Hamilton & Associates Law Group, P.A.
Securities Lawyers | Corporate Finance
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The U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of Medicus Homecare Inc. (MDCR) commencing at 9:30 a.m. EDT on July 28, 2017 and terminating at 11:59 p.m. EDT on August 10, 2017.
The Commission temporarily suspended trading in the securities of Medicus Homecare due to a lack of current and accurate information about the company because it has not filed certain periodic reports with the Commission. Read More
On July 28, 2017, the U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of CNK Global, Inc. (a/k/a American Life Holding Co., Inc.) (ALFE) commencing at 9:30 a.m. EDT on July 28, 2017, and terminating at 11:59 p.m. EDT on August 10, 2017.
The Commission temporarily suspended trading in the securities of the CNK Global due to a lack of current and accurate information about the company because it has not filed certain periodic reports with the Commission. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act). Read More
On July 26, 2017, the Securities and Exchange Commission (“SEC”) announced fraud charges against Joey Dodson, the founder of a collection of businesses known as Citadel Energy, which provided fluid management solutions to the oil and gas industry in North Dakota.
According to the SEC’s complaint, from approximately November 2012 through December 2014, Joey Dodson, of Porter Ranch, California, made numerous material misstatements and statements that were materially misleading as a result of omissions to investors. As described in the complaint, Joey Dodson misled investors regarding, among other things, his compensation arrangements, the intended use of investor proceeds, the status of an important land lease agreement, the ownership of certain assets or income streams, and prior litigation against himself. The SEC alleges that, most significantly, Dodson commingled funds among three ventures funded by separate investor groups and then misappropriated at least $1.7 million from investors for his personal benefit, including for large cash payments to himself and his family members, Ponzi-like payments to prior investors in unrelated projects, casino vacations, lease payments for a BMW automobile, and psychic readings and spiritual products. As a result of Dodson’s alleged misconduct, approximately 50 investors suffered substantial, and in some cases total, losses. Read More
On July 25, 2017, the Securities and Exchange Commission (“SEC”) announced an award of nearly $2.5 million to an employee of a domestic government agency whose whistleblower tip helped launch an SEC investigation and whose continued assistance enabled the SEC to address a company’s misconduct.
”Whistleblowers can provide a wealth of information and ongoing assistance that helps our agency bring enforcement actions quicker and more efficiently,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. ”This whistleblower not only helped us open the case, but also provided timely ongoing assistance along with critical documents and testimony that accelerated the pace of our enforcement action.”
On June 12, 2017, the Securities and Exchange Commission (“SEC”) announced that it has obtained a final judgment against Ascenergy LLC, Joseph Gabaldon, and Alanah Energy, LLC.
The SEC’s complaint alleges that, since at least 2014, Ascenergy and Gabaldon engaged in a deceptive scheme on crowdfunding websites and the company’s website to solicit investors to purchase overriding royalty interests in five initial, undeveloped oil and gas wells. According to the complaint, Ascenergy raised approximately $5 million from approximately 90 investors worldwide. The complaint alleges that Ascenergy and Gabaldon made multiple, material misrepresentations about the company, the nature of the offering, and the use of investor funds. The SEC also alleges that Alanah and Pyckl LLC – both of whom have been charged as relief defendants – have received, possessed, or benefited from investor funds. Read More
On July 21, 2017, the Securities and Exchange Commission (“SEC”) announced that it has filed a subpoena enforcement action against Andrew Coldicutt and the Law Offices of Andrew Coldicutt.
According to the SEC’s application and supporting papers, filed on July 20, 2017 in the U.S. District Court for the Central District of California, the SEC is investigating, among other things, whether Coldicutt, or others associated with Green Cures & Botanical Distribution, Inc., which is quoted on OTC Link under the ticker symbol “GRCU,” may have engaged in antifraud violations. The SEC’s court filings also state that Coldicutt and others may have prepared and filed documents, including quarterly and annual reports and attorney letters, which contain false and misleading public statements about GRCU’s management and the existence and identity of control persons. Read More
On June 7, 2017, the Securities and Exchange Commission (“SEC”) announced fraud charges against Michael Trahan for insider trading in the securities of The Shaw Group, Inc. (Shaw), a Louisiana-based energy construction company, ahead of a public announcement that Shaw was going to be acquired by Chicago Bridge & Iron Company N.V. (CBI).
