SEC Names Thomas M. Piccone to Lead National Exam Program in Denver Office

The Securities and Exchange Commission today announced that it has named Thomas M. Piccone to lead the National Exam Program in the Denver Regional Office.

Mr. Piccone joined the SEC’s Denver office staff in 1997 and ascended to become the assistant director for the office’s examination program overseeing investment advisers and investment companies.  As associate regional director for examinations, he will now oversee examinations of broker-dealers and transfer agents as well as investment advisers and investment companies throughout an eight-state region.

“Tom has served investors and his SEC colleagues with total dedication and professionalism for the last 17 years,” said Andrew Bowden, director of the SEC’s ... Read More

SEC Charges Former CEO of ConvergEx Subsidiary in Scheme to Deceive Customers About Trading Fees

The Securities and Exchange Commission today charged the former chief executive officer of a broker-dealer subsidiary of ConvergEx Group LLC for deceiving brokerage customers with hidden fees to buy and sell securities. 

The SEC’s complaint alleges that the former CEO, Anthony G. Blumberg, engaged in a scheme that entailed concealing the practice of routing orders to an offshore affiliate in Bermuda to add mark-ups or mark-downs.  The hidden fees known as “trading profits” or “TP” were in addition to and often much higher than the commissions paid by customers to have their orders executed. 

The charges against Blumberg follow those announced in December by the SEC against Read More

SEC Charges Four Promoters with Manipulating Marijuana-Related Stocks and Other Microcap Companies

The Securities and Exchange Commission today charged four promoters with ties to the Pacific Northwest for manipulating the securities of several microcap companies, including marijuana-related stocks that the agency has warned investors about in recent weeks. The SEC alleges that the four promoters bought inexpensive shares of thinly traded penny stock companies on the open market and conducted pre-arranged, manipulative matched orders and wash trades to create the illusion of an active market in these stocks.  They then sold their shares in coordination with aggressive promotional campaigns that urged investors to buy the stocks because the prices were on the verge of rising substantially.  However, these companies had little to no business operations at the time. The promoters rea... Read More

SEC Announces Oil-and-Gas Fraud Charges Against Houston-Based Company and CEO

The Securities and Exchange Commission today announced charges against a Houston-based oil-and-gas exploration and production company and its CEO for making fraudulent claims about the company’s oil reserves.

An SEC enforcement investigation found that Houston American Energy Corp. and John F. Terwilliger fraudulently claimed that a Colombian exploration concession in which Houston American only owned a fractional interest held between 1 billion and 4 billion barrels of oil reserves, and that the reserves were worth more than $100 per share to Houston American’s investors.  The estimates lacked any reasonable basis and were falsely attributed to the concession’s operator, whose actual estimates were much lower. 

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SEC Obtains Nearly $70 Million Judgment Against Richmond, Va.-Based Firms and CEO Found Liable for Defrauding Investors

The Securities and Exchange Commission today announced that it has obtained a final judgment in federal court in Tennessee requiring a Richmond, Va.-based financial services holding company, a subsidiary brokerage firm, and their CEO to pay nearly $70 million as the outcome of a trial that found them liable for fraud.

The SEC’s complaint filed against AIC Inc., Community Bankers Securities LLC, and Nicholas D. Skaltsounis alleged that they conducted an offering fraud while selling AIC promissory notes and stock to numerous investors across multiple states, many of whom were elderly or unsophisticated brokerage customers.  They misrepresented and omitted material information about ... Read More

SEC Enforcement Division Modifies Municipalities Disclosure Initiative

The Securities and Exchange Commission today announced modifications to its Enforcement Division’s Municipalities Continuing Disclosure Cooperation (MCDC) Initiative that will provide greater opportunity for smaller municipal securities underwriter firms and municipal issuers to take advantage of the initiative. 

