Other Types of Fraudulent Activity

Ponzi Scheme and Fraudulent Gold Futures Investment Program – Florida Securities and Precious Metals Fraud and Misrepresentation Litigation and FINRA Arbitration Attorney

Published on: July 9, 2013 | By Russell L. Forkey, P.A.

South Florida Securities and Precious Metals FINRA Arbitration and Litigation Attorney:

Securities and Exchange Commission v. John Fowler, Jeffrey Fowler, and Julianne Chalmers, Civil Action No. 8:13-cv-1747-T-17TGW

The Securities and Exchange Commission recently announced that it filed an enforcement action on July 5, 2013 against John Fowler, a convicted felon, Jeffrey Fowler, a former Florida public school teacher, and Julianne Chalmers. The SEC charged John Fowler and Jeffrey Fowler with violations of the antifraud provisions of the federal securities laws. The SEC also charged John Fowler and Julianne Chalmers with registration violations.

SEC Charges NASDAQ for Failures During Facebook IPO – Florida Securities and Investment Violations FINRA Arbitration and Litigation Attorney

Published on: May 29, 2013 | By Russell L. Forkey, P.A.

The Securities and Exchange Commission recently charged NASDAQ with securities laws violations resulting from its poor systems and decision-making during the initial public offering (IPO) and secondary market trading of Facebook shares. NASDAQ has agreed to settle the SEC’s charges by paying a $10 million penalty – the largest ever against an exchange.

Exchanges have an obligation to ensure that their systems, processes, and contingency planning are robust and adequate to manage an IPO without disruption to the market. According to the SEC’s order instituting settled administrative proceedings, despite widespread anticipation that the Facebook IPO would be among the largest in history with huge numbers of investors participating, a design limitation in NASDAQ’s system to match IPO buy and sell orders caused disruptions to the Facebook IPO. NASDAQ then made a series of ill-fated decisions that led to the rules violations.

According to the SEC’s order, several members of NASDAQ’s senior leadership team convened a “Code Blue” conference call and decided not to delay the start of secondary market trading in Facebook with the expectation that they had fixed the system limitation by removing a few lines of computer code. However, they did not understand the root cause of the problem. NASDAQ’s decision to initiate trading before fully understanding the problem caused violations of several rules, including NASDAQ’s fundamental rule governing the price/time priority for executing trade orders. The problem caused more than 30,000 Facebook orders to remain stuck in NASDAQ’s system for more than two hours when they should have been promptly executed or cancelled.

City of South Miami, Florida – Municipal Bonds – Florida FINRA Arbitration and Litigation Attorney

Published on: May 22, 2013 | By Russell L. Forkey, P.A.

City of South Miami, Florida – Tax Exempt Bond – Florida FINRA Arbitration and State and Federal Court Litigation Attorney:

The Securities and Exchange Commission recently charged the City of South Miami, Fla., with defrauding bond investors about the tax-exempt financing eligibility of a mixed-use retail and parking structure being built in its downtown commercial district.

An SEC investigation found that the city of 11,000 residents located in Miami-Dade County borrowed approximately $12 million in two pooled, conduit bond offerings through the Florida Municipal Loan Council (FMLC). South Miami’s participation in those offerings enabled it to borrow funds at advantageous tax-exempt rates. The city represented that the project was eligible for tax-exempt financing in various documents for the second offering that were relied upon by bond counsel in rendering its tax opinion. However, South Miami failed to disclose that it had actually jeopardized the tax-exempt status of both bond offerings by impermissibly loaning proceeds from the first offering to a private developer and restructuring a lease agreement prior to the second offering.

Securities and Investment Fraud – Florida Securities Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Published on: May 8, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission Charges Traders in Massive Kickback Scheme Involving Venezuelan Official

The Securities and Exchange Commission (Commission) recently charged four individuals with ties to a New York City brokerage firm in a scheme involving millions of dollars in illicit bribes paid to a high-ranking Venezuelan finance official to secure the bond trading business of a state-owned Venezuelan bank.

According to the SEC’s complaint filed in federal court in Manhattan, the global markets group at broker-dealer Direct Access Partners (DAP) executed fixed income trades for customers in foreign sovereign debt. DAP Global generated more than $66 million in revenue for DAP from transaction fees – in the form of markups and markdowns – on riskless principal trade executions in Venezuelan sovereign or state-sponsored bonds for Banco de Desarrollo Económico y Social de Venezuela (BANDES). A portion of this revenue was illicitly paid to BANDES Vice President of Finance, María de los Ángeles González de Hernandez, who authorized the fraudulent trades.

Inter Reef, Ltd. d/b/a Profitable Sunrise – Florida Internet Securities Fraud and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: May 1, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Inter Reef, Ltd. dba Profitable Sunrise, Melland Company S.R.O., Color Shock S.R.O., Solutions Company S.R.O. and Fortuna-K S.R.O., Civil Action No. 1:13-CV-1104 (U.S. District Court for the Northern District of Georgia)

Court Enters Preliminary Injunction Against Inter Reef d/b/a Profitable Sunrise and Extends Asset Freeze Order

Recently, the Honorable Thomas W. Thrash of the United States District Court for the Northern District of Georgia issued an order of preliminary injunction against violations of the registration and antifraud provisions of the federal securities laws in the civil action brought by the United States Securities and Exchange Commission against Inter Reef, Ltd. dba Profitable Sunrise and four Czech companies named as relief defendants.

