Source: https://www.compliance.ai/enforcement-report/may-09-2020/
Timestamp: 2020-06-03 15:01:49
Document Index: 114448814

Matched Legal Cases: ['art 4', '§ 1681', 'art 310', '§ 5531', 'in Fine', '§ 1', '§ 77', '§ 78', '§ 240', '§ 78', '§ 240', 'art 4', 'art 4', 'art 4']

Financial Enforcement Actions | Week of May 09 to May 15 - Compliance.ai
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Financial Enforcement Actions | Week of May 09 to May 15
May 20, 2020 christian thaure
Respondent: Dale Woodward
Violation: Mr Woodward has failed to respond adequatelyto the Authority's repeated requests for him to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that he is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More
Respondent: Carl Anthony Monks
Violation: Mr Monks has failed to respond adequately to the Authority's repeated requests for him to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that he is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More
Respondent: Cesco Investments Ltd
Violation: CIL’s Part 4A permission was varied by removing all regulated activities with immediate effect, on the basis that CIL is failing to satisfy the Threshold Conditions. Specifically, CIL does not meet the requirements of the appropriate resources and suitability Threshold Condition... Read More
Respondent: American Family Connect Property and Casualty Insurance Company, fka IDS Property Casualty Insurance Company, dba Ameriprise Auto & Home Insurance
Violation: The Department reviewed IDS’s Arizona Billing and Cancellation Procedures Manual for homeowner, tenant and condominium (“homeowner”) policies and found that IDS backdated the cancellation effective date to the policy expiration date in cases of nonpayment after an offer to renew and to the premium due date on mid-term cancellations for nonpayment of premium despite policy provisions that stated IDS would provide the insured with at least 10 days’ notice before the date cancellation takes effect. The Department reviewed sample copies of IDS homeowner forms for notice of pending cancellation for non-payment of premium and found that the IDS forms failed to allow for timely payment of premiums postmarked by the due date. IDS submitted revised notices to the Department which were effective on February 9, 2019... Read More
Respondent: Position Gurus, LLC
Violation: Defendants have violated the FTC Act, the Telemarketing Sales Rule, and the CRFA by, among other things: (1) making unsubstantiated and false earnings and product claims; (2) making false claims about their business affiliations and need for consumers’ personal financial information; and (3) using form contract provisions that restrict individual consumers’ ability to review or complain about Defendants’ products, services, or conduct. The FTC seeks equitable relief to put a stop to this scheme and hold Defendants liable for millions of dollars of consumer harm they have caused... Read More
Respondent: Chou Team Realty, LLC, et al.
Violation: The Bureau of Consumer Financial Protection (Bureau) commenced this civil action on January 9, 2020, to obtain injunctive relief, redress, damages, civil penalties, and disgorgement. The Complaint alleges that, in connection with providing Debt-Relief Services to consumers with student loans, certain entities and individuals violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681; the Telemarketing Sales Rule (TSR), 16 C.F.R. Part 310; and the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531(a), 5536(a)(1)(A)... Read More
Penalties: $775,000.00
Respondent: Specialized Loan Servicing, LLC
Violation: On May 11 2020, the Consumer Financial Protection Bureau (Bureau) issued a consent order against Specialized Loan Servicing, LLC (SLS), a mortgage-loan servicer in Colorado. As of February 29, 2020, SLS serviced a portfolio of mortgage loans worth about $112.69 billion. The Bureau’s investigation found that since January 2014, SLS violated the Real Estate Settlement Procedures Act (RESPA), its implementing regulation, Regulation X, and the Consumer Financial Protection Act of 2010 (CFPA) by taking prohibited foreclosure actions against mortgage borrowers who were entitled to protection from foreclosure, and by failing to send or to timely send evaluation notices to mortgage borrowers who were entitled to them. In some cases, SLS obtained foreclosure judgments and conducted foreclosure sales on borrowers’ homes when Regulation X would have entitled the borrowers to protection from foreclosure had SLS complied with that rule... Read More
$6,290,067.00 in Fines
Respondent: Diane Kaylor
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Diane Kaylor (“Kaylor” or “Respondent”)... Read More
Penalties: $6,000,067.00
Respondent: Equinox Fund Management, LLC
Violation: Pursuant to the Order, the Respondent is to provide a final accounting to the Commission staff for submission to the Commission for approval. Upon approval of the final accounting, all 2 remaining amounts in the Disgorgement Fund, and any funds returned in the future, are to be sent to the U.S. Treasury. The final accounting has been submitted to the Commission for approval as required by the Order, and has been approved. The Disgorgement Fund is terminated... Read More
Respondent: Justin N. Deckert
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Justin N. Deckert (“Respondent”)... Read More
Respondent: Mergenet Medical, Inc., Bruce Matthew Sher, Shara Anne Hernandez, and Peter Anthony DeCicco, Jr.