The SEC’s complaint, filed in the U.S. District Court for the Western District of Louisiana, alleges that during July 2012, while Michael Trahan was a consultant to Shaw, a Shaw employee told Trahan about the impending Shaw merger. The SEC also alleges that Trahan’s company, Petra Consultants, Inc., was bound by an agreement with Shaw that required Petra and Michael Trahan to keep information received from Shaw confidential and not to use such information for any purpose except in the context of the consulting arrangement. The SEC further alleges that the same day the Shaw employee told Trahan about the impending merger, Michael Trahan bought 5,600 shares of Shaw common stock. The SEC alleges that this purchase represented approximately 86% of the cash in Trahan’s account and approximately 73% of the total account value. The SEC further alleges that Trahan sold the stock shortly after the announcement of the acquisition for a profit of $69,735. Read More
On July 19, 2017, the Securities and Exchange Commission (“SEC”) announced fraud charges against Flowers and Nevett, two California men, and a company behind an alleged scheme to manipulate the stock prices of two shell companies.
The SEC alleges that Troy Flowers and his partner Sean Nevett illegally concealed their control and ownership of Licont Corp. and Artec Global Media by using multiple accounts that they controlled in the names of other people and entities. They then allegedly created the false appearance of active trading by making manipulative trades from those accounts to inflate the stock prices. According to the SEC’s complaint, Flowers and Nevett subsequently dumped their own shares into the open market at the expense of innocent investors, who were left with stock that is virtually worthless. Read More
On July 19, 2017, the Securities and Exchange Commission (“SEC”) barred David Lubin, a New York-based attorney, from appearing or practicing before it and acting as an officer or director of a public company after finding that he made false and misleading statements in corporate filings.
The SEC’s order finds that David Lubin committed fraud while serving as a director and corporate counsel of Entertainment Art, a public company in which Lubin also was a large shareholder. Lubin negotiated the sale of all of the outstanding stock of Entertainment Art, including both restricted and previously registered shares that were purportedly “free trading,” to an acquaintance interested in purchasing shell companies. Absent a valid exemption, common ownership of all of the shares of a public company would require the owner to register the shares for resale to the public. According to the SEC’s order, David Lubin fraudulently misrepresented in Entertainment Art’s corporate filings that the purportedly free-trading shares had not been purchased by the acquaintance. This left the false impression that those shares remained immediately available for public resale. During the next two years and until he left the company, Lubin drafted and signed SEC filings that continued to lie about the true ownership of the company’s stock.
On June 19, 2017, the Securities and Exchange Commission (“SEC”) has obtained a default judgment against foreign defendant, Yu-Cheng Lin, charged with insider trading that orders him to pay approximately $7.3 million.
The court’s final judgment, entered on June 12, 2017 by U.S. District Judge Jose Linares, permanently enjoins Yu-Cheng Lin, also known as Believe Lin, from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment also orders Yu-Cheng Lin to pay disgorgement of approximately $1.8 million, prejudgment interest of approximately $44,000, and a civil penalty of approximately $5.4 million. The court’s entry of judgment resolves this litigation in its entirety. Read More
On July 14, 2017, the Securities and Exchange Commission (“SEC”) announced that it has obtained a final judgment in a fraud case against Steven Labriola, the international sales director of a pyramid scheme targeting Latino communities.
