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MintBroker Charged With Illegally Conducting Business in U.S.

April 7, 2021
The Securities and Exchange Commission recently charged a Bahamian brokerage firm, MintBroker International Ltd., f/k/a Swiss America Securities, Ltd. and d/b/a as SureTrader, with illegally conducting business as broker-dealer in the U.S. without being registered. The SEC also charged Guy Gentile, SureTrader's founder, owner, and CEO, with control-person violations. The SEC alleges that from March 2016 through November 2019, SureTrader operated an offshore brokerage firm that touted its ability to assist U.S. day traders to avoid pattern day-trading regulations
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unsuitable options strategies

We're Investigating Claims Related to Morgan Stanley Rep Barry Speyer

March 11, 2021
Morgan & Morgan’s securities attorneys are investigating investor claims relating to Morgan Stanley and its registered representative, Barry Martin Speyer. Speyer works in Morgan Stanley’s Beverly Hills office. He may have engaged in unsuitable options strategies that resulted in substantial investment losses.  According to FINRA’s BrokerCheck, Speyer previously has been the subject of multiple customer complaints, some of which resulted in monetary settlements and arbitration awards.  More recently, Speyer may have improperly used short leaps and other short options strategies that
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investment advisor fraud

Unregistered Investment Advisor Defrauded Investors for 10 Years, SEC Says

March 10, 2021
The Securities and Exchange Commission recently charged George Heckler, of Charleston, South Carolina, for conducting an alleged fraud via two private hedge funds, Cassatt Short Term Trading Fund LP and CV Special Opportunity Fund LP.  The SEC alleges that Heckler formed the two hedge funds to hide huge losses incurred by another fund that Heckler operated, Conestoga Holdings LP. According to the SEC's complaint, Heckler allegedly carried out the scheme over a ten-year period. The SEC alleges that Heckler moved Conestoga's poorly performing assets to Cassatt and CV Special, and then
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Two Former KPMG Auditors Suspended by SEC for Improper Professional Conduct

March 4, 2021
The Securities and Exchange Commission recently suspended two ex-KPMG auditors from practicing before the SEC.  The suspension stems from settled charges against them for misconduct when auditing the not-for-profit College of New Rochelle, which has since closed its doors. The SEC previously charged the college’s controller with fraud relating to the college’s financial statements for 2015. As described in the SEC’s orders, former KPMG partner Christopher Stanley and former KPMG senior manager Jennifer Stewart approved or authorized an audit opinion on the college’s 2015 financial
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investment ratings

SEC Charges Morningstar Credit Ratings for Violating Federal Securities Laws

February 26, 2021
The Securities and Exchange Commission recently brought a civil action claiming that Morningstar Credit Ratings LLC breached federal securities laws when rating commercial mortgage-backed securities (CMBS) by failing to make certain disclosures and maintain adequate internal controls. Market participants use credit ratings as part of their analysis when making investment decisions. Federal securities laws require credit rating agencies to accurately describe their procedures and methodologies employed to determine credit ratings. Under federal securities laws
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million dollar ponzi scheme

GPB Capital Misled Investors In a $1.7 billion Ponzi Scheme

February 17, 2021
The Securities and Exchange Commission recently charged several defendants with operating a $1.7 billion Ponzi scheme. The scheme allegedly raised funds from securities issued by GPB Capital, a registered investment advisor based in New York. The SEC also charged GPB Capital for whistleblower law violations. According to the SEC, David Gentile (GPB Capital’s owner and CEO) and Jeffry Schneider (the owner of Ascendant Capital, the placement agent for GPB Capital) misled investors about the monetary source used to pay an 8% annualized distribution payment to investors. The SEC alleges that
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Gary Gensler Nominated to SEC Chairman Position

January 29, 2021
Present Biden has nominated Gary Gensler to serve as Chairman of the SEC. Gensler is the former chair of the CFTC, and is seen by many as unafraid to impose tough rules on Wall Street. Investor advocates are optimistic that Gensler will protect investors in stocks, bonds, and mutual funds by strengthening regulations. Barbara Roper, director of investor protection at the Consumer Federation of America, stated: “He knows the markets as well as anyone on Wall Street. He cares about investor protection, he knows how to write and pass regulations that can stand the test of time, and he's not
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mutual fund

Transamerica Financial Advisors to Pay Customers for Failure To Supervise Its Stockbrokers’ Recommendations

January 21, 2021
FINRA recently announced that Transamerica Financial Advisors, Inc. (TFA) has agreed to pay $4.4 million in restitution to over 2,000 customers for failing to supervise its stockbrokers’ recommendations of variable annuities, mutual funds, and 529 plans. TFA also will pay a $4.4 million fine. According to FINRA, from May 2010 to May 2016, TFA did not properly supervise its registered representatives’ recommendations to buy variable annuities. FINRA found that TFA’s commissions from variable annuities sales during this six-year period comprised more than 40 percent of the firm’s total
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British Firm Charged for Acting as Unregistered Broker-Dealer in U.S.

January 4, 2021
The Securities and Exchange Commission recently charged a British financial services firm, Global Investment Strategy UK Ltd. (GIS), with registration violations, alleging that GIS illegally cleared and settled billions of dollars of U.S. securities transactions without registering as a broker-dealer in the U.S. The SEC also charged GIS’s founder and principal, John William Gunn, with aiding and abetting the violations. According to the SEC's complaint, GIS provided clearance and settlement services from 2015 through 2019 to hundreds of U.S. customers involving billions of dollars' worth of
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fake accounts

Wells Fargo Misled Investors With Fake Accounts

December 15, 2020
The Securities and Exchange Commission recently charged John Stumpf (former Wells Fargo & Co. CEO and chairman) and Carrie Tolstedt (former head of Wells Fargo’s Community Bank) for allegedly misleading investors about Wells Fargo’s core banking business by including fake accounts in assessing the bank’s success. The SEC alleged that from 2014 to 2016, Tolstedt publicly endorsed Wells Fargo’s “cross-sell metric” as a way to measure Wells Fargo’s financial success, even though unauthorized and unused (i.e., fake) accounts artificially inflated the metric. In the
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Microcap Pump and Dump Scheme Targeted Elderly Investors

December 8, 2020
The Securities and Exchange Commission recently obtained a final consent judgment against Garrett O'Rourke, a Florida resident, for running a multi-million dollar pump-and-dump scheme targeting elderly investors. O’Rourke will be required to disgorge over $5.7 million, plus prejudgment interest. The SEC alleged that O'Rourke partnered with Maryland resident Michael Black to fraudulently sell stocks of several microcap companies to retail investors, including many elderly investors. The SEC accused O’Rourke and Black of using high-pressure sales tactics, including
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