SEC Charges Five With Short Sale Violations
The Securities and Exchange Commission (“SEC”) has charged five short sellers who were traders for committing short selling violations. According to the SEC, the short sellers were trading for themselves and Worldwide Capital Inc., a Long Island, N.Y.-based proprietary firm that earlier this year paid the largest-ever monetary sanction for Rule 105 violations. Worldwide Capital and its owner Jeffrey W. Lynn agreed to pay $7.2 million to settle SEC charges in March for violating Rule 105, which prohibits the short sale of an equity security during a restricted period – generally five business days before a public offering – and the subsequent purchase of that same security through the offering.
The SEC instituted settled administrative proceedings against Derek W. Bakarich, Carmela Brocco, Tina Lizzio, Steven J. Niemis, and William W. Vowell for violating Rule 105 by selling shares short during the restricted period and purchasing offering shares of the same securities they had shorted. They purchased the offering shares through accounts they opened in their names or names of alter ego corporate entities at large broker-dealers and then executed the short sales of the securities through an account in Worldwide’s name at different, smaller broker-dealers.
“These individuals shared in profits generated by transactions that violated important short selling regulations in place to protect the markets from manipulative trading activity,” said Andrew M. Calamari, director of the SEC’s New York Regional Office.
Each of the five traders agreed to settle the SEC’s charges and pay a collective total of nearly $750,000.
“When conducting these trades, these individuals did not comply with the law,” said Amelia A. Cottrell, associate director of the SEC’s New York Regional Office. “Now they must forfeit the profits they earned on their respective trades plus additional penalties.”
According to the SEC’s orders, Bakarich, Brocco, Lizzio, Niemis, and Vowell were selected by Lynn to conduct short sale trades for Worldwide Capital, which he created for the purpose of investing and trading his own money. The traders he chose to trade his capital pursued an investment strategy focused primarily on obtaining allocations of new shares of public issuers coming to market through secondary and follow-on public offerings at a discount to the market price of the company’s shares that were already trading publicly. They made short sales in advance of the offerings, hoping to profit by the difference between the price they paid to acquire the offered shares and the market price on the date of the offering. From approximately August 2009 to March 2012, Bakarich, Brocco, Lizzio, Niemis, and Vowell each violated the short sale rules in connection with at least nine covered offerings. They received ill-gotten gains ranging from approximately $16,000 to more than $200,000.
Each of the five traders agreed to cease and desist from violating Rule 105 without admitting or denying the findings in the SEC’s order. They agreed to disgorge all of their ill-gotten gains plus prejudgment interest and pay an additional penalty equal to 60 percent of the disgorgement amount:
Bakarich, who lives in Duluth, Ga., agreed to pay $16,231 in disgorgement, $757 in prejudgment interest, and a $9,739 penalty for a total of $26,727.
Brocco, who lives in East Meadow, N.Y., agreed to pay $215,233 in disgorgement, $27,056 in prejudgment interest, and a $129,140 penalty for a total of $371,429.
Lizzio, who lives in Boca Raton, Fla., agreed to pay $28,864 in disgorgement, $1,548 in prejudgment interest, and a $17,319 penalty for a total of $47,731.
Niemis, who lives in Jupiter, Fla., agreed to pay $130,842 in disgorgement, $5,893 in prejudgment interest, and a $78,505 penalty for a total of $215,240.
Vowell, who lives in Manasquan, N.J., agreed to pay $51,519 in disgorgement, $4,427 in prejudgment interest, and a $30,911 penalty for a total of $86,857.
For further information about short sale transactions, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com
NutraFuels Launches Extreme Energy Spray
COCONUT CREEK, FL, Jul 01, 2014 (Marketwired via COMTEX) — NutraFuels, Inc. (PINKSHEETS: NTFU), a manufacturer of oral spray dietary supplements, announced today that the company plans to launch its latest product, TapoutT XT Extreme Energy Oral Spray in the month of August. Read More
The SEC’s Cross-Border Security Swap Rules
The Securities and Exchange Commission (“SEC”) adopted the first of a series of rules and guidance on cross-border securities swap activities for market participants.
