Chicago Madoff Scammer Sentenced to Prison

Chicago Madoff Scammer Sentenced to Prison

dkradmin

An Illinois federal court has sentenced a Chicago man accused of running a Madoff-type scheme to nearly six years behind bars. After the fraudster conned investors of more than $1.7 million, prosecutors have called him the “Chicago Madoff” scammer.

Chicago Madoff Scammer Promised Returns

The Madoff scammer in question is 26-year-old Randall Rye who founded Chicago trading firm “Faster than Light Trading LLC.” Rye claimed that he had developed a trading algorithm guaranteed to produce high returns, but it was a scam. Prosecutors alleged that not only was there no algorithm, Rye also did not invest investor’s money. Instead, he spent investors’ money on expensive tickets to sporting events, trips to foreign locations, and lavish personal expenses.

In April 2017, Rye pled guilty, admitting that he defrauded about 20 investors between September 2015 and February 2017 – including his then-girlfriend’s father and other relatives. Rye was also ordered to pay back $1.7 million to his investors.

Do You Lose Money with Randall Rye?

If you have been a victim of a Ponzi scheme or are suspicious that your broker is not acting in your best interest, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an attorney to review your rights and options, investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerages 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 attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Sanomedics Execs Convicted for Microcap Scheme

Sanomedics Execs Convicted for Microcap Scheme

dkradmin

Two executives of a pet healthcare company, Sanomedics, have been sentenced to time in prison for a microcap scheme that defrauded over 700 investors of $23 million.

Sanomedics Microcap Scheme

The executives are Sanomedics Inc. founder Craig V. Sizer and president Keith Houlihan. The judge sentenced Sizer to 15 years in prison and Houlihan to 9 years for orchestrating a scheme that used false claims to solicit investors to buy shares in their company. The company sold non-contact infrared thermometers for home health care for dogs.

From April 2009 through August 2015 the company made solicited investors to buy stock in the company. The sales pitch included false statements that the stock was safe and that no commissions would be charged. Some victims were even told that TV’s “Dog Whisperer,” Cesar Millan, was heavily invested in the company. The investment fraud scheme operated out of Miami Lakes, Florida, and Marina Del Rey, California.

Sanomedics Associates Also Sentenced

In June 2017, a Miami federal grand jury convicted five other associates for their roles in the Sandomedics Microcap investment fraud scheme. In addition to their role in the Sandomedics scheme, several defendants used a similar investment fraud scheme to sell shares of Fun Cool Free (FCF), a company that claimed to own a smartphone gaming portfolio with hundreds of gaming applications.

Did Your Loose Money to Sanomedics?

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 brokerages firms for their wrongful actions.

Call an Investment Fraud Attorney Today

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.

Federal Regulators Focus on Bad Actor Brokers

Federal Regulators Focus on Bad Actor Brokers

dkradmin

U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) officials have announced that they will focus their attention on broker-dealers in high-risk areas. Both securities regulators hope to crack down on bad actor brokers – brokers who don’t act in the investor’s best interest – and are encouraging firms to help, in hopes of protecting investors.

FINRA President and CEO, Robert Cook, said of FINRA’s programs in a speech recently: “One of their most important purposes is to protect investors from bad actors: those who seek to evade regulatory requirements and harm investors for their own personal gain.”

Three Ways to Regulate Bad Actor Brokers

Cook highlighted three ways that FINRA is enforcing its regulations to protect investors from bad actor brokers, announcing that increased regulation will be done through more exams and enforcement.

Licensing and Registration

To qualify as a broker, a person must pass a series of exams that test knowledge regarding the operation of the markets, the securities industry, and its regulation. The exams are followed by a series of continuing education programs and further exams throughout the broker’s career.

In addition to passing a series of examinations, a broker must also be associated with a broker-dealer firm, which is responsible for supervising the broker. Brokerage firms also must be registered with the SEC and approved by FINRA to operate. Brokerage firms are subject to scrutiny, including a vetting process, operational requirements, and required standards for capital and supervision.

Monitoring and Examinations

For brokers and brokerage firms that meet the regulatory standards and qualifications, FINRA assigns a regulatory coordinator who oversees the firm’s business activities. Brokerage firms are assessed regularly based on core business areas, such as customer dealings, financial integrity, and operations. Non-routine examinations are triggered by customer complaints about bad actor brokers – an area where FINRA is dedicating more resources for regulation.

