The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
April 27, 2018
(DOJ Press Release)
https://www.justice.gov/usao-sdfl/pr/south-florida-securities-broker-dealer-charged-conspiracy-unlawfully-sell-unregistered
Delaney Equity Group LLC was charged by a criminal information with one count of conspiracy to unlawfully sell unregistered securities. As set forth in part in the DOJ Press Release:
https://www.justice.gov/usao-sdfl/pr/south-florida-securities-broker-dealer-charged-conspiracy-unlawfully-sell-unregistered
Delaney Equity Group LLC was charged by a criminal information with one count of conspiracy to unlawfully sell unregistered securities. As set forth in part in the DOJ Press Release:
According to court documents, including the charging information, from October 2009 through at least June 2013, Delaney Equity Group LLC ("Delaney Equity"), through certain employees including Ian C. Kass, participated in a conspiracy to sell shares of bogus microcap companies, knowing that the companies had been created using nominee officers and were secretly controlled by shell principals Steven Sanders, Daniel McKelvey, and Alvin S. Mirman. The shell principals would fraudulently create public companies, known as issuers, by filing documents with the SEC that falsely described the companies and their share ownership. These documents would indicate that the companies were controlled by a nominee, or straw chief executive officer (CEO). The straw CEO would be listed as the owner of the control block, or restricted shares, but in reality the companies were controlled by the principals. The principals would also create documents with the names of various shareholders for each company, to make it appear that these shares were owned by persons unaffiliated with the company. These shares would later be classified as unrestricted or "free trading." Thereafter, the principals would sell the companies to criminal actors who would secretly obtain the control shares and the purported "free trading" shares, without disclosure to the U.S. Securities and Exchange Commission (SEC) or the investing public. This would allow the buyers to engage in stock manipulation schemes using the purported "free trading" shares.According to the allegations in the information, Delaney Equity was a securities broker-dealer that was registered with the SEC and was a market maker for penny stocks in the over-the-counter securities markets. Acting at the direction of the shell principals, Delaney Equity sponsored nine fraudulent shell companies for electronic trading, and facilitated the sale of shares of these bogus entities to criminal actors. According to court documents, Delaney Equity utilized fraudulent paperwork to deposit shares into broker accounts in the names of the fraud principals, including Steven Sanders, Daniel McKelvey, and Alvin S. Mirman. Delaney Equity also obtained authorization from the Financial Industry Regulatory Authority (FINRA) for shares of the companies to be electronically traded. Delaney Equity also opened brokerage accounts for the shell principals and deposited shares of the bogus entities into these accounts, later selling the shares to the investing public knowing that the companies were sham entities with nominee officers. These activities, according to allegations in the information, facilitated the unlawful sale of securities that should have been classified as restricted, facilitating the securities fraud scheme.Ten other defendants have been convicted in connection with the Shell Factory Fraud investigation: John Ahearn and Andrew Wilson, Case No. 17-20883-CR-KMW; Yelena Furman, Case No. 17-20713-CR-CMA; David Lubin, Case No. 17-20508-CR-MGC; Sheldon Rose and Ian Kass, Case No. 16-20706-CR-JEM; Steven Sanders and Alvin S. Mirman, Case No. 16-20572-CR-CMA; and, Daniel McKelvey and Jeffrey Lamson, Case No. 16-20546-CR-RNS.
(BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/3945/finra-wells-fargo/
http://www.brokeandbroker.com/3945/finra-wells-fargo/
No one has ever called BrokeAndBroker.com Blog's publisher Bill Singer a snarky bastard when it comes to his shots against the Financial Industry Regulatory Authority. On second thought, to be fair, a lot of folks call Bill a snarky bastard when it comes to his shots against FINRA. You ask Bill, he's just doing his job as a gadfly trying to protect the investing public and the industry. You ask FINRA, they probably won't comment but behind closed doors they continue to throw darts at a board with Bill's handsome visage peering back at them. For those of you undecided about Bill's snarkiness, consider today's article about Wells Fargo, a disgruntled customer of that firm, and FINRA's seemingly hands-off approach to regulating the market in a fair and balanced fashion.
In anticipation of the institution of proceedings by the SEC but without admitting or denying the findings, Andy Z. Fan submitted an Offer of Settlement, which the federal regulator accepted. In the Matter of Andy Z. Fan, Respondent (Order Instituting Administrative And Cease-And-Desist Proceedings, Making Findings, Imposing And A Cease-And-Desist Order; and Revoking Registration of Securities; Findings, Imposing And A Cease-And-Desist Order; and Revoking Registration of Securities; ' 33 Act Rel. No. 10487; '34 Act Rel. No. 83107; Admin. Proc. File No. 3-18451/ April 25, 20180 (the "OIP"). https://www.sec.gov/litigation/admin/2018/33-10487.pdf
The SEC ordered that Respondent Cease-and-Desist from further violations of the Securities Act and the Exchange Act, pay $140,000 civl money penalty, and is:
The SEC ordered that Respondent Cease-and-Desist from further violations of the Securities Act and the Exchange Act, pay $140,000 civl money penalty, and is:
As set forth in the "Summary" of the OIP:prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act; andbarred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.
