Category: SEC

Mohlman Asset Management Owner Charged by SEC

Mohlman Asset Management Owner Charged by SEC

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The U.S. Securities and Exchange Commission (SEC) has charged Mohlman Asset Management owner and manager Louis G. Mohlman, Jr. with misleading investors and ordered him to pay $100,000 in civil penalties. The agency also charged two of the Registered Investment Advisor (RIA) firms managed by Mohlman Asset Management with engaging in conflicted transactions and making false statements to investors.

Complaint Alleges Mohlman Repeatedly Misled Investors

The SEC alleges that between 2012 and 2015 Mohlman used money from two private funds managed by his company, Mohlman Asset Management, to satisfy payments to third parties and make a $150,000 unsecured loan. The loan constituted approximately 16% of the fund’s portfolio. Though SEC examiners told Molham that the loan should be fully disclosed to investors, he still misled investors on the nature of the loan.

The complaint also alleges that the fund owner encouraged his clients to invest in his “Roth IRA strategy,” which purportedly was backed by tax and legal opinions acquired from accounting and law firms. These statements were false, and in fact, the SEC cites one accounting firm principal who told Mohlman that he would not endorse such products.

The complaint also alleges that Mohlman Asset Management filed materially inaccurate forms with the SEC, had inadequate compliance programs, and failed to comply with the regulator’s “Custody Rule.”

Mohlman Asset Management Fund to Pay Penalties

Louis G. Mohlman, Jr. has neither admitted nor denied the SEC’s allegations, but he and his firm have agreed to a settlement subject to court approval. Mohlman will pay a $100,000 civil penalty and disgorge $862.03 in ill-gotten gains, plus $75.34 in interest.

Are You a Victim of Stockbroker Misconduct?

If you lost money as a result of stockbroker misconduct or think you may be a victim of securities fraud, contact a qualified securities fraud attorney today.

Call a Securities Fraud Attorney Today

If you are looking for an attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our securities fraud attorneys represent clients nationwide and can help you recover your investment  losses.

Contact an securities fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

David Aubel Pleas Guilty in Green Energy Case

David Aubel Pleas Guilty in Green Energy Case

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David Aubel has pled guilty in Massachusetts federal court to arranging a 2012 pump-and-dump scheme to manipulate the stock price of a waste and recycling company.

David Aubel, 59, admitted to securities fraud, wire fraud, and conspiring to commit those crimes with a New Hampshire-based partner to exploit the penny stock of Green Energy Renewable Solutions Inc. His partner, Robert J. Raffa, pled guilty in September.

Green Energy Pump-and-Dump Scheme

Aubel and Raffa allegedly bought millions of Green Energy shares and used four foreign entities to hide their controlling interest from the U.S. Securities and Exchange Commission. Prosecutors claim that the pair drove up the price of the shares by hiring a stock promoter to advertise the business in two rounds of email blasts and by making end-of-day share purchases.

When the price spiked during these promotional campaigns, Aubel and Raffa sold their shares. The pair had planned to sell substantially more through someone they believed to be a corrupt stockbroker, who actually was undercover FBI agent Christopher J. Burke.

According to a 2016 indictment and an affidavit from Burke, he caught the pair attempting to give brokers kickbacks for selling Green Energy shares.

Sentencing Scheduled for 2018 for David Aubel

The judge has scheduled sentencing for David Aubel for March 2018. Under the plea deal, Robert J. Raffa agreed with prosecutors’ assessment that he and his business partner stole more than $1.6 million. Under the deal, the government agreed not to appeal a prison sentence of 51 months or more and Aubel agreed not to appeal a sentence of 63 months or less.

Aubel’s partner Raffa has jointly agreed with prosecutors to spend one to three years behind bars, according to his plea agreement.

Investors Who Lost Money Coming Forward

Prosecutors have worked to contact potential victims of the Green Energy pump-and-dump scheme. To date, the government has contacted about 500 people who lost $500 or more. At least 55 sizable investors from across the U.S. have responded so far, claiming they were swindled out of a total of $238,000. Many other investors who lost smaller amounts also have come forward.