The SEC will use the new rules to finalizing the remaining proposals. Read More
SEC Announces Tick Size Plan
On June 25, 2014, the Securities and Exchange Commission (the “SEC”) announced its tick size plan whereby it ordered that the national securities exchanges and the Financial Industry Regulatory Authority (“FINRA”) to act jointly to develop and file with the Commission a national market system plan. Read More
FINRA Brings Transparency to Rule 144A Corporate Debt Transactions
On June 30, 2014, the Financial Industry Regulatory Authority (“FINRA”) began publicly disseminating Rule 144A transaction data in corporate debt securities, bringing transparency to a market. 144A transactions—resales of restricted corporate debt securities to large institutions called qualified institutional buyers (QIBs)—account for a significant portion of the volume in corporate debt securities. Read More
FINRA Fines Goldman Sachs Execution & Clearing $800,000
On July 1, 2014, the Financial Industry Regulatory Authority (“FINRA”) announced that it had fined Goldman Sachs Execution & Clearing, L.P. $800,000 for failing to have reasonably designed written policies and procedures in place to prevent trade-throughs of protected quotations in NMS stocks from November 2008 through August 2011 in connection with trading in its proprietary alternative trading system, SIGMA-X. Read More
Securities Lawyers Gone Wild – Marcus Luna
On June 27, 2014, the U.S. District Court of Nevada issued an order imposing sanctions against a securities attorney, Marcus Luna, three other individuals – Nathan Montgomery, Adam Daskivich, and David Murtha – and their businesses for their roles in a multi-million dollar scheme. Read More
SEC Charges 3 Regions Bank Executives
On June 25, 2014, the Securities and Exchange Commission (the “SEC”) announced fraud charges against three former senior managers of Regions Bank for intentionally misclassifying loans that should have been recorded as impaired for accounting purposes. As a result, the bank’s publicly-traded holding company overstated its income and earnings per share in its financial reporting. The SEC also entered into a deferred prosecution agreement with Regions Financial Corp., which substantially cooperated with the agency’s investigation and undertook extensive remedial actions.
Being Publicly Traded By: The Going Public Lawyers
After an issuer completes its going public transaction, an issuer that has filed a registration statement for an initial or direct public offering under the Securities Act of 1933, as amended (the “Securities Act”) must file annual, quarterly and current reports with the Securities and Exchange Commission (“SEC”) under Section 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Section 15(d) reporting requirements apply even if the public company does not list its securities on a national securities exchange or market and the company has not met the size thresholds requiring registration under Securities Exchange Act.
A Company’s periodic reports and filings with the SEC update and supplement public disclosures that the issuer made in its previous registration statement or other SEC filings. Issuers must file their periodic reports within a specified number of days after the end of each reporting period and file reports on Form 8-K after certain material events. Generally, Annual Reports on Form 10-K must be filed 90 days after the issuer’s year end. Quarterly Reports must be filed 45 days after the quarter and Reports on Form 8-K must be filed within 4 days of the triggering event. Read More
FINRA Bars Success Trade Securities By: Brenda Hamilton Attorney
This month Success Trade Securities was ordered to pay $13.7 million in restitution and expelled by a Financial Industry Regulatory Authority (“FINRA”) hearing panel. Success Trade Securities allegedly ran a Ponzi scheme targeting professional athletes. FINRA claimed that many of the athletes that invested were financially inexperienced and included Detroit Pistons guard Brandon Knight, and Cleveland Browns cornerback Joe Haden. Read More
Transparency Bootcamp – Custodianship Disclosures In Reverse Mergers
Recently custodianship and/or receivership proceedings involving publicly traded companies have been in the spotlight because of the increasing number of fraudsters seeking these appointments so that they can create their own personal inventory of public shell companies for reverse merger transactions. Because custodians are fiduciaries all states impose disclosure obligations on any person seeking appointment as a custodian. As explained below, fraudsters with disciplinary history go through considerable lengths to conceal their backgrounds. Read More
Transparency Bootcamp – BrokerCheck 101 By: Brenda Hamilton Attorney
Any investor seeking to find out information about a penny stock should begin by investigating management, brokers and the promoters involved with the issuer. FINRA BrokerCheck provides a free online database about brokers and brokerage firms, as well as investment adviser firms and representatives. Investors can learn whether current or former persons involved with the issuer has been sanctioned by securities regulators. Read More
SEC Extends DTC Proposal Period By: Brenda Hamilton
On December 5, 2013, The Depository Trust Company (“DTC”) submitted DTC proposals to change SR-DTC-2013-11 (“Proposed Rules”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 19b-4 thereunder to the Securities and Exchange Commission (the “SEC”). On March 10, 2014, DTC filed Amendment No 2 to the Proposed Rules. On March 19, 2014, the SEC published Amendment Nos. 1 and 2 for comment, and instituted proceedings to determine whether to approve or disapprove the DTC Proposals, as modified by Amendment Nos. 1 and 2 (“Order Instituting Proceedings”). Read More
New OTCQB Requirements, Listing & Quotation – OTCQB Lawyer
Hamilton & Associates Law Group – Client Update
The OTC Markets Group recently established new eligibility standards for the securities companies to quoted on the OTCQB® Venture Stage Marketplace. OTCQB companies must comply with the new OTCQB eligibility requirements within 120 days after its fiscal year end. This new requirements include an annual certification and annual fees. Issuers with a March 31st fiscal year end must comply with the new OTCQB eligibility requirements by July 31, 2014. Companies that do not comply with the new procedures within the time allowed will be demoted to the OTC Pink tier.
