SEC Charges Allen Park, Mich. and Two Former City Leaders in Fraudulent Muni Bond Offering for Movie Studio Project
The Securities and Exchange Commission today announced fraud charges against the City of Allen Park, Mich., and two former city leaders in connection with a municipal bond offering to support a movie studio project within the city. An SEC investigation found that offering documents provided to investors during the Detroit suburb’s sale of $31 million in general obligation bonds contained false and misleading statements about the scope and viability of the movie studio project as well as Allen Park’s overall financial condition and its ability to service the bond debt. The city and the two officials – former mayor Gary…
Read MoreSEC Sanctions 10 Companies for Disclosure Failures Surrounding Financing Deals and Stock Dilution
The Securities and Exchange Commission today announced enforcement actions against 10 companies for failing to make the required disclosures about financing deals and other unregistered sales that diluted their stock. Companies are required to file a Form 8-K to inform investors when shares of common stock are sold in transactions that are not registered with the SEC under the federal securities laws and constitute at least five percent of the total stock held by their shareholders. Companies also must report when they’ve entered into a financing agreement not made in the ordinary course of business. These disclosures enable investors to…
Read MoreSEC Charges Two Canadian Citizens With Penny Stock Fraud Involving Tennessee Coal Mining Company
The Securities and Exchange Commission today charged a pair of Canadian citizens with conducting an international microcap fraud scheme by stockpiling shares in a coal mining company and funding a multi-million dollar promotional campaign to hype the stock while simultaneously dumping their shares and routing the proceeds through offshore accounts. The SEC alleges that after Bruce D. Strebinger facilitated a reverse merger between shell company Americas Energy Company-AECo and a private start-up company in Knoxville, Tenn., he and Brent Howard Chapman each acquired substantial positions of more than 5 percent of the common stock without publicly disclosing their beneficial ownership…
Read MoreSEC Sanctions 13 Firms for Improper Sales of Puerto Rico Junk Bonds
The Securities and Exchange Commission today sanctioned 13 firms for violating a rule primarily designed to protect retail investors in the municipal securities market. All municipal bond offerings include a “minimum denomination” that establishes the smallest amount of the bonds that a dealer firm is allowed to sell an investor in a single transaction. Municipal issuers often set high minimum denomination amounts for so-called “junk bonds” that have a higher default risk that may make the investments inappropriate for retail investors. Because retail investors tend to purchase securities in smaller amounts, this minimum denomination standard helps ensure that dealer firms…
Read MoreSEC Charges California-Based Bio-Rad Laboratories With FCPA Violations
The Securities and Exchange Commission today charged a clinical diagnostic and life science research company based in California with violating the Foreign Corrupt Practices Act (FCPA) when its subsidiaries made improper payments to foreign officials in Russia, Vietnam, and Thailand in order to win business. An SEC investigation found that Bio-Rad Laboratories lacked sufficient internal controls to prevent or detect approximately $7.5 million in bribes that were paid during a five-year period and improperly recorded in books and records as legitimate expenses like commissions, advertising, and training fees. The improper payments enabled Bio-Rad to earn $35 million in illicit profits.…
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