The Wall Street Legal & Regulatory Feed

Securities Industry Commentator by Bill Singer Esq

February 26, 2018

L.A. Man Convicted of ATM ‘Shoulder Surfing' that Allowed Him to Withdraw Cash after Bank Customers Left ATMs (DOJ Press Release) https://www.justice.gov/usao-cdca/pr/la-man-convicted-atm-shoulder-surfing-allowed-him-withdraw-cash-after-bank-customers
Following a two-day bench trial, Daniel Jermaine Usher was found guilty of three counts of aggravated identity theft for "shoulder surfing"as a means of obtaining PIN numbers of elderly Bank of America ATM customers in Los Angeles and Orange County. When victims left the ATMs without concluding their sessions, Usher entered their PIN and fraudulently withdraw cash. Previously, Usher pleaded guilty last month to five counts of bank fraud and admitted that he illegally withdrew cash from Bank of America ATMs.

Wells Fargo Sustains Stunning Promissory Note Loss (BrokeAndBroker.com Blog) http://www.brokeandbroker.com/3841/wells-fargo-efl/ To those unfamiliar with Wall Street litigation, today's featured FINRA arbitration and court order may seem unimportant. The dispute at issue is a garden variety promissory note lawsuit pitting a former employee against Wells Fargo Advisors and yet again involving an allegation of an unpaid balance due on the employee forgivable loan. In more dry terms, we seem to have yet another EFL case. For those more familiar with Wall Street's litigation docket, we have a very important case that highlights a dramatic attempt by one of FINRA's large member firms to gain an advantage over an employee and to then to further exploit that leverage via a costly lawsuit. Moreover, today's arbitration warns future industry employees to pay very, very careful attention to whether their settlements or lawsuits against their former employers deem the unpaid EFL balances to constitute the cancellation of a debt or unpaid income. 

Roy Sahachaisere Was Convicted at Trial of Fraudulently Inflating the Value of Penny Stocks (DOJ Press Release) https://www.justice.gov/usao-edny/pr/stock-promoter-sentenced-27-months-prison-his-role-international-pump-and-dump-scheme
After more than five weeks of federal trial, Songkram Roy Sahachaisere was convicted of conspiring to commit securities fraud, conspiring to commit wire fraud, two counts of wire fraud and one count of securities fraud. Sahachaisere was sentenced to 27 months' imprisonment for participating in a multi-million dollar international market manipulation scheme.  As set forth in part in the DOJ Press Release:

[S]ahachaisere's role in the scheme was to arrange promoters to "pump" the stocks to potential victims.  Sahachaisere also conspired with other members of the conspiracy to artificially affect the trading price and volume of stocks so that they appeared legitimate to investors.  In addition, the conspiracy used brokerage houses to manipulate transfers of shares, effectuating matched and wash trades in their targeted securities.  Six co-defendants of Sahachaisere were previously convicted and sentenced.  Two co-defendants are awaiting sentencing.

New York Man Pleads Guilty to Conspiracy Charge Related to Investment Fraud Scheme (DOJ Press Release) https://www.justice.gov/usao-ct/pr/new-york-man-pleads-guilty-conspiracy-charge-related-investment-fraud-scheme
Thomas Heaphy pleaded guilty  to one count of conspiracy to commit mail and wire fraud in connection with a scheme from about August 2016 to February 2017 to promote and sell securities in advance of an initial public offering of Waters Club Worldwide, Inc. and Waters Club Holdings, Inc., which provided yacht charter services to customers. . Heaphy and his co-conspirators represented that Waters Club intended to form a membership-based "time share" club with a fleet of yachts that members jointly owned and could use for yachting vacations. At least 12 investors paid at least $1,289,500 for shares of Waters Club stock, no fewer than six of those victims had been victims in an earlier pump and dump scheme involving Heaphy.

Opening Remarks at the "SEC Speaks" Conference by Chairman Jay Clayton https://www.sec.gov/news/speech/clayton-opening-remarks-sec-speaks

Remarks at SEC Speaks: Increasing Product Complexity: What's at Stake? by Commissioner Kara M. Stein  https://www.sec.gov/news/speech/stein-sec-speaks-increasing-product-complexity

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