridge Securities, LLC, Bridge Equity, Inc. (collectively, the “Bridge Entities”) and FOGFuels, Inc., with misappropriating client funds.  The SEC alleges that Marshall, an investment adviser representative of the Bridge Entities, stole $2 million from his clients.  Continue reading →

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SEC Defendant Indicted in $30 Million Ponzi Scheme

Posted on September 12, 2013 by BraunHagey & Borden

SEC v. Creative Capital Consortium, LLC, et al., Case No. 08-81565-CIV-HURLEY.  On September 10, 2013, the SEC announced that the U.S. Attorney’s Office for the Southern District of Florida filed a 40-count indictment against George Louis Theodule.

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SEC Files Settled Action against Brian Elrod and Nova Dean Pack in Fraudulent Promissory Note Offering

Posted on September 12, 2013 by BraunHagey & Borden

SEC v. Brian G. Elrod and Nova Dean Pack, Case No. 13-CV-02449WYD (D. Colo.).  On September 9, 2013, the SEC announced it filed settled fraud charges against Brian G. Elrod in connection with a promissory note offering for which Nova Dean Pack acted as an unregistered broker.  According to the SEC, Elrod and Pack raised $2 million from investments in high-yield promissory notes issued by Elrod’s holding company.  The SEC alleges that Elrod promised investors annual returns ranging from 12% to 24%.  Elrod also told investors that the proceeds from their promissory notes would be used to expand a group of financial services companies owned and managed by Elrod.  Continue reading →

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SEC Charges Brandt A. Lawler, Michael S. Lawler, Ryan G. Lawler, Timothy J. Lawler, and Pamela Hass in Offering Fraud

Posted on September 12, 2013 by BraunHagey & Borden

SEC v. Projaris Management, LLC et al., Case No. 1:13-cv-00849 (D.N.M.).  On September 9, 2013, the SEC announced fraud charges against Projaris Management, LLC, Victory Partners Financial, Joe G. Lawler, Brandt A. Lawler, Michael S. Lawler, Ryan G. Lawler, Timothy J. Lawler, and Pamela Hass.  The SEC alleges that Projaris, Victory and the Lawlers defrauded investors out of more than $835,000.   According to the SEC, the defendants convinced investors to put their money in a pooled investment that supposedly invested commodities and real estate and a fund that invested overseas.  However, the defendants stole the money for their personal use.  In addition, the offerings were not covered by a registration statement filed with the SEC.  Lastly, Hass solicited investors for Projaris, but was not a registered broker-dealer.  The SEC charged Projaris, Victory, and the Lawlers with violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933.  The SEC also charged Projaris, Victory, Joe Lawler, and Hass with violating Section 5 of the Securities Act.  In addition, the SEC alleges that Joe Lawler and Hass violated Section 15(a) of the Exchange Act by acting as unregistered broker-dealers.  The SEC seeks injunctive relief, disgorgement, and civil monetary penalties.

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SEC Gets Emergency Relief Prime Bank Scheme

Posted on September 9, 2013 by BraunHagey & Borden

SEC v. Bernard H. Butts, et al., Case No. 13-23115-CIV-MARTINEZ (S.D. Fla.).  On September 9, 2013, the SEC announced that it has obtained an emergency asset freeze and temporary restraining order in connection with a prime bank investment scheme.  According to the SEC, Bernard H. Butts, Jr.; Fotios Geievelis, Jr., a/k/a Frank Anastasio; Worldwide Funding III Limited LLC; Douglas J. Anisky; Sidney Banner, Express Commercial Capital LLC; and James Baggs raised more than $3.5 million.  The SEC alleges that Geivelis, on behalf of Worldwide Funding, told investors that they would receive profits of around $8.7 million on investments of $60,000-$90,000 in less than two months.  Continue reading →

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