Michael Bozora, Timothy Redpath, Capital Solutions Distributors, LLC and Capital Solutions Management, LP – Florida Investment Fund Fraud and Mismanagement FINRA Arbitration and Litigation Attorney

Published on: May 1, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. True North Finance Corp., et al., Civil Action No. 10-cv-3995 (D. Minn., filed Sept. 21, 2010)

Final Judgments Entered Against Distributor and Investment Adviser

The Securities and Exchange Commission recently announced that a Minnesota federal court entered final judgments by consent against Michael Bozora, Timothy Redpath, Capital Solutions Distributors, LLC (CSD) and Capital Solutions Management, LP (CSM), in a civil injunctive action filed by the Commission on September 21, 2010. Among other things, the judgments order Bozora to pay over $500,000 in disgorgement of ill-gotten gains, Redpath to pay over $600,000 of ill-gotten gains, CSD to pay over $2.8 million of ill-gotten gains, and CSM to pay over $1.3 million of ill-gotten gains, plus pre-judgment interest and civil penalties against each of these Defendants.

Jeffrey Stebbins and Corbin Jones – Florida Stockbroker Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Published on: May 1, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Jeffrey Stebbins and Corbin Jones, Civil Action No. CV 13-755-PHX-SRB

SEC Charges Two Arizona-Based Brokers with Defrauding Investors in Tankless Water Heater Venture

The Securities and Exchange Commission recently filed a complaint in the United States District Court for the District of Arizona, charging two former brokers in Arizona with stealing investments in a project to develop tankless water heaters.

Gregg D. Caplitz and Onsite Strategic Management – Boca Raton, Florida Investment Advisor Fraud and Mismanagement Litigation and FINRA Arbitration Attorney

Published on: March 19, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Gregg D. Caplitz, et al., Civil Action No. 1:13-cv-10612-MLW (D.Mass.)

SEC OBTAINS ASSET FREEZE AGAINST MASSACHUSETTS-BASED INVESTMENT ADVISER STEALING MONEY FROM CLIENTS

The Securities and Exchange Commission recently announced an asset freeze against a Massachusetts-based investment adviser charged with stealing money from clients who were given the false impression they were investing in a hedge fund.

Fred Davis Clark, Jr., David W. Schwarz, Cristal R. Coleman, Barry J. Graham and Ricky Lynn Stokes – Florida Real Estate Investment Litigation Attorney

Published on: January 31, 2013 | By Russell L. Forkey, P.A.

SEC Charges Real Estate Executives in Florida-Based $300 Million Investment Scheme

The Securities and Exchange Commission recently charged five former real estate executives who defrauded investors into believing they were funding the development of five-star destination resorts in Florida and Las Vegas when they were actually buying into a Ponzi scheme.

The SEC alleges that Cay Clubs Resorts and Marinas raised more than $300 million from nearly 1,400 investors nationwide through a network of hundreds of sales agents, marketing seminars, and podcasts that touted the profitability of purchasing units at Cay Clubs resort locations. Investors were promised immediate income from a guaranteed 15 percent return and a future income stream through a rental program that Cay Clubs managed. But instead of using investor funds to develop resort properties and units, the Cay Clubs executives used new investor deposits to pay leaseback returns to earlier investors. Meanwhile they paid themselves exorbitant salaries and commissions totaling more than $30 million, and investor funds also were misused to buy airplanes and boats. While still advertising itself as a profitable venture, Cay Clubs eventually abandoned its operations. Many investors’ properties went into foreclosure.

Raymond Y.H. Park – Cooper City, Florida Investment Advisor and Broker/Dealer Fraud, Mismanagement and Breach of Fiduciary Duty FINRA Arbitration and Litigation Attorney

Published on: January 23, 2013 | By Russell L. Forkey, P.A.

In the Matter of Raymond Y.H. Park

Recently, the Securities and Exchange Commission (the “Commission”) issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Raymond Y.H. Park. The Order finds that Park was the head trader for Tiger Asia Fund, L.P., and Tiger Asia Overseas Fund, Ltd., two private funds (the Funds), managed by Tiger Asia Management, LLC (TAM), an investment adviser registered with the Commission. The Order further finds that on December 14, 2012, a final judgment was entered by consent against Park, permanently enjoining him from future violations of Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder, in the civil action entitled SEC v. Tiger Asia Management, LLC, et al., 12 cv 07601 (DMC), in the United States District Court for the District of New Jersey.

The Order finds that the Commission’s Complaint in that action alleged that Park engaged in insider trading when TAM entered into wall crossing agreements during December 2008 and January 2009 for three private placements of Chinese bank stocks, subsequently violated the wall crossing agreements by short selling the stocks, and then covered the short positions with private placement shares purchased at a discount. The complaint further alleged that by trading after receiving the material nonpublic information concerning the private placements, Park breached a duty owed to the provider of the private placement information, the placement agents representing the sellers of the securities. The complaint also alleged that Park aided and abetted TAM, Tiger Asia Partners, LLC and Sung Kook Hwang, the portfolio manager of the Funds, in their violations of the Advisers Act. Park, at Hwang’s direction, placed trades in Chinese bank stocks at month’s end in November and December 2008 and January and February 2009 in an attempt to manipulate the price of those stocks to increase assets under management, which in turn would increase management fees during those four months.