OTCQB Annual Certification
Under the new eligibility requirements, each OTCQB company will be required to post an annual certification through the OTC Markets website stating: (i) the company’s reporting standard and describing the registration status of the company; (ii) that the company is current in its SEC reporting requirements and such information has been posted either on the SEC’s EDGAR database or the OTC Markets website; (iii) the identity of the law firm and/or securities attorneys involved in the preparation of the issuer’s Annual Report or Form 10-K; (iv) the company’s public profile posted on the OTC Markets website is current and complete; (v) the total number of shares outstanding and in the company’s public float as of the most recent fiscal year end; and (vi) the names and securities ownership of all officers, directors, and shareholders holding more than five percent of the company’s shares outstanding. Read More
Form S-1 Going Public Bootcamp – Going Public Lawyers
The process of “going public” with a SEC registration statement is complex and at times precarious. While going public offers many benefits it also comes with risks and quantities of regulations with which issuers must become familiar. Despite the risks even in a down economy, the U.S. markets remain an attractive source of capital for both domestic and foreign issuers. It is important for issuers to have an experienced securities attorney to help navigate through the process and deal with the Securities & Exchange Commission (“SEC”), Financial Regulatory Authority (“FINRA”) & Depository Trust Company (“DTC”). Upon completion of a going public transaction, the company is subject to the regulations that apply to public companies, including those of the Securities Act of 1933, as amended (“Securities Act”) and Securities Exchange Act of 1934, as amended (“Exchange Act”).
This blog post addresses common questions we receive about the going public process using Form S-1.
Going Public Lawyer Insights About DPOI’s & IPO’s
A private company going public is subject to three federal securities laws, each with its own unique requirements. The three laws are the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”) and the Sarbanes-Oxley Act of 2002 (”Sarbanes-Oxley”). In addition to the federal securities laws, companies going public are subject to state securities regulation of their securities public and private offerings. The Securities Act sets forth the regulations that govern the offer and sale of securities by an issuer and certain shareholders.
The Securities Act governs both private offerings such as those conducted under Regulation D and public offerings such as those registered on Form S-1, Form S-8 or Form S-4. Upon completion of a going public transaction, the Exchange Act imposes periodic reporting obligations including the filing of Form 10-K, 10-Q and 8-K.
For issuers who register a class of securities under the Securities Exchange Act in connection with their going public transaction, the Exchange Act imposes proxy rules requiring certain disclosures be made on Schedules 14A or 14C and certain procedures for the solicitation of shareholder votes. Read More
SEC Periodic Reports – Going Public Attorneys
Issuers become subject to the SEC’s periodic reporting requirements a number of ways including by filing a registration under the Securities Act of 1933, as amended or pursuant to the Securities Exchange Act of 1934. The SEC rules that apply to periodic reports require that publicly traded companies disclose a wealth of information to the public. Periodic reporting also requires that these reports be written in plain English. Understanding these reports helps investors make informed decisions regarding whether to buy, sell or hold a company’s securities.
