China-Based Company and CEO To Pay $55.6 Million for Inaccurate Disclosures
The Securities and Exchange Commission today announced a $55.6 million settlement with Focus Media Holding Limited and CEO Jason Jiang to resolve charges of inaccurate disclosures about the China-based advertising company’s partial sale of a subsidiary to insiders, including Jiang. The sale, which occurred before a third party purchased the subsidiary at a significantly higher price, yielded enormous profits to Jiang and other insiders. As part of the settlement, Jiang agreed to disgorge $9.69 million of allegedly ill-gotten gains plus prejudgment interest of $1.6 million, and pay a $9.69 million penalty. Focus Media agreed to pay a $34.6 million penalty…
Read MoreSEC Announces Enforcement Action for Illegal Offering of Security-Based Swaps
The Securities and Exchange Commission today announced an enforcement action against a company that illegally offered complex derivatives products to retail investors. The Dodd-Frank Act implemented two key requirements for any security-based swaps offering to a retail investor who doesn’t meet the high standard of an “eligible contract participant” defined in the law. A registration statement must be effective for the offering, and the contracts must be sold on a national securities exchange. These requirements are intended to make financial information and other significant details about the offering fully transparent to retail investors, and limit the transactions to platforms subject…
Read MoreSEC Charges Investment Adviser With Fraudulently Funneling Client Assets to Companies in Owner’s Interest
The Securities and Exchange Commission today announced fraud charges against a Massachusetts-based investment advisory firm and its owner for funneling more than $17 million in client assets into four financially troubled Canadian penny stock companies in which the owner has undisclosed business and financial interests. The SEC alleges that clients at Interinvest Corporation may have lost as much as $12 million of their $17 million investment based on the recent trading history of shares in the penny stock companies, some of which are purportedly in the business of exploring for gold or other minerals. Interinvest’s owner and president Hans Peter…
Read MoreSEC Announces Charges Against Retirement Plan Custodian in Connection With Ponzi Scheme
The Securities and Exchange Commission today announced charges against an Ohio-based self-directed IRA provider accused of ignoring red flags for accounts with investments that turned out to be fraudulent. The SEC Enforcement Division alleges that Equity Trust Company took an active role in marketing investments offered by Ephren Taylor, who targeted churchgoers while running a Ponzi scheme, and Randy Poulson, who has been indicted in federal district court for an alleged offering fraud targeting investors in New Jersey. The Enforcement Division alleges that Taylor and Poulson defrauded more than 100 investors out of $5 million invested through accounts at Equity…
Read MoreInvestment Advisory Firm’s Former President Charged With Stealing Client Funds
The Securities and Exchange Commission today announced fraud charges against a Washington D.C.-based investment advisory firm’s former president accused of stealing client funds. The firm and its chief compliance officer separately agreed to settle charges that they were responsible for compliance failures and other violations. SFX Financial Advisory Management Enterprises is wholly-owned by Live Nation Entertainment and specializes in providing advisory and financial management services to current and former professional athletes. The SEC Enforcement Division alleges that SFX’s former president Brian J. Ourand misused his discretionary authority and control over the accounts of several clients to steal approximately $670,000 over…
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