To allow issuers and obligors more time to complete their reporting requirements, the division has extended the deadline to self-report potential violations from September 10, 2014 to December 1, 2014.  The deadline for underwriters remains unchanged at September 10, 2014.  With respect to underwriters, the division has determined that to implement a tiered approach to civil penalties based on the size of the firm would encourage smaller under... Read More

SEC Charges Virginia-Based Broker With Stealing Funds From Elderly Customers

The Securities and Exchange Commission today charged a broker based in Roanoke, Va., with defrauding elderly customers, including some who are legally blind, by stealing their funds for her personal use and falsifying their account statements to cover up her fraud.

According to the SEC’s complaint filed in U.S. District Court for the Western District of Virginia, Donna Jessee Tucker siphoned $730,289 from elderly customers and used the money to pay for such personal expenses as vacations, vehicles, clothes, and a country club membership.  Tucker ensured that the customers received their monthly account statements electronically, knowing that they were unable or unwilling to access their statements in that format.  The SEC further alleges that Tucke... Read More

SEC Announces Award for Whistleblower Who Reported Fraud to SEC After Company Failed to Address Issue Internally

The Securities and Exchange Commission today announced an award of more than $400,000 for a whistleblower who reported a fraud to the SEC after the company failed to address the issue internally.

The SEC’s whistleblower program rewards high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million.  Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case.  By law, the SEC must protect the confidentiality of whistleblowers and cannot disclose any information that might directly or indirectly reveal a whistleblower’s identity.

This whistleblower provided the agency with specific, timely, and credible information that allowed for a more rapi... Read More

Architect of Variable Annuities Scheme Agrees to Pay $850,000, Admit Wrongdoing, and Be Barred From Securities Industry

The Securities and Exchange Commission today announced that the architect of a variable annuities scheme designed to profit from the imminent deaths of the terminally ill has agreed to settle charges brought against him earlier this year by paying more than $850,000, admitting wrongdoing, and being barred from the securities industry.

The SEC’s Enforcement Division previously charged Michael A. Horowitz and several others he recruited into his scheme to identify terminally ill patients in nursing homes and hospice care in southern California and Chicago.  Horowitz, a broker who lives in Los Angeles, sold variable annuities contracts with death benefit and bonus credit f... Read More

SEC Charges Company CEO and Former CFO With Hiding Internal Controls Deficiencies and Violating Sarbanes-Oxley Requirements

The Securities and Exchange Commission today announced charges against the CEO and former CFO of a Florida-based computer equipment company for misrepresenting to external auditors and the investing public the state of its internal controls over financial reporting.

The Sarbanes-Oxley Act of 2002 requires a management’s report on internal controls over financial reporting to be included in a company’s annual report.  The CEO and CFO must sign certifications confirming they’ve disclosed all significant deficiencies to the outside auditors, reviewed the annual report, and attest to its accuracy.

The SEC’s Enforcement Division alleges that CEO Marc Sherman and former CFO Edward L. Cummings represented in a management&rsq... Read More

SEC Names Alberto Arevalo as Associate Director in the Office of International Affairs

The Securities and Exchange Commission today announced that Alberto Arevalo has been named an associate director in the Office of International Affairs (OIA), where he will oversee international enforcement, supervisory cooperation, and technical assistance programs.

Mr. Arevalo has been chief of OIA’s international cooperation and technical assistance programs since 2012, and his work with regulators outside the U.S. has helped extend the reach of the SEC’s cross-border enforcement efforts and strengthened its ability to oversee globally active organizations.  He also was responsible for expanding the SEC’s training programs for foreign regulators, including training in anti-money laundering compliance.    

“Under Alberto&rs... Read More

SEC Announces Charges in “Solar Farm” Penny Stock Scheme

The Securities and Exchange Commission today announced fraud charges against a penny stock company and its CEO linked to a scam artist whom the agency separately charged earlier this month. The SEC alleges that MSGI Technology Solutions and its CEO J. Jeremy Barbera defrauded investors by touting a joint venture to develop and manage solar energy farms across the country on land purportedly owned by an electricity provider operated by Christopher Plummer.  Barbera and Plummer co-authored press releases falsely portraying MSGI as a successful renewable energy company on the brink of profitable solar energy projects.  However, MSGI had no operations, customers, or revenue at the time, and Plummer’s company did not actually possess any of the assets or financing needed to develop the pu... Read More