Have You Lost Money in an Investment Scheme?

If you believe you have been the victim of an investment scheme, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

SEC Says Adviser Jay Kelter Conned $1.4M from Retiree

SEC Says Adviser Jay Kelter Conned $1.4M from Retiree

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The U.S. Securities and Exchange Commission (SEC) and federal prosecutors allege that former investment adviser Jay Costa Kelter defrauded a retiree out of about $1.4 million. The complaint says he used the money to pay off other clients and family and to buy a Bentley.

Kelter Indicted and Sued by SEC

In November 2017, former financial adviser Jay Costa Kelter was indicted and subsequently sued by the SEC in Tennessee federal court for allegedly lying about working at brokerage firm TD Ameritrade. It was there that Kelter purportedly convinced 75-year-old widowed retiree to open accounts, which he then took advantage of. According to prosecutors, Kelter allegedly went on to make unauthorized transactions, transferred client funds to himself and his former firm, BEK Consulting Partners LLC, and paid off other clients, including his stepmother. Kelter was indicted by federal prosecutors on 22 counts of wire fraud, mail fraud and securities fraud. For each count he faces up to 20 years in prison and up to a $5 million fine if convicted.

According to the SEC complaint, Kelter began providing financial advice to the client in 2011. He convinced the client to invest “a substantial portion” of her life savings—more than $3.1 million—with him, despite the client’s dependence on investments for income. From 2013 to 2016, Kelter then allegedly stole more than $1.4 million from her. After the client became aware of the misappropriated funds, Kelter signed an agreement promising to return the $1.4 million in September 2015. Almost a year later, in November 2016, the client sued Kelter in Tennessee federal court over the investments he made on her behalf.

The client’s lawsuit was stayed after Kelter filed for Chapter 7 bankruptcy in February.

Kelter Also Allegedly Defrauded Other Retiree Clients

The SEC also alleged in a separate civil complaint that Kelter violated federal securities law. The complaint states that Kelter defrauded several other retirement-age clients out of thousands of dollars. That money was spent on a family vacation, rent, and day-to-day living expenses.

Have You Lost Money with Jay Costa Kelter?

If you believe you have been the victim of Jay Costa Kelter or an investment scheme, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or free consultation to review your rights and options.

California Couple Charged With Identity & EB-5 Fraud

California Couple Charged With Identity & EB-5 Fraud

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The U.S. Department of Justice has announced that a California couple has been indicted on visa fraud and identity theft charges. The couple, Jennifer Yang and Daniel Wu, allegedly swindled the federal government by faking investment forms and creating employees to create the illusion that their companies were viable entities under the EB-5 program.

Couple Commits EB-5 Fraud

From 2009 to 2016, Jennifer Yang and Daniel Wu allegedly defrauded the government through the EB-5 visa program by creating supposedly legitimate companies that were classified as new commercial enterprises. They also received at least $4 million from seven foreign investors.

Yang allegedly founded Capital Law Group LLP as a means to represent people seeking to become residents under the EB-5 program and received nearly $150,000 in fees. While representing these investors, she directed their investments to four companies owned by herself and Wu, 1-855-Lawyers Inc., 81 Law Inc., 81 Doc Inc. and Searchcaser Inc.

Yang and Wu Also Committed Identity Fraud

According to the indictment, Yang and Wu allegedly submitted false I-526 and I-829 petitions by mail using the personal identifying information of third-party individuals without their knowledge or consent. The petitions were submitted to give the impression that the foreign investments had created new employment opportunities, which is the main purpose of the EB-5 program.

The EB-5 program is a federal program that allows foreign investors and immediate family members to receive a pathway to citizenship by investing $1 million in a commercial enterprise or $500,000 in certain regions with low employment rates.

The falsified documents are investor documents provided to the government to provide background information on the investor and to apply for legal permanent residency in the U.S.

Have You Lost Money in an Investment Scheme?

