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SEC Seeks $2.5M From Texas Attorney For Securities Fraud

Last year, the SEC charged a Texas attorney with defrauding investors with regard to two securities offerings, one pertaining to an oil and gas exploration venture and the other a fracking water filtration business deal. The case was filed in the U.S. District Court for the Northern District of Texas against attorney Gregory G. Jones and Aquaphex Total Water Solutions. The SEC recently filed a motion for summary judgment, stating in its brief that Jones should be ordered to pay a maximum civil penalty of $2,530,000, disgorgement of $985,000, and an additional disgorgement of $480,000 with prejudgment interest of $17,042.39. In its original complaint, the SEC alleged that in 2009 Jones represented a group of European investors who invested about $6 million in an entity called Edwards Exploration. Jones had an agreement with Edwards in which Edwards was to pay him for performing particular services, including providing due diligence with relation to the European investors' shares. The SEC claims Jones [...]

By |January 13th, 2016|Fraud, Press Releases & News, SEC|
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SEC Issues Report On Review Of “Accredited Investor” Definition

The SEC issued a report evaluating the definition of "accredited investor" as part of its obligations under the Dodd-Frank Act. Perhaps most significantly, the report recommends modifications to the definition that could drastically change capital fundraising and the ability for issuers to rely on exemptions from registering their securities offerings. Currently, accredited investors are defined as those natural persons whose income exceeds $200,000 individually or $300,000 jointly with their spouses for the two most recent years and who reasonably anticipate income to remain constant in the current year; those natural persons whose net worth exceeds $1 million, excluding the value of their primary residence; and certain entities with assets exceeding $5 million. Financial Threshold Recommendations The report suggests that the SEC consider one or more of the following recommendations as related to the required financial thresholds for individuals or entities to qualify for “accredited investor” status: Impose investment limitations on the current income and net worth thresholds, such as limiting investments [...]

By |January 12th, 2016|Press Releases & News, SEC|
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Biggest FINRA Penalties In 2015

The biggest penalties FINRA levied last came from a wide variety of violations: Puerto Rico The Puerto Rico bond crisis was the source of a couple substantial FINRA actions. The regulator fined UBS Financial Services Inc. of Puerto Rico $7.5 million and ordered restitution of $11 million to 165 customers who had bought Puerto Rican closed-end fund shares. In a similar action, the regulator made Santander Securities pay $4.3 million in restitution and levied a $2 million fine. Mutual Fund Charges Overcharging for mutual funds was at the center of numerous big FINRA cases. The regulator ordered Wells Fargo Advisors to pay $15 million in restitution to customers because it failed to waive mutual fund sales charges for charitable and retirement accounts. In similar actions, Edward D. Jones & Co. paid $13.5 million in restitution, while Raymond James Financial Services Inc., LPL Financial, Stifel Nicolaus & Company Inc. and Janney Montgomery Scott paid $8.7 million, $6.3 million, $2.9 million and $1.2 million, [...]

By |January 11th, 2016|FINRA, Press Releases & News|
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Massachusetts Regulator Charges Securities Firm With Unsuitable Sale To Elderly Client

William Galvin, secretary of the commonwealth of Massachusetts, has charged a securities firm operating at Citizens Bank locations with "dishonest and unethical conduct" for selling an elderly woman funds that were riskier than her stated investment tolerance. Galvin seeks restitution from Citizens Securities for the anonymous investor, who lost roughly $7,000 when she got out of the investment portfolio. Despite indicating a low tolerance for the risk, the investor was allegedly sold aggressive investment strategies, including alternative and emerging market funds, as well as funds that buy high-yield bonds. The Citizens Bank branch where she first met the financial consultant failed to adequately disclose the location's brokerage activities and did not identify who the consultant worked for, leaving the impression that he worked for the bank. "Banks that offer non-bank financial services have an obligation to make clear the distinction between the banking services and the other financial services provided at the same location," Galvin said. "This is particularly important [...]

By |January 8th, 2016|Press Releases & News|
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