SEC Charges “Frack Master” With Running an $80 Million Oil and Gas Fraud
The Securities and Exchange Commission today charged four companies and eight individuals in an $80 million oil and gas fraud orchestrated by a Dallas man who calls himself the “Frack Master” for his purported expertise in hydraulic fracturing. The SEC charged Chris Faulkner – the CEO of Breitling Energy Corporation (BECC) and recurring guest on CNBC, CNN International, Fox Business News, and the BBC to discuss oil-and-gas topics – with disseminating false and misleading offering materials, misappropriating millions of dollars of investor funds and attempting to manipulate BECC’s stock. The SEC also charged BECC and suspended trading in BECC’s securities…
Read MoreMerrill Lynch Paying $10 Million Penalty for Misleading Investors in Structured Notes
The Securities and Exchange Commission today announced that Merrill Lynch has agreed to pay a $10 million penalty to settle charges that it was responsible for misleading statements in offering materials provided to retail investors for structured notes linked to a proprietary volatility index. According to the SEC’s order instituting a settled administrative proceeding, the offering materials emphasized that the notes were subject to a 2 percent sales commission and 0.75 percent annual fee. Due to the impact of these costs over the five-year term of the notes, the volatility index would need to increase by 5.93 percent from its…
Read MoreMerrill Lynch to Pay $415 Million for Misusing Customer Cash and Putting Customer Securities at Risk
The Securities and Exchange Commission today announced that Merrill Lynch has agreed to pay $415 million and admit wrongdoing to settle charges that it misused customer cash to generate profits for the firm and failed to safeguard customer securities from the claims of its creditors. An SEC investigation found that Merrill Lynch violated the SEC’s Customer Protection Rule by misusing customer cash that rightfully should have been deposited in a reserve account. Merrill Lynch engaged in complex options trades that lacked economic substance and artificially reduced the required deposit of customer cash in the reserve account. The maneuver freed up…
Read MoreSEC Sues UK-Based Trader for Account Intrusion Scheme
The Securities and Exchange Commission today announced it has obtained an emergency court order to freeze the assets of a United Kingdom resident charged with intruding into the online brokerage accounts of U.S. investors to make unauthorized stock trades that allowed him to profit on trades in his own account. In a complaint filed in U.S. District Court in the Southern District of New York, the SEC alleges that in April and May, Idris Dayo Mustapha hacked into numerous accounts of U.S. customers of broker-dealers in and outside the U.S. The complaint alleges that Mustapha placed stock trades without the…
Read MoreSEC Charges Medical Device Manufacturer With FCPA Violations
The Securities and Exchange Commission today announced that Massachusetts-based medical device manufacturer Analogic Corp. and its wholly-owned Danish subsidiary have agreed to pay nearly $15 million to settle parallel civil and criminal actions involving Foreign Corrupt Practices Act (FCPA) violations. An SEC investigation found that Analogic’s Danish subsidiary, BK Medical ApS, engaged in hundreds of sham transactions with distributors that funneled about $20 million to third parties, including individuals in Russia and apparent shell companies in Belize, the British Virgin Islands, Cyprus, and Seychelles. Analogic agreed to pay $7.67 million in disgorgement and $3.8 million in prejudgment interest…
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