Legal Matters

The Securities and Exchange Commission (SEC) has taken decisive action against Caz L. Craffy, a former U.S. Army financial counselor, for allegedly defrauding Gold Star family members and others. The charges stem from unauthorized trading and inappropriate investment advice. According to the SEC's complaint, Craffy, who was based in Colts Neck, New Jersey, had the authority to provide general financial education to families of service members in his capacity as a U.S. Army financial counselor. However, between May 2018 and November 2022, he allegedly abused his position and took advantage of grieving family members by advising them to transfer their benefits, including life insurance and survivor benefits, into brokerage accounts managed outside of his official duties with the U.S. Army. Once the funds were transferred, Craffy engaged in unauthorized trading and recommended investment strategies that were not suitable for his clients' risk profiles and objectives. This exposed them to higher risks, such as excessive trading, lack of diversification, and concentrated [...]

The Securities and Exchange Commission (SEC) has taken legal action against Olivier Amar, former Chief Growth Officer of Frank, in connection with fraud related to the company's $175 million sale to JPMorgan Chase Bank, N.A. in 2021. This follows previous charges filed against Charlie Javice, Frank's founder and former CEO, for his involvement in the same fraudulent scheme. The alleged deception involved misrepresenting the availability of valuable data on 4.25 million students who used Frank's service, when in reality, the number was much lower, at less than 300,000. According to the SEC's revised complaint, Amar instructed a Frank engineering employee to create an artificial or "synthetic" dataset to supplement the actual data obtained from website visitors. The purpose of this was to meet JPMorgan Chase's due diligence request regarding Frank's user data before the acquisition. When the engineering employee refused to generate fictitious data, Javice and Amar allegedly collaborated to obtain data from external sources. Javice purportedly paid a data [...]

The Securities and Exchange Commission (SEC) has brought charges against Merrill Lynch, Pierce, Fenner & Smith Incorporated, and its parent company BAC North America Holding Co. (BACNAH) due to their failure to file multiple Suspicious Activity Reports (SARs) between 2009 and late 2019. As part of the settlement, Merrill Lynch has agreed to pay a $6 million penalty to the SEC. Furthermore, in a related action, Merrill Lynch will pay an additional $6 million fine to resolve charges brought by the Financial Industry Regulatory Authority (FINRA). According to the SEC's findings, BACNAH was responsible for devising and implementing Merrill Lynch's SAR policies and was tasked with filing the SARs on behalf of Merrill Lynch. However, over a ten-year period, BACNAH erroneously used a $25,000 threshold instead of the mandatory $5,000 threshold for reporting suspicious transactions or attempted transactions related to potential criminal activity through Merrill Lynch that could not be identified. This oversight led to Merrill Lynch's failure to submit [...]