SEC Obtains Asset Freeze Against China-Based Trader for Suspicious Activity Last Week
The Securities and Exchange Commission today obtained an emergency court order to freeze the assets of a trader in China who profited by more than $1 million after trading in a U.S. brokerage account in advance of last week’s public announcement that China-based Qihoo 360 Technology Co. Ltd. had received a buyout offer at a significant premium from its CEO and a consortium of other affiliates. The SEC alleges that Haijian Luo of Guangzhou, China, made bets that Qihoo’s stock price would rise in the short term and purchased approximately $700,000 of out-of-the-money call options prior to the buyout announcement. …
Read MoreSEC Charges Unregistered Brokers in EB-5 Immigrant Investor Program
The Securities and Exchange Commission today charged two firms that illegally brokered more than $79 million of investments by foreigners seeking U.S. residency. The charges are the first against brokers handling investments in the government’s EB-5 Immigrant Investor Program and follow earlier SEC actions against fraudulent EB-5 offerings. Ireeco LLC, originally of Boca Raton, Fla., and its successor Ireeco Limited, a Hong Kong-based company operating in the U.S., were charged with acting as unregistered brokers for more than 150 EB-5 investors. The EB-5 program administered by the U.S. Citizenship and Immigration Services (USCIS) provides a path to legal residency for…
Read MoreSEC Charges Microcap Oil Company, CEO, and Stock Promoter With Defrauding Investors
The Securities and Exchange Commission today charged a Texas-based oil company and its CEO with defrauding investors about reserve estimates and drilling plans, and charged the author of a stock-picking newsletter for his role in a fraudulent promotional campaign encouraging readers to buy the oil company’s penny stock shares. The SEC alleges that shortly after becoming Norstra Energy’s CEO in March 2013, Glen Landry began making false and misleading claims about business prospects on Norstra’s website as well as in press releases and SEC filings. Landry and Norstra Energy misled investors about the location of the company’s property in order…
Read MoreSEC Charges 36 Firms for Fraudulent Municipal Bond Offerings
The Securities and Exchange Commission today announced enforcement actions against 36 municipal underwriting firms for violations in municipal bond offerings. The cases are the first brought against underwriters under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, a voluntary self-reporting program targeting material misstatements and omissions in municipal bond offering documents. The Enforcement Division initiative announced in March 2014, offered favorable settlement terms to municipal bond underwriters and issuers who self-reported securities law violations. The first issuer charged under the initiative settled with the SEC in July 2014. “The MCDC initiative has already resulted in significant improvements to the municipal securities…
Read MoreSEC Charges Investment Adviser and Mutual Fund Board Members With Failures in Advisory Contract Approval Process
The Securities and Exchange Commission today charged a mutual fund adviser, its principal, and three mutual fund board members with failing to satisfy their statutory obligations in connection with the evaluation and approval of mutual fund advisory contracts. Richmond, Va.-based advisory firm Commonwealth Capital Management was charged with violating Section 15(c) of the Investment Company Act of 1940 for providing incomplete or inaccurate information to two mutual fund boards, and the firm’s majority owner John Pasco III was charged with causing the violations. They and former trustees J. Gordon McKinley III, Robert R. Burke, and Franklin A. Trice III have…
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