Discipline and Restitution

In addition to regulatory systems, FINRA has increased surveillance efforts designed to fight against potential fraud or market manipulation. Within FINRA, The Office of Fraud Detection and Market Intelligence (OFDMI) is a specialized central repository that works to gather and evaluate information about misconduct at both the broker and broker-dealer level.

In cases where actions of a firm or an individual pose harm to investors, FINRA intervenes in multiple ways – from requiring brokers to retake examinations to reporting misconduct to law enforcement agencies.

In 2016 alone, 1,434 disciplinary actions were filed against registered individual brokers and firms. And the agency has ordered some $124 million in restitution to investors who have been victims of bad actor brokers and their brokerage firms. Of course, such orders do not necessarily mean that defrauded investors are paid that money. Brokers and brokerage firms only can pay that money if they are able to do so. Many the brokers cannot make the payments and many of the brokerage firms have gone out of business and cannot make any payments to investors.

Bad Actor Broker Regulation In Question

A core issue is whether U.S. regulators and the securities industry are doing enough to protect investors. As seasoned investment fraud and stockbroker misconduct lawyers, Dimond Kaplan & Rothstein’s attorneys see many, many cases of investor abuse, so we firmly believe that regulators are not doing enough to protect investors. In fact, a recent study shows that the percentage of brokers engaged in misconduct is much higher than reported by FINRA. Perhaps the new focus by the agencies will help eliminate some of the misconduct and keep more investors safe.

Did You Lose Money with a Bad Actor Broker?

If you have been a victim of a bad actor broker or are suspicious that your broker is not acting in your best interest, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an 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 brokerages 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 attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

SEC Rules Digital Tokens Are Securities

SEC Rules Digital Tokens Are Securities

dkradmin

Digital Tokens Are Securities When Part of an ICO

A recent report published by the Securities and Exchange Commission (SEC) has confirmed that “coins” or digital tokens are securities. The ruling could affect coins offered in “Initial Coin Offerings” (ICOs).

In the press release accompanying the report, the SEC writes, “Virtual coins or tokens may be securities and subject to the federal securities laws. The federal securities laws provide disclosure requirements and other important protections of which investors should be aware.”

In the release, the SEC also explained that the source of the report focused on an inquiry into a 2016 offering known as “The DAO“. The offering was based on the Ethereum blockchain—a popular form of digital blockchain currency—that quickly fell apart when hackers stole the tokens on offer. While most of the tokens were recovered, legal fallout triggered a SEC investigation. Though no charges have been filed in the case related to The DAO, the report clearly indicates that measures may be taken going forward.

Supporters of ICOs claim that the tokens are not securities, but are instead a form of credit. However, many of the tokens are traded on secondary markets, casting doubt on the claims that tokens issued are not securities.

The report released comes at a time when many companies have completed, or are in the midst of, raising money through the ICO process. The announcement may temper some enthusiasm for ICOs in the U.S.

The Benefits of an ICO

An initial coin offering (ICO) lets a company raise capital from multiple sources, similar to an initial public offering (IPO). With an ICO, rather than issue shares of ownership, the offering company sells digital tokens or “coins” created through blockchain technology.

The popularity of recent ICOs has been well reported, with several companies raising hundreds of millions of dollars in recent months. Their ability to raise such large sums is due in part to the ease with which an ICO can be set up and investor’s desire to invest in blockchain technology.

SEC Calls for Collaboration

Of ICOs going forward, the SEC encouraged an open dialogue, suggesting that there may be other ways to use blockchain for financial gains while also protecting investors.  The SEC stated, “We seek to foster innovative and beneficial ways to raise capital, while ensuring – first and foremost – that investors and our markets are protected.”

Call an Investment Fraud Attorney Today

If you are looking for an attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million for clients for 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 attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

Man Sentenced for Ponzi Scheme Assistance

Man Sentenced for Ponzi Scheme Assistance

dkradmin

Ponzi Scheme Assistance Leads to Prison

A Pennsylvania man has been sentenced in Texas to time in prison for assisting a Mexican businessman in the operations of a $14 million dollar Ponzi scheme.
A federal judge has sentenced 61-year-old David Brian Binder of Pittsburg, PA, to 30 months in federal prison followed by three years of supervised release. In addition, a United States District judge has ordered Binder to pay a $5,000 fine and $503,027.90 restitution.