1. These proceedings arise out of Fan's purchase of the securities of at least four undisclosed "blank check" companies as defined in Rule 419 under the Securities Act, 17 C.F.R. § 230.419 (the "Blank Check Companies") with the intent to use the Blank Check Companies for future reverse mergers. Fan used nominees to conceal, and otherwise failed to disclose, his beneficial ownership of essentially all the issued securities of the Blank Check Companies. Fan also authorized false press releases and Commission filings with respect to purported business operations and engaged in manipulative trading in the public markets in order to maintain the Blank Check Companies as viable candidates for future reverse mergers.
In anticipation of the institution of proceedings by the SEC but without admitting or denying the findings, Chinamerica Andy Movie Entertainment Media, Company submitted an Offer of Settlement, which the federal regulator accepted. In the Matter of AF Ocean Investment Management Company, Respondent (Order Instituting Administrative And Cease-And-Desist Proceedings, Making Findings, Imposing And A Cease-And-Desist Order; and Revoking Registration of Securities; Findings, Imposing And A Cease-And-Desist Order; and Revoking Registration of Securities; ' 33 Act Rel. No. 10488; '34 Act Rel. No. 83108; Admin. Proc. File No. 3-18452/ April 25, 20180 (the "OIP"). https://www.sec.gov/litigation/admin/2018/33-10488.pdf
The SEC ordered that Respondent Cease-and-Desist from further violations of the Securities Act and the Exchange Act, and revoked the company's registration.
As set forth in the "Summary" of the OIP:
The SEC ordered that Respondent Cease-and-Desist from further violations of the Securities Act and the Exchange Act, and revoked the company's registration.
As set forth in the "Summary" of the OIP:
These proceedings arise out of AF Ocean's status as an undisclosed "blank check" company as defined in Rule 419 under the Securities Act, 17 C.F.R. § 230.419, by which its principal, Andy Z. Fan, acquired virtually all of the shares of a public company for a future reverse merger. AF periodic reports with the Commission failed to disclose the beneficial ownership of Fan over essentially all its issued securities. AF Ocean also issued press releases and filed periodicOcean'sreports misrepresenting that it had purported business operations. AF Ocean has since become delinquent in its filing obligations with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the period ended June 30, 2016.
In anticipation of the institution of proceedings by the SEC but without admitting or denying the findings, Chinamerica Andy Movie Entertainment Media, Company submitted an Offer of Settlement, which the federal regulator accepted. In the Matter of Chinamerica Andy Movie Entertainment Media, Company, Respondent (Order Instituting Administrative And Cease-And-Desist Proceedings, Making Findings, Imposing And A Cease-And-Desist Order; and Revoking Registration of Securities; Findings, Imposing And A Cease-And-Desist Order; and Revoking Registration of Securities; ' 33 Act Rel. No. 10489; '34 Act Rel. No. 83109; Admin. Proc. File No. 3-18453/ April 25, 20180 (the "OIP"). https://www.sec.gov/litigation/admin/2018/33-10489.pdf
The SEC ordered that Respondent Cease-and-Desist from further violations of the Securities Act and the Exchange Act, and revoked the company's registration. As set forth in the "Summary" of the OIP:
The SEC ordered that Respondent Cease-and-Desist from further violations of the Securities Act and the Exchange Act, and revoked the company's registration. As set forth in the "Summary" of the OIP:
These proceedings arise out of ChinAmerica's status as an undisclosed "blank check" company as defined in Rule 419 under the Securities Act, 17 C.F.R. § 230.419, by which its principal, Andy Z. Fan, owned virtually all of the shares of a public company for a future reverse merger. ChinAmerica's periodic reports with the Commission failed to disclose the beneficial ownership of Fan over essentially all its issued securities. ChinAmerica also issued press releases and filed periodic reports misrepresenting that it had purported business operations. ChinAmerica has since become delinquent in its filing obligations with the Commission, having not filed any periodic reports since it filed a Form 10-Q for the period ended June 30, 2016.
Testimony before the Financial Services and General Government Subcommittee of the House Committee on Appropriations
https://www.sec.gov/news/testimony/testimony-financial-services-and-general-government-subcommittee-house-committee
Testimony on "Oversight of the SEC's Division of Corporation Finance" by William Hinman, Director, Division of Corporation Finance
https://www.sec.gov/news/testimony/testimony-oversight-secs-division-corporation-finance
https://www.sec.gov/news/testimony/testimony-oversight-secs-division-corporation-finance
President of Florida-Based Financial Firm Sentenced to 10 Years in Prison for Role in $179 Million Sham Loan Scheme
https://www.justice.gov/usao-ndil/pr/president-florida-based-financial-firm-sentenced-10-years-prison-role-179-million-sham
https://www.justice.gov/usao-ndil/pr/president-florida-based-financial-firm-sentenced-10-years-prison-role-179-million-sham
Timothy G. Fisher, former President and Chief Operating Oficer of First Farmers Financial LLC was sentenced in the United States District Court for the Northern District of Illinois to ten years in prison and Nikesh A. Patel, former Chief Executive Office was sentenced o 25 years in prison.
for their role in a fraud involving the sale of 26 non-existent loans to a Milwaukee investment firm through the deception of creating the appearance that the loans were issued to borrowers in Florida and Georgia and had been guaranteed, in part, by the federal government. The Milwaukee investment firm, had purchased the loans as an investment vehicle for its clients, including community banks, retirement plans, municipalities, and subdivisions in Illinois.