If you believe you have been the victim of an investment scheme, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Penny Stock Pump-and-Dump Scheme Results in $13.7M Fine

Penny Stock Pump-and-Dump Scheme Results in $13.7M Fine

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A California federal judge has ordered an attorney accused by the U.S. Securities and Exchange Commission (SEC) of acquiring millions from investors in a penny stock pump-and-dump scheme to pay $13.7 million. The $13.7 million is alleged to be the attorney’s profits from the scheme plus interest. The attorney didn’t appear in court to contest the charges.

Attorney Sued in Penny Stock Pump-And-Dump Scheme

Attorney Marcus A. Luna was sued by the SEC in 2016 for profiting from price increases of worthless, unregistered securities for companies Umax Group Corp. and Azure Holding Group Corp.

Luna used a series of shell companies and brokerage accounts to hide his control of the two companies, which were touted as being run by his co-conspirator Norrell Walker. According to the SEC, Luna and Walker were listed as the majority shareholders of Umax and Azure.

Walker ran an unregistered stock promotion company with several locations where operators cold-called customers and tried to convince them to buy the stocks. When investors agreed to buy the stocks, Walker would notify Luna, who would fill the orders with his shares through an offshore brokerage.

Luna and Walker artificially inflated the prices of the stock of two companies. Once Walker and his sales force stopped promoting Umax and Azure stock, the share prices and volume plummeted for both companies.

In addition to the pump-and-dump scheme, Walker’s telemarketers were paid double-digit commissions. According to the SEC, the total amount of hidden commissions was about $2.8 million.

Attorney Also Guilty of Wire Fraud and Prior Scams

Luna was arrested and pled guilty to a wire fraud charge over the same scheme and is currently awaiting sentencing. He has been suspended from the bar.

Prior to this case, the SEC claims that Luna was previously ordered to pay $7 million and barred from participating in penny stock offerings in 2014 for his role in a similar fraud scheme. To date, he hasn’t paid that fine.

Have You Lost Money to Securities Fraud?

If you believe you have been the victim of securities or other investment schemes, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for a securities fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our securities fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact a securities fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

SEC Says Quigley Brothers Stole $855K from Investors

SEC Says Quigley Brothers Stole $855K from Investors

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The U.S. Securities and Exchange Commission (SEC) has filed a federal suit in New York alleging that Michael and Brian Quigley stole approximately $855,000 from investors who thought they were investing in penny stock companies, investment funds, and blue-chip companies.

In a complaint filed August 10th, the SEC alleges that between 2003 and 2012, the Quigley brothers misled at least four different investors to believe their money was going toward companies about to go public. But the Quigleys pocketed the money.

According to the SEC, the two brothers, along with another brother, William Quigley, convinced investors to wire money to bank and brokerage accounts. To reassure investors, the brothers forged documents and account statements and made up fake firms and fake colleagues.

In March of this year, William Quigley admitted to stealing more than $500,000 from unsuspecting investors and agreed to be barred from participating in penny stock offerings and from associating with broker-dealers. He is a former Trident Partners Ltd. chief compliance officer.

The SEC is urging the court to bar the pair from participating in penny stock offerings and to order the brothers to turn over all the ill-gotten gains, while also paying prejudgment interest and civil penalties.

Are You the Victim of Investment Fraud?

If you believe you have been the victim of investment fraud, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Oracle Investment Research

Oracle Investment Research Exec Charged by SEC

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The U.S. Securities and Exchange Commission (SEC) issued a settlement order last week in the case of an Oracle Investment Research executive who was charged with misleading clients. 

The Hawaii-based investment adviser, Laurence I. Balter, will pay over $550,000 to end the SEC case.  The securities regulator claimed that Balter defrauded his clients by cherry-picking profitable trades for himself, misrepresenting his management fees, and straying from his fund’s investment policies.

Under the settlement terms, Laurence I. Balter of Oracle Investment Research will pay the SEC almost $490,000 in disgorgement along with a $50,000 civil penalty and more than $10,000 in interest.