Violation: By order dated February 22, 2019, the Commission issued the “Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that Establish Distribution Funds” (“Omnibus Order”),1 authorizing the Secretary to issue orders for calendar years 2019-2021 appointing, upon request by the Commission staff, Miller Kaplan Arase LLP (“Miller Kaplan”), a certified public accounting firm, with one of their offices located in San Fransciso, California, as tax administrator (“Tax Administrator”) in administrative proceedings where the distribution fund may incur tax-related obligations as a Qualified Settlement Fund (“QSF”) under the Department of the Treasury Regulation § 1.468B-1(c)... Read More
Respondent: Ambassador Advisors, LLC, Bernard I. Bostwick, Robert E. Kauffman, and Adrian E. Young
Violation: The SEC's complaint alleges that, from August 2014 to December 2018, Ambassador, Bostwick, Kauffman, and Young, failed to adequately disclose conflicts of interest arising from their selection of mutual fund share classes that charged 12b-1 fees, which Bostwick, Kauffman, and Young received, instead of lower-cost share classes of the same funds that were available to clients and that would not have paid 12b-1 fee compensation to Bostwick, Kauffman, and Young. In addition, the complaint alleges that Ambassador, Bostwick, Kauffman, and Young breached their duty to seek best execution for their clients by causing certain advisory clients to invest in fund share classes that charged 12b-1 fees when share classes of the same funds that presented a more favorable value for these clients under the particular circumstances in place at the time of the transactions were available to the clients. According to the complaint, Ambassador also failed to adopt and implement written policies and procedures designed to prevent these violations. Ambassador was eligible to self-report to the SEC pursuant to the Division of Enforcement's Share Class Selection Disclosure Initiative, but did not do so... Read More
Respondent: Morgan Stanley Smith Barney LLC,
Violation: As a result of the conduct described above, MSSB willfully1 violated Section 206(2) of the Advisers Act, which prohibits an investment adviser from engaging in any transaction, practice or course of business that operates as a fraud or deceit upon a client or prospective client. Scienter is not required to establish a violation of Section 206(2), but rather a violation may rest on a finding of negligence. SEC v. Steadman, 967 F.2d 636, 643 n.5 (D.C. Cir. 1992) (citing SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 194-95 (1963)). As a result of the conduct described above, MSSB willfully violated Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, which require, among other things, that a registered investment adviser adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder by the adviser and its supervised persons. MSS... Read More
Respondent: Ronald D. Swanson
Violation: The SEC's complaint, filed in U.S. District Court in the District of Connecticut, charges Swanson with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction, penalties, disgorgement of ill-gotten gains plus interest, and a bar from serving as an officer of director of a public company. On May 14, 2020, the SEC ordered that Swanson be forthwith suspended from appearing or practicing before the Commission pursuant to Rule 102(e)(2) of the Commission's Rules of Practice, based on his disbarment from the District of Columbia bar... Read More
Violation: Defendants also violated their fiduciary duty by failing adequately to disclose to their clients the conflict of interest inherent in these transactions. Specifically, Defendants did not disclose that, even though share classes of mutual funds without 12b-1 fees were available to their advisory clients, Defendants would select share classes of the same mutual funds with ongoing 12b-1 fees, lowering clients’ returns and generating additional revenue for Bostwick, Kauffman, and Young. 5. By failing to seek best execution of the mutual fund trades and failing to disclose their conflicts of interest, Bostwick, Kauffman, and Young enriched themselves at the expense of their clients and without their clients’ knowledge. In addition, Ambassador Advisors failed to adopt and implement written policies and procedures reasonably designed to make mutual fund share class recommendations in clients’ best interests and to disclose Defendants’ conflicts of interest in connection with mutual fund share class selection... Read More
Respondent: Applied BioSciences Corp.
