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SEC Orders FINRA to Improve Internal Compliance Policies and Procedures
The Securities and Exchange Commission today ordered the Financial Industry Regulatory Authority (FINRA) to hire an independent consultant and undertake other remedial measures to improve its policies, procedures, and training for producing documents during SEC inspections. According to the SEC’s order instituting settled administrative proceedings, certain documents requested by the SEC’s Chicago Regional Office during [...]
SEC Halts Fraudulent Beverly Hills Hedge Fund and Wealth Management Business
The Securities and Exchange Commission obtained an emergency court order on Friday to shut down a Beverly Hills, CA-based hedge fund and wealth management business targeting retirees, university professors, and members of the Christian community. According to the SEC, IU Group Inc., its principal Elijah Bang, and its salesperson Daniel Lee allegedly targeted retirees and claimed [...]
Subprime Auto Loan Lender and Executives Charged with Fraud
On April 14, 2011 the Securities and Exchange Commission charged Massachusetts-based subprime auto loan provider Inofin Inc. and three company executives, Michael Cuomo, Kevin Mann and Melissa George, with misleading investors about their lending activities and diverting millions of dollars in investor funds for their personal benefit. According to the SEC, Inofin illegally raised at least [...]
Investment Adviser Misreports AUM; Principal Had History of Disciplinary Actions
Last week, the U.S. Securities and Exchange Commission ordered a cease-and-desist against Delta Global Advisors, Inc. a registered investment adviser and against its principal Charles P. Hanlon. According to the SEC, Delta misrepresented to existing and prospective investors its eligibility for SEC registration, including that it served as an investment adviser to a registered investment [...]
SEC freezes assets of companies perpetrating a Ponzi Scheme
On March 28, the SEC announced that it obtained a court order freezing the assets of two online payday loan companies and their owner charged with perpetrating a $47 million offering fraud and Ponzi scheme. The SEC alleges that John Scott Clark of Hyde Park, Utah, promised investors astronomical annual returns of 80 percent on [...]
Three firms and four individuals charged for defrauding investors in a boiler room scheme
This week the SEC charged three firms and four individuals involved in a boiler room scheme operating out of Los Angeles that defrauded investors who they persuaded to buy purportedly profitable trading systems. The SEC alleges that representatives of Spyglass Equity Systems Inc. cold-called investors and made false and misleading statements to help raise more than [...]
Hedge fund investment advisory firm charged with a scheme to defraud clients
The Securities and Exchange Commission charged a hedge fund investment advisory firm and its two founders with orchestrating a multi-faceted scheme to defraud clients and failing to comply with fiduciary obligations. The SEC alleges that Eugenio Verzili and Arturo Rodriguez through their firm Juno Mother Earth Asset Management LLC misappropriated client assets, inflated assets under management, [...]
SEC Charges Bay Area Hedge Fund Manager With Misappropriating “Side Pocketed” Assets
The Securities and Exchange Commission alleges that Lawrence R. Goldfarb of Larkspur, California, and his company Baystar Capital Management LLC diverted more than $12 million in investment proceeds to other entities he controlled, ultimately funding a real estate venture and a San Francisco record company. Goldfarb also comingled investor funds in a bank account which he [...]
NASAA proposed changes to the Model Rules re Investment Adviser Custody, Financial Requirements, Recordkeeping and Brochure Delivery
The North American Securities Administrators Association’s (NASAA) Investment Adviser Regulatory Policy and Review Project Group is soliciting comments from interested persons regarding proposed changes to the NASAA model rules pertaining to investment adviser custody, financial requirements, recordkeeping and brochure delivery. The Project Group has been charged with amending these rules to address changes by the U.S. [...]
Published Study on Investment Advisers and Broker-Dealers
Published in January 2011, is a Study on Investment Advisers and Broker-Dealers by the Staff of the United States Securities and Exchange Commission as now required by Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Click on The Study for further details. There are recommendations listed that are designed to address gaps [...]