Oracle Investment Research Exec Mislead Clients

The Oracle Investment Research case of Laurence I. Balter dates back to October of 2016 when the SEC first announced fraud charges against the investment adviser.  The charges accused him of “cherry-picking” profitable trades for his own account rather than a client’s accounts, while also misleading clients about fees and investments risks.

Jina L. Choi, Director of the SEC’s San Francisco Regional Office stated at the time of the announcement of the charges in October, “We allege that Balter reaped more than a half-million dollars in ill-gotten gains by siphoning winning trades from his clients and withdrawing more than his fair share of management fees.”

Balter, through his firm Oracle Investment Research, purchased equities and options in an omnibus account, then waited to allocate the trades until after they were executed. By doing so, Balter knew which trades were profitable. He then allocated profitable trades to his own accounts and unprofitable trades to his client accounts.

In addition to this, Balter lied to clients regarding fees charged. The SEC alleges that despite telling clients that they would not pay advisory fees and fund management fees, Balter charged the clients for the fees anyway.

He also allegedly made trades that deviated from several fundamental investment limitations, ultimately resulting in a non-diversified portfolio that resulted in significant investor losses.

Did You Invest with Oracle Investment Research?

If you invested with Laurence I. Balter and/or his Hawaii-based firm Oracle Investment Research, and believe that you have been the victim of fraud, contact a qualified securities fraud attorney today.

Call an Investment Fraud Attorney Today

If you are looking for an attorney to review your rights and options, the lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerages firms for their wrongful actions.

Contact an attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Hamilton Ponzi-Scheme Defendant Tries to Slow Down Case

Defendant in Hamilton Ponzi Scheme Tries to Slow Court Case

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Shortly after “Hamilton,” the musical about the life of Alexander Hamilton, one of America’s founding fathers, opened on Broadway it became a smash hit with ticket prices soaring. A bona fide phenomenon, fans have waited hours for lottery-based tickets or paid upwards of $2,000 to get a seat in the theater.

With tickets extremely difficult to come by, Joseph Meli and his co-conspirator Matthew Harriton saw an opportunity to make money. The two conspirators sought investments from investors with the promise that they had an agreement with the musical’s producer to purchase 35,000 tickets to be resold for a profit, with a second agreement that they had the rights to purchase 250,000 tickets to an upcoming “Harry Potter” Broadway play.

Neither Meli nor Harriton had access to such tickets, yet they still convinced 100 investors to give them nearly $97 million. Of that money, approximately $59 million was paid out in Ponzi-style payments as purported investment returns to earlier investors, while Harriton took $1.3 million in investor funds and Meli used $5 million to spend on jewelry, cars, wine, and other high-end merchandise.

Hamilton Ponzi-Scheme Defendant Tries to Slow Down Case

Meli is now in court trying to stay the case brought by the Securities & Exchange Commission (SEC), arguing that the criminal case also brought against him should proceed first so that he can preserve his right against self-incrimination.

Although the SEC has agreed to parts of Meli’s stay request, it is fighting certain aspects of it, including asking for a receiver, the issuance of third-party subpoenas, and forcing Meli to answer the SEC’s amended complaint.

Did You Invest in the Hamilton Ponzi Scheme?

If you invested with Joseph Meli or Matthew Harriton, or believe you have been the victim of another Ponzi scheme, you may have legal rights that require your attention and you should contact a qualified investment fraud attorney immediately.

Call a Ponzi Scheme Attorney Today

Contact an attorney at Dimond Kaplan & Rothstein, P.A. , our partners here at The Fraud report, today to schedule an appointment or consultation to review your rights and options.

With offices in Los Angeles their securities lawyers have helped stockbroker fraud victims throughout Burbank, Sherman Oaks, Thousand Oaks, Calabasas and Santa Barbara, and recovered over $100 million from banks and brokerages firms for their wrongful actions.

 

SEC Disclosure Rules may change very soon.