The Mexican businessman in the case is Roberto Trinidad Del Carpio Frescas, who presented himself to investors as a licensed investment broker and expert in stocks, bonds, futures in oil, gas, precious metals and currency.

Though he was not licensed in the state of Texas as a dealer, Del Carpio collected money from over 100 known investors in Mexico and the United States. From August 2010 to January 2012, Del Carpio pocketed most all of the funds he collected. He paid only minimal amounts of money to “early” investors as a return on their investment and to encourage his victims to invest more of their money with him – a hallmark of a Ponzi scheme.

After an investigation and trial, on Binder pleaded guilty to one count of wire fraud on March 3, 2017. He also admitted that he assisted Del Carpio in keeping proceeds from the scheme out of the hands of potential creditors as well as lying to them about protecting their investments.

Have You Been a Victim of a Ponzi Scheme?

If you are the victim of a Ponzi scheme or have lost money in an investment scheme, you may have certain legal rights that require your immediate attention.

Call An Investment Attorney Today

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

FINRA Issues Supervision Fines to 4 Banks

FINRA Issues Supervision Fines to 4 Banks

dkradmin

FINRA Issues Supervision Fines to Top Financial Institutions

The Financial Industry Regulatory Authority (FINRA) has come to an agreement with four financial institutions including Deutsche Bank and JPMorgan to end claims related to failed supervision.

The four financial institutions, including Deutsche Bank Securities Inc., Citigroup, JPMorgan Chase and Institutional Brokers, LLC will collectively pay $4.75 million for violations of the Market Access Rule. FINRA claims the institutions failed to have adequate risk controls in place when letting customers access markets through their systems.

In each case, the institutions neither confirmed nor denied the charges but consented to the findings. Between May and July of this year, the institutions paid the following:

• Deutsche Bank was fined a total of $2.5 million.
• Citigroup was fined a total of $1 million.
• J.P. Morgan was fined a total of $800,000.
• Interactive Brokers was fined a total of $450,000.

The SEC Market Access Rule requires that broker-dealers that access an exchange or an alternative trading system or provide their customers with access to trading venues must properly control the financial and regulatory risks of providing such access.

In this case, the firms in question provided market access to numerous clients that executed millions of trades per day without adequate supervision.

Why Supervision is Important

The purpose of the Market Access Rule is to prevent financial institutions from risking their own financial condition and that of other participants in the market. The rule also helps to ensure the stability and integrity of the financial system and the securities markets.

Are You a Victim of Stockbroker Misrepresentation?

If you invested with the Chans or think you may be involved in a scam, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

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

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

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

Juno Drivers File Suit for Securities Fraud

Juno Drivers File Securities Fraud Suit

dkradmin

Three Juno drivers have filed a federal class action lawsuit against New York-based ride-hail service Juno. The drivers are filing for breach of contract, false advertising, and securities fraud.

Juno Drivers Misled by Equity Program

The Juno drivers allege the company lured away high-performing drivers from competing companies Uber and Lyft with the promise of equity in the company. In April, when Juno was acquired by New York-based Gett, the equity program was dissolved.

As part of the acquisition deal, drivers were informed that those who had Juno shares were to be cashed out. As reported by Recode, drivers were receiving on average around $100 – regardless of how many shares they held. One driver reportedly had more than 6,000 shares.

The suit filed alleges that Juno used the equity program to lure drivers to the company with intentions to sell the company when an offer came its way. In addition to the equity program, Juno paid drivers $50 to be on the platform, even before drivers were carrying riders. When the company launched, riders were given deep discounts and drivers were only charged 10 percent commission. The result was an unsustainable business model.

In response to the suit from the Juno drivers, the company states that it was considering changes to the equity program prior to the acquisition by Gett. Gett acquired Juno for $200 million, including the company’s assets and its founding team.

Have You Been a Victim of Securities Fraud?

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

Call a Securities Fraud Attorney Today

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

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

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

Valeant Tries to Clear Claims in 4 Securities Fraud Suits

Valeant Tries to Clear Claims in 4 Securities Fraud Suits

dkradmin

Valeant Pharmaceuticals International Inc. has asked a New Jersey federal court to waive four securities fraud suits brought against it by institutional investors. The investors – including companies T. Rowe Price Growth Stock Fund Inc. – are seeking to recover damages for Valeant securities they say were purchased under false filings with the U.S. Securities and Exchange Commission.

