The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
May 8, 2018
Two Cryptocurrency Firms Hit With Emergency Orders (TSSB Press Release)
https://www.ssb.texas.gov/news-publications/two-cryptocurrency-firms-hit-emergency-orders
The Texas State Securities Board entered emergency orders against Bitcoin Trading & Cloud Mining Ltd. also known as BTCRUSH, and Forex EA & Bitcoin Investment LLC, which are described as unregistered promoters who are fraudulently offering high-return investments in programs tied to cryptocurrencies. The TSSB Press Release alleges that BTCRUSH, whose principals list an address in London, is soliciting Texas investors with the promise of huge returns from the mining of cryptocurrencies at three massive computing centers featured in videos on the company's website. The TSSB Press Release further asserts that BTCRUSH claims an investment in its mining investment program has been paying 4.1% interest daily on a lifetime contract since going live on March 8, 2018. According to the order, that means a $10,000 investment would return $410 per day and $149,650 over one year. READ the FULL TEXT TSSB ORDERS BTCRUSH and Forex EA
FINRA Orders Partial Restitution In Activity Letter Settlement (BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/3961/finra-activity-letter/
http://www.brokeandbroker.com/3961/finra-activity-letter/
Imagine that a contractor installed a state-of-the-art sprinkler system but never connected it to any water source. Now start a fire. With that image in mind, consider today's BrokeAndBroker.com Blog, which discusses a recent FINRA regulatory settlement involving allegations that a member firm botched its use of so-called activity letters. It's a fairly compelling effort by FINRA but for the fact that the published settlement agreement raises a few questions that aren't answered.
Two Long Island Men Sentenced to 6 Years in Prison for Participating in Investment Fraud Schemes (DOJ Press Release)
https://www.justice.gov/usao-ct/pr/two-long-island-men-sentenced-6-years-prison-participating-investment-fraud-schemes
Thomas Heaphy and Brian Ferraioli pled guilty in the United States District Court for the District of Connecticut to one count of conspiracy to commit mail and wire fraud and one count of tax evasion related to a stock pump and dump scheme, and one count of conspiracy to commit mail and wire fraud related to an investment scheme involving the Water Club Holding, Inc. and Waters Club Worldwide, Inc.. Heaphy was ordered to pay $6,738,539 in restitution and Ferraioli was ordered to pay $6,896,927 restitution, and both were sentenced to 72 months of imprisonment and three years of supervised release. Previously Corey Brinson pled guilty to one count of engaging in a monetary transaction in property derived from specified unlawful activity and was sentenced to 36 months of imprisonment.
Massachusetts Hedge Fund Manager, Defendant in SEC Action, Sentenced to Six Years' Imprisonment in Parallel Criminal Case (SEC Litigation Release No. 24135)
https://www.sec.gov/litigation/litreleases/2018/lr24135.htm
https://www.sec.gov/litigation/litreleases/2018/lr24135.htm
Former hedge fund manager Yasuna Murakami pled guilty to wire fraud and was sentenced in the United States District Court for the District of Massachusetts to 6 years in prison and ordered to pay $10,520,634 in restitution for defrauding hedge fund investors. The criminal case arises from the same conduct alleged in an action the SEC filed against Murakami in 2017. Murakami admitted to diverting millions of dollars of investor funds to business and personal accounts that he controlled, and using the money to pay for such personal expenses as a luxury sports car, international travel, payments to personal credit cards and high-end department stores, and to place investments in his own name and make Ponzi scheme-like payments to investors who requested redemption.
Statement By Attorney General Eric T. Schneiderman
https://ag.ny.gov/press-release/statement-attorney-general-eric-t-schneiderman
https://ag.ny.gov/press-release/statement-attorney-general-eric-t-schneiderman
"It's been my great honor and privilege to serve as Attorney General for the people of the State of New York. In the last several hours, serious allegations, which I strongly contest, have been made against me. While these allegations are unrelated to my professional conduct or the operations of the office, they will effectively prevent me from leading the office's work at this critical time. I therefore resign my office, effective at the close of business on May 8, 2018."