Periodic reports provide issuers with the opportunity to provide shareholders with transparency by telling their story. Companies that provide materially false or misleading statements, or omit material information that is necessary to render a report not misleading in their periodic reports are subject to liabilities arising under federal and state securities laws. Investors can obtain a company’s Form 10-K, Form 10-Q and Form 8-K filings on the SEC’s EDGAR database. Read More
DPO-IPO Registration Statement Attorneys
Many private companies particularly small businesses are unable to locate an underwriter prior to filing a registration statement to go public. Registration statement attorneys often recommend that issuers use of a resale registration statement when they are unable to locate an underwriter. A direct public offering (“Direct Public Offering”) provides a viable solution to this dilemma. A Direct Public Offering allows a company to sell its shares directly to investors without the use of an underwriter. With a Direct Public Offering, the company files a registration statement with the Securities and Exchange Commission (“SEC”) to register a securities offering under the Securities Act of 1933, as amended (the “Securities Act”).
Typically, in going public transaction Form S-1 (”S-1”) registration statements are used. A company can use a Form S-1 registration statement to register securities on its own behalf in an initial public offering, register securities on behalf of its selling security holders in a secondary offering or register securities on its own behalf as well as for selling security holders.
Using a Direct Public Offering to Go Public
All issuers qualify to file a registration statement on Form S-1 and it is the most common registration statement form used in going public transactions. Filing a Form S-1 registration statement in connection with a going public transaction eliminates many of the risks and expenses associated with reverse mergers including among other things, undisclosed liabilities, sketchy corporate records, DTC Chills, Global Locks and SEC trading suspensions. Read More
SEC Issues Trading Suspensions To Prevent Corporate Hijackings
On June 11, 2014, the U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of LifeHealthCare, Inc. (LFHE), Smartlinx, Inc. (SMLK) and Total Apparel Group, Inc. (TLAG). Read More
SEC Initiates Proceedings Against Six Issuers to Prevent Corporate Hijackings
This week the Securities and Exchange Commission (“Commission”) announced it deemed it necessary and appropriate for the protection of investors that public administrative proceedings be instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”) against six issuers, The Bank Holdings, Community Valley Bancorp, Genemen, Inc., GWS Technologies, Inc., Homeland Precious Metals Corp., and NuRx Pharmaceuticals, Inc. In the past two years, the Commission has revoked and/or suspended more than 1000 issuers involved in corporate hijackings. Read More
SEC Reinstates Richard Hylland, CPA to Practice Before the Commission
On June 11, 2014, the Securities and Exchange Commission (the “SEC”) announced that it had reinstated Richard Hylland, CPA to practice before the SEC.
On July 16, 2007, Richard Hylland, CPA (“Hylland”) was suspended from appearing or practicing before the Commission as an accountant as a result of settled public administrative proceedings instituted by the Commission against Hylland pursuant to Rule 102(e)(3)(i) of the Commission’s Rules of Practice. Read More
SEC Charges Robert Acri – Chicago Securities Attorney
On June 12, 2014, the Securities and Exchange Commission (the “SEC”) charged a securities attorney and founder of an investment advisory firm located in suburban Chicago with defrauding investors in connection with a real estate venture for which his firm offered securities. After an SEC examination of Kenilworth Asset Management LLC detected potential misconduct that was referred to the agency’s Enforcement Division, the ensuing investigation found that Robert Acri misled clients in the offer and sale of promissory notes issued for the redevelopment of a retail shopping center near Hammond, Ind.
Despite saying the investments would specifically be used for this project and secured by a security interest in real estate, Acri misappropriated $41,250 of the proceeds for other uses and took no action to ensure that a security interest was recorded. Acri failed to disclose several other material facts to investors, including a primary purpose behind the investment offer – Kenilworth was attempting to rescue money that other Acri clients had previously invested in the developer of the same real estate project. Acri also concealed from investors that Kenilworth was to receive a five percent commission on each sale of notes.
Acri, a securities attorney who lives in Winnetka, Ill., agreed to settle the SEC’s charges by disgorging the misappropriated investor funds and undisclosed commissions plus interest and an additional penalty for a total of approximately $115,000 in monetary sanctions. Acri also agreed to cease and desist from violations of the antifraud provisions of the federal securities laws and to be barred from the securities industry, from participating in penny stock offerings, and from appearing before the SEC as a securities attorney on behalf of any entity regulated by the agency. Acri resigned from Kenilworth in August 2012.