Acting SEC Chair to Ease SEC Disclosure Rules

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SEC Disclosure Rules to Change

In an attempt to fulfill deregulation promises made by the current Presidential administration, acting U.S. Securities & Exchange Commission (SEC) Chair Michael Piwowar has set his sights on certain Dodd-Frank disclosures. He has invited input on rules relating to conflicts minerals and executive pay ratios, steps that could decrease reporting requirements for public companies.

Although somewhat unusual for an interim chair to take an active role in shaping policy, some say the move is consistent with expectations from the new President and Congress who are determined to roll back “onerous” requirements currently in place.

Congress already has proposed legislation entitled The Financial Choice Act, which would scale back several Dodd- Frank reforms, including the aforementioned conflicts minerals and executive-pay ratio disclosures. Acting Chair Piwowar has invited comment on both rule change proposals.

He also ordered SEC staff to reconsider whether the agency’s guidance regarding conflicts minerals put in place in 2014 was still valid, or if change was needed. As it currently stands, in order to comply with Dodd-Frank requirements, certain public companies are required to make an effort to determine whether their products contain minerals mined in Central African war zones. Piwowar has called the rule “misguided,” claiming it has done nothing to stop violence while harming legitimate mining operations in the area. Further, he also sought to reconsider implementation of the rule that currently requires companies to disclose what their CEO makes compared to the average company worker.

Stay Informed about SEC Disclosure Rules

Check back here for regular updates regarding proposed rule changes and reporting requirements. One thing is for certain: SEC disclosure rules likely will change. If you believe your broker or brokerage firm has failed to abide by the current rules, you may have certain legal rights that require your immediate attention.

Call a Los Angeles Securities Fraud Attorney Today

Contact an experienced Los Angeles securities attorney today for a consultation to discuss your rights and options and get informed about SEC Disclosure Rules.

Investment advisers often fail to follow SEC Compliance.

5 Areas Where Investment Advisers Fail SEC Compliance

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The Securities & Exchange Commission (SEC) released a report detailing five major areas in which investment advisers typically fall short in terms of SEC compliance, and encouraging advisers to strengthen their programs and policies to ensure they are following the letter of the law.

Report shows weak areas in SEC Compliance

The report came from the SEC’s Office of Compliance Inspections and Examinations, which listed the five most common topics cited in deficiency letters sent to investment advisers after OCIE exams. The five most common inadequacies regarded: compliance policies and procedures, regulatory filings, custody of client cash or securities, codes of ethics and record-keeping.

By disseminating their report, the OCIE is hoping that advisers will reflect upon their own practices, policies, and procedures and make improvements where necessary to avoid potential complications.

With respect to compliance issues, OCIE notes that investment advisers tend to fail to tailor compliance manuals to their businesses to account for a particular type of client or trading method. Other problems arose from out of date manuals or the failure to follow compliance rules or conduct annual reviews when required.

Regarding regulatory filings, investment advisers most often ran into trouble with respect to inaccuracies on disclosure forms regarding “custody information, regulatory assets under management, disciplinary history, types of clients and conflicts.” Advisers were also cited for submitting filings late or not at all.

The OCIE noted inadequate compliance with the custody rule – most often when an adviser does not realize that he or she has custody. There were also frequent shortcomings regarding advisers’ required code of ethics, including not describing the code in mandatory disclosures as well as failing to fully identify the personal securities transactions of certain individuals within the firm.

Finally, the report noted issues surrounding compliance with record-keeping rules. Advisers’ books were found to be inaccurate, inconsistent or not kept at all.

Have You Suffered a Loss as a Result of Stockbroker Compliance?

Many of the advisers cited as a result of one of the aforementioned areas took steps to correct their deficiencies. By publishing the report, the OCIE is hoping that other advisers will take proactive steps to avoid getting into trouble of their own.

If you suffered a loss and believe your adviser may be failing in one or more of the above areas, you may have certain legal rights that require your immediate attention.

Call a Los Angeles Securities Attorney Today

Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.