Violation: According to the SEC's complaint, filed in federal court in the Southern District of New York, Applied BioSciences issued a press release on March 31 stating that it had begun offering and shipping supposed finger-prick COVID-19 tests to the general public that could be used for "Homes, Schools, Hospitals, Law Enforcement, Military, Public Servants or anyone wanting immediate and private results." The complaint alleges that contrary to these claims, the tests were not intended for home use by the general public and could be administered only in consultation with a medical professional. The complaint further alleges that Applied BioSciences had not shipped any COVID-19 tests as of March 31, and its press release failed to disclose that the tests were not authorized by the U.S. Food and Drug Administration... Read More
Respondent: Clinton Maurice Tucker II
Violation: "Defendant violated and, unless enjoined, will continue to violate Sections 15(a)(1) of the Exchange Act [15 U.S.C. Defendant violated and, unless enjoined, will continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. Defendant violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5]."... Read More
Respondent: Neil Burkhol, Frank Bianco, Palm Financial Management LLC and Shore Management Systems, LLC
Violation: "By engaging in the foregoing misconduct, Defendants violated, and unless enjoined will continue to violate, Section 10(b) of the Exchange Act (15 U.S.C. j 78j(b)1 and Rule 10b-5(a) and (c) (I7C.F.R. j 240.10b-5(a), (c)) thereunder. By engaging in the foregoing misconduct, Defendants violated, and unless enjoined will continue to violate, Section 10(b) of the Exchange Act (15 U.S.C. j 78j(b)j and Rule 10b-5(b) (I7C.F.R. j 240.10b-5(b)1 thereunder. Relief Defendants received investor funds and assets that were the proceeds, or are traceable to the proceeds, of Defendants' unlawful activities, as alleged in paramaphs 1 through 82 above, and Relief Defendants have no legitimate claims to those proceeds and gave no consideration for exchange of those funds"... Read More
Respondent: Turbo Global Partners , Inc., and Robert W. Singerman
Violation: Defendants TRBO and Singerman knowingly, intentionally, and/or recklessly engaged in the aforementioned devices, schemes and artifices to defraud, made untrue statements of material facts and omitted to state material facts, and engaged in fraudulent acts, practices and courses of business. In engaging in such conduct, the defendants acted with scienter, that is, with an intent to deceive, manipulate or defraud or with a severely reckless disregard for the truth. By reason of the foregoing, Defendants TRBO and Singerman, directly and indirectly, have violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]... Read More
Respondent: TCA Fund Management Group Corp. and TCA Global Credit Fund GP, Ltd.
Violation: The SEC's complaint, filed in the U.S. District Court for the Southern District of Florida, charges TCA and TCA-GP with violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint separately charges TCA with violating the anti-fraud provisions of Sections 206(1), 206(2), 206(4), and 207 of the Investment Advisers Act of 1940 and Rules 206(4)-7 and 206(4)-8 thereunder. The SEC seeks permanent injunctions, disgorgement of allegedly ill-gotten gains and prejudgment interest, financial penalties, and the appointment of a receiver over TCA, TCA-GP, and the funds TCA managed... Read More
Respondent: Stacy L. Beane
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Stacy L. Beane1 (“Respondent” or “Beane”)... Read More
Respondent: Sergey Pustelnik a/k/a Serge Pustelnik
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Sergey Pustelnik a/k/a Serge Pustelnik (“Respondent” or “Pustelnik”)... Read More
Violation: Mr Monks has failed to comply with the regulatory requirement to submit the Return. Mr Monks has not been open and co-operative in all his dealings with the Authority, in that Mr Monks has failed to respond adequately to the Authority's repeated requests for him to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that he is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More
Respondent: Turbo Global Partners, Inc. and Robert W. Singerman
Violation: Turbo Global had no agreement to sell the product, there was no partnership involving any government entities, and the CEO of Turbo Global's supposed corporate partner did not make or authorize the statements attributed to him. According to the complaint, Singerman drafted the releases, which he knew to be false. The SEC charged Singerman with fraud in 1999 based on his fraudulent sale of securities through a network of boiler rooms, and obtained a permanent injunction against him... Read More
Respondent: Travis Laska
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Travis Laska (“Respondent” or “Laska”)... Read More
Violation: The complaint alleges that Tucker would determine the amount of shares that the prospective investors wanted to purchase and the prices at which they would buy. Tucker allegedly then relayed that information to the selling shareholders, who entered sell orders at the coordinated prices and volumes, making it highly likely that their sell orders and the solicited investors' buy orders would match. Through this alleged matched trading, the selling shareholders were able to offload their shares into a market that Tucker had helped create. In addition to working as a sales agent in the matched-trading scheme, Tucker allegedly pitched fictitious investment opportunities to particularly vulnerable investors whom he identified while working in the boiler rooms. Instead of investing the funds he obtained from these investors as he had represented he would, Tucker allegedly spent the funds on personal expenses... Read More
Respondent: Wallace Byers
Violation: The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Wallace Byers (“Respondent”)... Read More
Violation: Mr Woodward has failed to comply with the regulatory requirement to submit the Return. Mr Woodward has not been open and co-operative in all his dealings with the Authority, in that Mr Woodward has failed to respond adequately to the Authority's repeated requests for him to submit the Return, and has thereby failed to comply with Principle 11 of the Authority's Principles for Businesses and to satisfy the Authority that he is ready, willing and organised to comply with the requirements and standards under the regulatory system... Read More
Violation: By a First Supervisory Notice dated 5 November 2019, CIL’s Part 4A permission was varied by removing all regulated activities with immediate effect, on the basis that CIL is failing to satisfy the Threshold Conditions. Specifically, CIL does not meet the requirements of the appropriate resources and suitability Threshold Condition. Section 55J(8) of the Act provides that, if as a result of a variation of a Part 4A permission under section 55J, there are no longer any regulated activities for which the authorised person concerned has permission, the Authority must, once it is satisfied that it is no longer necessary to keep the permission in force, cancel it.The Authority has concluded that it is so satisfied and accordingly has a duty to cancel CIL’s Part 4A permission... Read More