“Acri wasn’t honest with his clients and hid serious conflicts of interest from them while blatantly disregarding his fiduciary duty as an investment adviser,” said Robert J. Burson, senior associate regional director of the SEC’s Chicago office.
According to the SEC’s order instituting a settled administrative proceeding, Acri controlled Kenilworth’s bank accounts, hired employees, and made significant decisions about the firm’s policies, practices, and investment offers to clients. In early 2011, securities attorney, Robert Acri decided to raise funds from Kenilworth clients for the Hammond, Ind., project when the project’s developer Praedium Development Corporation was unable to obtain financing from banks and other traditional lenders. As part of this effort, Praedium created a new entity Prairie Common Holdings LLC to issue the notes. One of Acri’s primary purposes for selling Prairie’s notes to Kenilworth clients was to give other Kenilworth clients who had invested in Praedium through a private fund several years earlier a chance to recover their money from that investment. Praedium had previously defaulted on a half-million-dollar loan from the private fund.
The SEC’s order finds that Acri purposely failed to disclose significant facts and conflicts of interest when offering the promissory notes to clients, who were not told about the prior loan or that Praedium and an affiliate had been delinquent in the payment of its mortgage, property taxes, and some contractor invoices. In fact, despite being a securities attorney, Acri did not even disclose that Praedium was the developer behind the Prairie project or that one of Praedium’s owners was having personal financial difficulties and was Acri’s personal friend.
According to the SEC’s order, Acri misappropriated $41,250 from the client funds that were supposed to be used to develop the Hammond, Ind. Project. Acri instead used that money to repay other clients and former clients, pay an individual to purportedly seek a loan for Praedium, and toward a settlement in a separate lawsuit that had been brought against him. Acri also did not inform investors about the $13,750 that Kenilworth received in commissions for selling the promissory notes.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, or [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information about going public and the rules and regulations affecting the use of Rule 144, Form 8K, crowdfunding, FINRA Rule 6490, Rule 506 private placement offerings and memorandums, Regulation A, Reverse Merger transactions,Form S-1 , IPO’s, OTC Pink Sheet listings, Form 10 OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or [email protected]. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com
SEC Charges Reverse Merger Purveyors By: Brenda Hamilton Attorney
On May 5, 2014, the Securities and Exchange Commission (the “SEC”) charged a Toronto-based consultant and four associates with conducting illegal reverse mergers with China-based companies to engage in pump and dump schemes. The SEC alleges that S. Paul Kelley and three associates acquired controlling interests in two U.S. public shell companies in order to orchestrate reverse mergers with China Auto Logistics Inc. and Guanwei Recycling Corp.
Fugitive Fraudster Aubrey Price Pleads Guilty
Posted by Brenda Hamilton Securities Attorney
On June 5, 2014, fugitive banker Aubrey Price plead guilty to bank, securities and wire fraud charges. Aubrey Price faces up to 30 years in prison and millions in restitution and fines.
In 2012, Price controlled more than $10 million of investor funds that were put invested into Montgomery Bank Trust, a small bank located in Alabama. Read More
$875,000 Awarded to SEC Whistleblower By: Brenda Hamilton Attorney
This week the Securities and Exchange Commission (the “SEC”) announced a whistleblower award of more than $875,000 to be split evenly between two individuals who provided tips and assistance to help the agency bring an enforcement action. The SEC’s Whistleblower Program authorized by the Dodd-Frank Act 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. The total award represents 30% of the amount collected by the SEC in this case – the maximum percentage award allowed under the SEC Whistleblower Program. Under the Dodd-Frank Act, the SEC must protect the confidentiality of whistleblowers and cannot disclose any information that might directly or indirectly reveal a whistleblower’s identity. Read More
Unregistered Broker-Dealer Activity on the Rise By: Brenda Hamilton
The Securities and Exchange Commission (“SEC”) Division of Enforcement is pursuing unregistered broker-dealer activity which runs rampant in the penny stock markets. Since Rule 506(c) was created many unregistered broker-dealers have appeared in the OTC marketplace touting their skills as capital raisers despite not being registered with the SEC.