The final judgment, entered on consent by a federal district court in Boston, Massachusetts, permanently enjoins Steven Labriola from violating Section 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, imposes a conduct-based injunction, and orders Steven Labriola to pay approximately $25,000 in disgorgement and prejudgment interest. As part of the settlement, Steven Labriola admitted that he was responsible for TelexFree’s relationships with its promoters, ran numerous training conferences, and that he was one of the main public faces of TelexFree, providing periodic “corporate updates” and appearing in other promotional videos that were posted on YouTube. Read More
On June 27, 2017, the Honorable Douglas P. Woodlock of the U.S. District Court for the District of Massachusetts entered final judgments against the former CEO and CFO of LocatePlus Holdings Corp, a Massachusetts-based information technology company.
The SEC charged Jon Latorella of Marblehead, Massachusetts and James Fields of Brookline, Massachusetts with fraud for falsifying LocatePlus Holdings Corp.’s financial reporting. The final judgments, entered on June 27, 2017 by the Honorable Douglas P. Woodlock of the U.S. District Court for the District of Massachusetts, enjoin both Latorella and Fields from violating Sections 5 and 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2)(A) and (B), and 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13b2-1 and 13b2-2 and impose penny stock and officer-and-director bars. Read More
On July 14, 2017, the Securities and Exchange Commission (“SEC”) announced fraud charges against Diana Lovera, the former Chief Operating Officer of a Florida-based penny stock company that falsely claimed to be “the largest publicly traded diversified portfolio of professional sports teams in the world.”
The SEC’s complaint alleges that, from approximately July 2013 to July 2015, Diana Lovera and others at Oxford City used pressure tactics and a boiler room of salespeople to raise approximately $6.6 million from more than 150 investors, many of whom were unaccredited, through the sale of millions of unregistered shares of Oxford City stock. The complaint alleges that, in connection with these unregistered stock offerings, Lovera made numerous misstatements to investors about Oxford City’s assets, its business plan, its future profitability, and the composition of its management. The complaint further alleges that Lovera and others falsely told prospective investors they could “lock in” a discounted price on Oxford City stock using the company’s “voice verification system,” which they claimed linked the investor’s personal information to a filing with the SEC. In reality, the complaint alleges, there was no such voice verification system; Lovera and others merely pressed buttons on a telephone key pad to mimic a recording device. Read More
On June 13, 2017, the Honorable William J. Martini of the United States District Court for the District of New Jersey entered a judgment against defendant James Trolice that imposed permanent injunctions and an officer and director bar.
The SEC’s complaint, filed on May 4, 2016, alleged that James Trolice and Lee P. Vaccaro pocketed the approximately $6 million they raised from more than 100 investors for limited liability companies they owned and controlled that purportedly held warrants to purchase the common stock of a technology startup company. Trolice and Vaccaro created a false sense of urgency and exclusivity around the offering, claiming that only a limited amount of warrants were available and that they eventually could be exercised at a very profitable price. The complaint further alleged that James Trolice lured investors by showcasing his apparent wealth and hosting elaborate investor parties at his multi-million-dollar home. He also touted his purported track record of bringing startup companies public and obtaining high returns for investors. Meanwhile, Trolice allegedly used investor funds to pay his mortgage along with other bills for a credit card, car lease, college tuition, and landscaping. Read More
On July 12, 2017, the Securities and Exchange Commission (“SEC”) announced fraud charges against Victory Ho for insider trading in the securities of The Shaw Group, Inc. (Shaw), a Louisiana-based energy construction company, ahead of a public announcement on July 30, 2012 that Shaw was going to be acquired by Chicago Bridge & Iron Company N.V.
The SEC’s complaint, filed in the U.S. District Court for the Western District of Louisiana, alleges that during July of 2012, Victory Ho obtained confidential non-public information about the impending Shaw merger. Ho then used all of the money in a newly-opened brokerage account – about $8,000 – to purchase 296 Shaw short term call options on Friday, July 27, 2012, the last trading day before the public announcement of the merger. Prior to purchasing these options, Victory Ho had multiple communications with two individuals who had personal relationships with a Shaw employee who had information concerning the merger. The SEC further alleges that Ho sold the options shortly after the announcement of the acquisition for a profit of approximately $295,000. Read More
On July 13, 2017, the Securities and Exchange Commission (“SEC”) announced that it has obtained a judgment and industry bar against Charles Banks, an Atlanta-based investment adviser, charged with defrauding a former professional basketball player.
