SEC Charges Green Former Green Mountain Coffee Employee Chad McGinnis and His Friend Sergey Pugach

Posted on August 2, 2013 by BraunHagey & Borden

SEC v. Chad C. McGinnis and Sergey Pugach, Case No. 3:13-cv-1047 AVC (D. Conn.).  On August 2, 2013, the SEC announced insider trading charges against former Green Mountain Coffee Employee Chad McGinnis and his friend Sergey Pugach.  According to the SEC, McGinnis bought Green Mountain Coffee out-of-the-money options before the company made earnings announcements.  He also tipped Pugach, who then traded in his own and his mother’s accounts.  McGinnis and Pugach made $7 million trading on inside information.  Continue reading →

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SEC Prevails at Securities Fraud Trial Against Former Goldman Vice President Fabrice Tourre

Posted on August 2, 2013 by BraunHagey & Borden

Yesterday, the jury reached a much-anticipated verdict in the SEC’s case against Fabrice Tourre.  The details are here.

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SEC Charges Cedric Cañas Maillard and Julio Marín Ugedo with Insider Trading

Posted on July 31, 2013 by BraunHagey & Borden

SEC v. Cedric Cañas Maillard and Julio Marín Ugedo, Case No. 13-cv-5299 (S.D.N.Y.).  On July 31, 2013, the SEC announced insider trading charges against Cedric Cañas Maillard, a former executive advisor to the CEO of Spanish bank Banco Santander S.A., and Julio Marín Ugedo, a former judge in Spain.  The SEC alleges that mining company BHP Hilton offered to purchase all of the stock of Potash Corporation, a producer of fertilizer minerals, for $130 per share.  Continue reading →

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SEC Charges Sandeep Aggarwal With Tipping S.A.C. Capital Portfolio Manager

Posted on July 30, 2013 by BraunHagey & Borden

SEC v. Richard Lee and Sandeep Aggarwal, Case No. 13-cv-5185 RMB (S.D.N.Y.).  On July 30, 2013, the SEC announced it amended the complaint filed last week against S.A.C.
portfolio manager Richard Lee to add charges that Sandeep Aggarwal tipped Lee.  According to the SEC, Aggarwal learned confidential details about negotiations on a Microsoft-Yahoo deal from a friend who worked at Microsoft.  Aggarwal tipped Lee the next day.  When the information was publicly reported later, Yahoo’s stock price rose significantly giving Lee and S.A.C. Capital substantial profits from Yahoo stock Lee purchased after getting the tip from Aggarwal.  The SEC alleges that Aggarwal covered both Microsoft and Yahoo for his research firm and had an inside source at Microsoft.  The insider source fed him the details on the Microsoft-Yahoo deal which he immediately shared with Lee.  The SEC charged Aggarwal and Lee with violating Section 10(b) of the Exchange Act and Rule 10b-5.  The SEC seeks disgorgement, civil monetary penalties and injunctive relief.

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SEC Approves JOBS Act Requirement to Lift General Solicitation Ban

Posted on July 12, 2013 by BraunHagey & Borden

On July 10, 2013, by a 4-1 vote, the SEC eliminated the prohibition of general solicitations and advertisings for securities offerings exempt from the SEC’s registration requirement.  The new rules become final 60 days after publication in the federal register.  The change is significant because the majority of private equity and hedge funds raise money through offerings that are exempt from the SEC’s costly and time consuming registration requirements.  Previously, if a fund wanted to advertise the offering, they would have to register the offering or face an enforcement action by the SEC. Continue reading →

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SEC Freezes Assets of Kevin G. White in Alleged Forex Trading Scam

Posted on July 12, 2013 by BraunHagey & Borden

SEC v. Kevin G. White et al., Case No. 4:13-cv-00383 RAS (E.D. Tex.).  On July 12, 2013, the SEC announced it obtained an emergency court order to freeze the assets of Kevin G. White and his companies.  The Commodity Futures Trading Commission announced parallel charges.  The SEC alleges that White raised investor money through two entities that he owns and controls: KGW Capital Management and Revelation Forex Fund.   According to the SEC, White and his companies publicly solicited investment money through websites, press releases, and presentations to prospective investors.  Allegedly, they told investors that Revelation Forex was a $1 billion hedge fund that achieved astronomical returns.  Continue reading →

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SEC Freezes Assets of Insider Traders in Onyx Pharmaceuticals Options

Posted on July 11, 2013 by BraunHagey & Borden

SEC v. One or More Unknown Traders in the Securities of Onyx Pharmaceuticals, Inc., Case No. 13 CIV 4645 (S.D.N.Y.).  On July 9, 2013, the SEC announced it obtained an emergency court order to freeze the assets of traders using foreign accounts who traded in the securities in Onyx Pharmaceuticals, Inc. based on inside information.  The SEC alleges that on June 30, 2013, Onyx announced that it had received, but rejected, an offer from Amgen to buy all of Onyx’s outstanding stock.  Onyx also announced that it authorized its financial advisors to seek potential acquirers.  After the announcement, Onyx’s share price soared by more than 50%.  Continue reading →

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SEC Obtains Emergency Freeze in Connection with Illegal Sales of Biozoom Stock

Posted on July 3, 2013 by BraunHagey & Borden

SEC v. Magdalena Tavella et al., Case No. 13 CIV 4609 (S.D.N.Y.).  On July 3, 2013, the SEC announced charges against eight Argentine citizens for selling millions of shares of  Biozoom.  The SEC also obtained an emergency order to freeze assets in the U.S. brokerage accounts of the eight defendants and two other Argentine citizens who had Biozoom shares but had not yet sold them.  Last week, the SEC suspended trading in Biozoom. According to the SEC, the ten defendants received about one-third of the outstanding shares of Entertainment Art, which later became Biozoom.  Eight defendants allegedly sold millions of shares which yielded almost $34 million, nearly half of which was wired to overseas bank accounts.  Continue reading →

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SEC Charges Medical Imaging Device Company Imaging3 and its Founder Dean Janes with Fraud

Posted on June 27, 2013 by BraunHagey & Borden

SEC v. Imaging3, Inc. & Dean Janes, Case No. CV13-04616 GAF (AJWx) (C.D. Cal.).  On June 26, 2013, the SEC announced it filed fraud charges against Imaging3, Inc. and its founder Dean Janes.  Janes held a conference call with investors after the FDA denied clearance for Imaging3 to market one of its devices.  This was the third time the FDA denied clearance citing safety concerns.  The SEC alleges that Dean mislead investors by telling them that the FDA’s issues were “not substantive” and largely “administrative.”  According to the SEC, Janes did not discuss the substantive safety concerns raised by the FDA about the device.  Continue reading →

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SEC Charges Robert Hurd and His Company in Investment Scheme Touting Alzheimer’s Treatment

Posted on June 24, 2013 by BraunHagey & Borden

SEC v. Robert Hurd, Your Best Memories International Inc. and Kenneth Gross, Case No. 13-CV-04464-RGK (JCGx) (C.D. Cal.).  On June 21, 2013, the SEC announced it filed charges against Your Best Memories International Inc. and its president, Robert Hurd for fraud.  The SEC also charged Kenneth Gross for selling Your Best Memories stock without being registered as a broker-dealer.  The SEC alleges that Your Best Memories claimed to be raising money from investors on behalf of Moving Pictures, Inc., which was developing products intended to improve memory in individuals suffering from Alzheimer’s disease, dementia or memory loss.  Continue reading →

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