SEC Charges John Bensen & DGSE Companies By: Brenda Hamilton Attorney
On May 27, 2014, the Securities and Exchange Commission (“SEC”) announced accounting fraud charges against a Dallas-based company and its former chief financial officer for manipulating its inventory accounts. The SEC alleges that John Benson made repeated false accounting entries that materially inflated the value of inventory on the balance sheets at DGSE Companies Inc (“DGSE”). DGSE buys and sells jewelry, diamonds, fine watches, rare coins, precious metals and other collectibles.
Benson’s entries made it appear that DGSE owned certain inventory that actually still belonged to customers in consignment arrangements where DGSE held the goods on the owner’s behalf until they were sold. Benson then misled the company’s independent auditors about the journal entries, and DGSE subsequently overstated its inventory by anywhere from 99.1 percent to 227.4 percent in public filings during 2009, 2010, and 2011.
DGSE agreed to settle the SEC’s charges, and Benson agreed to a settlement in which he will pay a $75,000 penalty, be permanently barred from serving as an officer or director of a public company, and be suspended from practicing as an accountant on behalf of any publicly traded company or other entity regulated by the SEC.
According to the SEC’s complaint filed in the Dallas Division of U.S. District Court for the Northern District of Texas, deficiencies in DGSE’s accounting systems and controls led to problems that significantly compromised the integrity of the company’s financial data. The deficiencies included the failure to properly record intercompany transactions such as inventory transfers between stores. As a result, DGSE’s intercompany accounts became out of balance by millions of dollars.
The SEC alleges that Benson subsequently made a number of fraudulent accounting entries in order to bring the intercompany accounts and DGSE’s general ledger as a whole back into balance. The entries resulted in a number of errors in DGSE’s financial statements including the large overstatement of DGSE inventory by millions of dollars. Benson concealed the improper entries by manipulating inventory detail listings to improperly reflect the consigned inventory as being owned by DGSE. Benson sent these listings to DGSE’s external auditor, and misled the auditor to believe the consigned goods were owned by DGSE. Benson then knowingly signed misleading public filings by DGSE, including annual reports for the 2009 and 2010 fiscal years as well as quarterly filings. Benson also signed false management certifications that were attached to these filings.
Benson is charged with violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Sections 10(b), 13(a), and 13(b)(5) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 13a-14, 13b2-1, and 13b2-2(a) thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. DGSE is charged with violating Section 17(a)(2) of the Securities Act, Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13a-13 thereunder. DGSE and Benson each consented to injunctions against future violations of these provisions. DGSE also agreed to the appointment of an independent consultant to review the company’s accounting controls, and DGSE has taken or agreed to take remedial steps to correct its deficiencies.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information about going public and the rules and regulations affecting the use of Rule 144, Form 8K, crowdfunding, FINRA Rule 6490, Rule 506 private placement offerings and memorandums, Regulation A, Rule 504 offerings, SEC reporting requirements, SEC registration statements on Form S-1 , IPO’s, OTC Pink Sheet listings, Form 10 OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or [email protected]. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com
Gendarme & Ezat Rahimi Settle SEC Charges
Settlements have been approved resolving claims by the Securities and Exchange Commission against Gendarme Capital Corporation, its former principal, Ezat Rahimi, and its former attorney, Cassandra Armento. The SEC’s complaint had alleged that the defendants violated Section 5 of the Securities Act of 1933, by offering and selling the securities of several issuers without a filed or effective registration statement. Read More
SEC Obtains Judgment Against Inofin Management By: Brenda Hamilton Attorney
On May 28, 2014, the Securities and Exchange Commission ( “SEC”) announced that the U.S. District Court for the District of Massachusetts entered final judgment by consent against Inofin Inc.’s chief operating officer, Melissa George. Among other things, the judgment ordered George to pay a total of $177,431.69 in disgorgement of ill-gotten gains plus pre-judgment interest and a civil penalty. Read More
SEC Charges Transfer Agent, IST Shareholder Services By: Brenda Hamilton Attorney
On May 28, 2014, the SEC announced fraud charges and an emergency asset freeze against IST Shareholder Services, a transfer agent and its owner, Robert Pearson whose misappropriation scheme was discovered during an SEC examination. Read More