According to the SEC’s complaint, Charles Banks, IV fraudulently induced the former professional athlete to invest $7.5 million in a sports team apparel and merchandise company based on a series of misrepresentations about the investment and allegedly misappropriated funds from his client. Read More
On July 12, 2017, the Securities and Exchange Commission (“SEC”) announced insider trading charges against Fei Yan, a research scientist, who allegedly searched the internet for “how sec detect unusual trade” before making a trade that the agency flagged as suspicious through data analysis.
The SEC’s complaint alleges that Fei Yan loaded up on stocks and options in advance of two corporate acquisitions late last year based on confidential information obtained from his wife, an associate at a law firm that worked on the deals.
On July 5, 2017, the Securities and Exchange Commission (“SEC”) announced that it has obtained a final judgment against Ryan Petersen, the former chief executive officer of OCZ Technology Group Inc. whom the SEC charged with an accounting fraud at the now-bankrupt seller of computer memory storage and power supply devices.
The final judgment, entered by the Honorable Richard Seeborg, U.S. District Judge, U.S. District Court for the Northern District of California on June 30, 2017, permanently enjoins Ryan Petersen from violating Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934, and Exchange Act Rules 10b-5, 13a-14, 13b2-1, and 13b2-2, and aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B), and Exchange Act Rules 12b-20, 13a-1, 13a-11, and 13a-13. The judgment also bars Petersen from acting as an officer or director of a public company, and orders him to pay $121,600 in disgorgement and relief pursuant to Section 304(a) of the Sarbanes-Oxley Act of 2002, prejudgment interest on the disgorgement of $18,400, and a civil penalty in the amount of $100,000. Petersen consented to the final judgment. Read More
On July 7, 2017, the Securities and Exchange Commission (“SEC”) announced charges against K-T 50 Wells, a purported oil well company, its founders, and three salespeople in connection with a $2.4 million offering fraud.
The SEC’s complaint, filed in U.S. District Court for the Central District of California, alleges that from approximately May 2014 to February 2016, Kentucky-Tennessee 50 Wells/400 BBLPD Block, Limited Partnership (K-T 50 Wells) fraudulently offered and sold unregistered securities to investors using a boiler room operation, raising approximately $2.4 million from 41 investors nationwide. The complaint further alleges that Carol Wayland and her son, John Mueller, founded and operated K-T 50 Wells and conducted the offering through two other entities that they owned and controlled, HP Operations, LLC and C.A.R. Leasing, LLC. To solicit investors, Wayland and Mueller allegedly set up a boiler room under the fictitious name of “Sahara Wealth Advisors” where they employed numerous salespeople, including Mitchell Dow, Barry Liss, and Steve Blasko, all of whom allegedly had prior experience working in boiler rooms. Read More
On June 9, 2017, the Honorable Esther Salas of the U.S. District Court for the District of New Jersey entered judgments against Dwayne Edwards, several entities Edwards used to orchestrate his alleged fraud, and relief defendant Sharon Nunamaker.