Valeant Tries to Wavie Divergent Parts of Class Action Suit

The investors filing suit have many of the same allegations about Valeant’s business practices and undisclosed ties to a mail-order pharmacy that have been raised in a securities class action lawsuit against Valeant. As a result, Valeant is seeking to waive parts of the four lawsuits that diverge from the class action. The complaint by Valeant accuses the so-called Section 18 claims as overly generalized since the investors did not link purchases to statements in the filings.

The suits filed last year by the institutional investors are claiming that Valeant operated a “secret network” of pharmacies, used to fraudulently push high-priced generic drugs on patients. To hide the deception, Valeant allegedly lied to regulators and investors.

Did You Invest with Valeant?

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

Call a Securities Fraud Attorney Today

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.

Hatzenbeller Sentenced in Securities Fraud Case

Hatzenbeller Sentenced in Securities Fraud Case

dkradmin

Ken Hatzenbeller has been convicted of securities fraud in a state lawsuit. Haztenbeller was charged with securities fraud in 2016 after investors in his Shoot the Moon restaurant group reported to the state that their investments had evaporated. The company had claimed bankruptcy in October 2016.

Hatzenbeller Pleads No Contest

Hatzenbeller pleaded no contest to one count of fraudulent securities practices, receiving a six-year deferred sentence. In late June, Hatzenbeller had signed a plea agreement with prosecutors from the Montana State Auditor’s agreeing to pay restitution totaling more than $1.7 million. The agreement also included probationary conditions for six years. In exchange for the plea, prosecutors agreed to drop four additional fraudulent securities-related charges, all felonies.

In the June plea deal, Hatzenbeller stated that he had the ability to pay the monetary obligations of the deal but since then, his monetary situation has changed.

In a parallel action, Haztenbeller was also sentenced on federal charges in late June. In that case, he agreed to pay back another $1 million to a Utah bank for spending a $500,000 loan on payroll rather than on restaurant fixtures.

Securities Fraud Case Coming to a Close

Hatzenbeller’s hearing was the last in a series of hearings since the bankruptcy filing of Shoot the Moon in October 2015. The restaurant group owned a dozen restaurants across Montana, Idaho, and Washington state.

As a result of misdealings on the part of Hatzenbeller, charges were brought against him in both state and federal court under criminal and civil cases. In another case he received a 30-month sentence in federal prison in Sheridan, Oregan. His lawyer has said Hatzenbeller will report to prison, as ordered, on July 25.

Did You Lose Money in an Investor Scam?

If you invested with the Chans or think you may be involved in a scam, you may have certain legal rights that require your immediate attention.

Call a Securities Fraud Attorney Today

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

With offices in Los Angeles, New York, West Palm Beach and Miami, our securities 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.

Auditors Face Lawsuit for Colonial BancGroup Failure

Auditors Face Lawsuit for Colonial BancGroup Failure

dkradmin

An Alabama federal judge has ruled that auditors PricewaterhouseCoopers LLP and Crowe Horwath LLP must face a $2.2 billion lawsuit. The lawsuit is brought by regulators who allege the auditors overlooked a mortgage fraud scheme that resulted in the failure of Colonial BancGroup Inc. The judge said the damages to the Federal Deposit Insurance Corp. (FDIC) are too complicated, so it would be impossible to impose interest against the auditors once the lawsuit goes to trial.

Auditors Lawsuit Brought by FDIC

The bankruptcy trustee for Colonial BancGroup and the FDIC claim that auditors from PricewaterhouseCoopers LLP and Crowe Horwath LLP failed to correct irregularities and fake collateral from its biggest customer, Taylor Bean & Whitaker Mortgage Group, causing losses for Colonial BancGroup and its subsidiary Colonial Bank.

The auditors claim they can’t be held liable for the losses but U.S. District Judge Barbara Jacobs Rothstein has rejected the claim, stating the case would go forward.

Colonial BancGroup Damages Vary

On both sides of the case, the estimates of the damages as a result of the bank failure vary widely. Judge Rothstein wrote that damages are “uncertain and difficult to ascertain” and the consequences could be in the hundreds of millions.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million for clients for 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.