The judgment against Edwards and the entity defendants and relief defendants imposes permanent injunctions against future violations 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, and aiding and abetting violations of 17(a), 10(b), and Rule 10b-5, a permanent injunction from future participation in municipal securities offerings by Edwards, and orders payment of disgorgement, prejudgment interest thereon, and civil money penalties in amounts to be determined at a later date. The entity defendants are Senior Solutions of Social Circle, LLC, Oxton Place of Douglas, LLC, d/b/a Oxton Real Estate of Douglas, LLC, Rome ALF, LLC, Savannah ALF, LLC, Gainesville ALF, LLC, Waterford Place ALF, LLC, Montgomery ALF, LLC, Columbus ALF, LLC, and Opelika ALF, LLC, and the relief defendants are Oxton Senior Living, LLC, and Manor House Senior Living, LLC. The final judgment against Nunamaker orders her to pay disgorgement and prejudgment interest thereon of $7,742.16. Edwards consented to the entry of the judgment, which continues the receivership over the facilities, on behalf of both himself and his entities. Nunamaker also consented to the entry of the final judgment. Read More
On June 19, 2017, the Securities and Exchange Commission (“Commission”) deemed 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 Michael Randles.
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, Respondent admits the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in a paragraph below, and consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (“Order”), as set forth below. Read More
On June 30, 2017, the Securities and Exchange Commission (“SEC”) announced that the Honorable Jacqueline Scott Corley, U.S. Magistrate Judge for the Northern District of California, entered a final judgment as to Sasan Sabrdaran, the former director of drug safety risk management at Brisbane, California-based InterMune, Inc., and his long-time friend, Farhang Afsarpour. The final judgment orders payment of disgorgement and prejudgment interest and imposes an officer and director bar following a jury verdict that found both defendants had engaged in insider trading.
As shown at trial, Sabrdaran tipped Afsarpour in 2010 with confidential details while Sabrdaran was involved with shepherding InterMune’s application before a European Union regulatory body to market an InterMune drug called Esbriet to be used for the treatment of patients with a type of fatal lung disease. Afsarpour then acted on that tip by purchasing InterMune common stock on a U.S. stock exchange through his U.S.-based stockbroker and by purchasing spread bets on the future price movement in InterMune common stock or options through a U.K-based spread-betting firm. Afsarpour also tipped friends who gave him money with which he purchased certain of the spread bets through his account or who purchased InterMune common stock, options, or spread bets through their own accounts. Read More
On July 3, 2017, the Securities and Exchange Commission (“SEC”) announced charges against Cheryl Jones, a Washington, D.C.-based real estate agent and the sister of convicted Ponzi scheme operator Mark Jones, for selling unregistered securities.
The SEC’s complaint, filed in federal court in Boston, alleges that Cheryl Jones recruited many of her friends and associates to invest in unregistered promissory notes and personal guarantees that Mark Jones issued in connection with his Ponzi scheme. Mark Jones allegedly claimed that investors’ money would be pooled to provide short-term “bridge loans” to Jamaican companies that had supposedly been approved for commercial bank loans but needed interim financing until their bank loan funding came through. Mark Jones allegedly told investors that their investments would earn interest of approximately 15% to 24% annually. Instead, as the complaint alleges, Mark Jones deposited the investors’ money in his personal bank account and diverted almost all of it for personal expenses and to make “Ponzi” payments to other investors. The complaint also alleges that Mark Jones agreed to pay Cheryl Jones commissions of approximately 10% of the principal invested by new investors she referred to him. He also allegedly paid her a monthly “legal retainer” for services to him or the Bridge Fund. The complaint further alleges that between 2007 and 2015, Cheryl Jones was wrongfully enriched when she received payments from her brother totaling approximately $515,000 more than her approximately $876,000 investment in the Bridge Fund. Other investors lost substantial portions of their investments. Read More
The Securities and Exchange Commission (Commission) announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the Exchange Act), of trading in the securities of Pilgrim Petroleum CORP, of Addison, Texas commencing at 9:30 a.m. EDT on June 30, 2017, and terminating at 11:59 p.m. EDT on July 14, 2017.
The Commission temporarily suspended trading in the securities of Pilgrim Petroleum CORP due to a lack of current and accurate information about the company because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things. This order was entered pursuant to Section 12(k) of the Exchange Act. Read More
On June 30, 2017, the Securities and Exchange Commission (“SEC”) filed fraud charges against Renwick Haddow, the clandestine founder of a purported Bitcoin platform and a chain of co-working spaces located in former bars and restaurants, alleging that he bilked investors in both companies while hiding his connection given his checkered past with regulators in the U.K.
The SEC alleges that Renwick Haddow, a U.K. citizen living in New York, created a broker-dealer and did not register the firm with the SEC as required under the federal securities laws. Renwick Haddow allegedly used sales representatives to cold call potential investors and sell securities in Bitcoin Store Inc. and Bar Works Inc.
On June 30, 2017, the Securities and Exchange Commission (“SEC”) has charged Chicago-area information technology company Quadrant 4 System Corp. (QFOR) and two former top executives in an accounting fraud scheme that misled investors and allowed the former executives to siphon millions from the firm for their personal benefit.
The SEC’s complaint, filed yesterday in the U.S. District Court for the Northern District of Illinois, alleges that former chief executive officer Nandu Thondavadi and former chief financial officer Dhru Desai stole more than $4 million from Schaumburg, Illinois-based Quadrant 4 System Corp over a nearly five-year period. The former executives also are alleged to have caused Quadrant 4 System Corp to understate its liabilities and inflate its revenues and assets, evading scrutiny by lying to the company’s auditors and providing them with forged and doctored documents.
On June 28, 2017, the Securities and Exchange Commission (“SEC”) charged Penn West Petroleum Ltd., a Canadian-based oil and gas company, and three of its former top finance executives for their roles in an extensive, multi-year accounting fraud.
The SEC’s complaint alleges that Penn West Petroleum Ltd., which has since been renamed Obsidian Energy Ltd., fraudulently moved hundreds of millions of dollars in expenses from operating expense accounts to capital expenditure accounts. This alleged fraudulent movement caused Penn West to artificially reduce its operating costs by as much as 20 percent in certain periods, which falsely improved reported metrics for oil extraction efficiency and profitability. Penn West was one of Canada’s largest oil producers at the time.
On June 26, 2017, the Securities and Exchange Commission (“Commission”) announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading in the securities of Ibex Advanced Mortgage Technology, Inc. (“IBXM”), of Sarasota, Florida at 9:30 a.m. on June 27, 2017, and terminating at 11:59 p.m. on July 11, 2017.
The Commission temporarily suspended trading in the securities of Ibex, IBXM, due to a lack of current and accurate information about the company because it has not filed certain periodic reports with the Commission. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act). Read More
One June 27, 2017, the Securities and Exchange Commission (“SEC”) announced insider trading charges against two former senior employees and the spouse of a former employee of Ariad Pharmaceuticals, Inc., a company based in Cambridge, Massachusetts engaged in the business of developing and marketing drugs to treat cancer.
According to the SEC’s complaints, filed in federal court in Boston, Massachusetts, the defendants traded in Ariad’s stock in advance of announcements about U.S. Food and Drug Administration (FDA) decisions that impacted the sales and marketing of the company’s main product. Additionally, the SEC’s complaints allege that: Read More
On June 22, 2017, the Securities and Exchange Commission (“SEC”) announced additional charges in an enforcement investigation involving Anthony Portelli, a Wall Street firm’s securities lending desk, and the improper handling of American Depositary Receipts (ADRs).
The SEC’s order finds supervisory failures by Anthony Portelli, a former managing director and head of operations at broker-dealer ITG Inc. Anthony Portelli supervised ITG’s securities lending operations and was responsible for the firm’s compliance with “pre-release agreements” for ADR transactions. ADRs are U.S. securities that represent foreign shares of a foreign company. Before obtaining a “pre-released ADR” to lend to a customer, brokers like ITG must own, or determine that a customer owns, the number of foreign shares that corresponds to the number of shares the ADR represents. Under Portelli’s watch, personnel on ITG’s securities lending desk failed to take reasonable steps to determine whether the proper amounts of foreign shares were owned and held by ITG’s customers. This failure opened up the possibility that the ADRs could be used improperly for short selling or dividend arbitrage.
