The Wall Street Legal & Regulatory Feed

Securities Industry Commentator by Bill Singer Esq

July 13, 2018

PUBLIC NOTICE to all FINRA Candidates for Board of Governors. In keeping with its past policy, the BrokeAndBroker.com Blog offers free "Guest Blog" posting to all candidates. Please contact publisher Bill Singer, Esq. at rrbdlawyer@gmail.com to arrange for the posting of your statement of candidacy and links to your election materials.
See these past postings for guidance: 
https://www.cftc.gov/PressRoom/PressReleases/7753-18
In awarding its fifth and largest award to date under its Whistleblower Program, CFTC awarded about $30 million to a whistleblower  According to "JPMorgan Whistle-Blower Gets Record $30 Million From CFTC" (Bloomberg.com by Neil Weinberg and Matt Robinson at https://www.bloomberg.com/news/articles/2018-07-12/jpmorgan-whistle-blower-said-to-get-record-30-million-from-cftc) the "award was the result of information that helped the agency sanction JPMorgan Chase & Co. for failing to properly inform some wealthy clients about conflicts of interest behind its investment recommendations. . ." READ FULL TEXT CFTC AWARD http://whistleblower-dev.ctacdev.com/sites/whistleblower/files/2018-07/18-WB-02%20-%20Public%20Web%20Version%20-%20Signed.pdf

https://www.sec.gov/litigation/litreleases/2018/lr24198.htm
Ryan Gilbertson was convicted in the United States District Court for the District of Minnesota on 21 counts of wire fraud, securities fraud, and conspiracy to commit securities fraud; and Douglas Hoskins,was convicted on 6 counts of wire fraud, securities fraud, and conspiracy to commit securities fraud. The SEC had alleged, in part, that Gilbertson enlisted friends and associates including Hoskins to choreograph extensive sales and purchases of Dakota Plains stock, which rose from 30 cents to more than $12 per share during a 20-day period.  The allegedly inflated stock price obligated Dakota Plains to make bonus payments totaling $32,851,800 to Gilbertson and others. READ the FULL TEXT SEC Complaint https://www.sec.gov/litigation/litreleases/2018/lr24198.htm

5% Solution In FINRA Expungement Arbitration (BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/4076/finra-expungement-/
In today's BrokeAndBroker.com Blog, we feature a FINRA arbitration in which a public customer seeks at least $2 million in damages against Raymond James. As is often the case in such sales-practices disputes, unnamed registered representatives are required to disclose on their industry records the customer's allegations. If the customers prevail with their claims, then the registered reps sort of get what's coming to them. If the customers fail, the reps are forced to pursue FINRA's time consuming and expensive expungement process. As today's case demonstrates, FINRA's version of mandatory customer and intra-industry arbitration is often unfair and seems little more than a Mickey Mouse profit-center for the self-regulatory-organization.

Emergency Action Targets Promoters of Crypto-Mining Investments (TSSB Press Release)
https://www.ssb.texas.gov/news-publications/emergency-action-targets-promoters-crypto-mining-investments
The Texas State Securities Board issued an Emergency Cease and Desist Order naming the following companies allegedly controlled by Darren Olayan::

Mintage Mining LLC, which is illegally and fraudulently issuing and offering two different investments in the mining of cryptocurrencies;
Symatri LLC, which issued a new cryptocurrency called Kala and, with Mintage Mining, is offering investors the opportunity to own and possess pre-configured computer hardware to mine Kala;
NUI Social, a multi-level marketing company that purports to have more than 300,000 members in 140 countries. NUI recruits individuals for the cryptocurrency investments, with some of its "members" eligible to earn commissions for the people they recruit. 

The TSSB Order also names Wyatt McCullough, who is allegedly affiliated with NUI Social, and William Douglas Whetsell. TSSB alleges that McCullough and Whetsell are publishing advertisements targeting Texas residents and claiming that Mintage can generate up to 250% annual returns  by successfully mining cryptocurrencies. READ the FULL TEXT Cease and Desist Order
https://www.ssb.texas.gov/sites/default/files/ENF-18-CDO-1765.pdf

SEC Charges Oil and Gas Company and Top Finance Executives with Accounting Fraud (SEC Litigation Release No. 24195)
https://www.sec.gov/litigation/litreleases/2018/lr24195.htm
The SEC filed a Complaint in the United States District Court for the Southern District of New York charging:
1) Penn West Petroleum Ltd., d/b/a Obsidian Energy Ltd., Todd H. Takeyasu, Jeffery A. Curran, and Waldemar Grab with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder;
2) Penn West with violating Section 17(a) of the Securities Act of 1933, Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), and Exchange Act Rules 12b-20, 13a-1, and 13a-16;
3) Takeyasu, Curran, and Grab with violating Securities Act Sections 17(a)(1) and 17(a)(3), Exchange Act Section 13(b)(5), and Exchange Act Rules 13b2-1 and 13b2-2, and with aiding and abetting Penn West's violations of Securities Act Section 17(a), Exchange Act Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B), and Exchange Act Rules 10b-5, 12b-20, 13a-1, and 13a-16; and 
4) Takeyasu with violating Exchange Act Section 13a-14 and Section 304(a) of the Sarbanes-Oxley Act of 2002. 

The Complaint alleges that Penn West's former CFO Takeyasu, former vice president of accounting and reporting Curran, and former operations controller Grab manipulated the company's operating expenses in order to lower the publicly reported cost of oil extraction and processing. The SEC seeks permanent injunctions and monetary relief against all the defendants, officer-and-director bars from Takeyasu and Curran, and a clawback of incentive-based compensation awarded to Takeyasu. Without admitting or denying the allegations or findings, Grab has agreed to a settlement including permanent injunctions and an officer-and-director bar, and also a permanent suspension from appearing and practicing before the SEC as an accountant.

CFTC Orders Commodity Trading Firm to Pay $3.4 Million Penalty for Attempted Manipulation of Agricultural Markets (CFTC Press Release 7754-18)
https://www.cftc.gov/PressRoom/PressReleases/7754-18?utm_source=govdelivery
CFTC issued an Order filing and settling charges against Lansing Trade Group, LLC for its attempted manipulation of the price of certain wheat futures and options contracts that were traded on the Chicago Board of Trade (CBOT) and for aiding and abetting the attempted manipulation of the cash price for Columbus Corn. Lansing will pay a $3.4 million civil monetary penalty, undertake remedial measures, and cease and desist from further violations of the CEA and CFTC Regulations, as charged.
Separately, CME Group Inc. issued a Notice of Disciplinary Action (NDA) in which Lansing agreed to pay a fine of $3.15 million arising out of the attempted manipulation of the wheat futures contracts that is the subject of the CFTC's Order.  
READ FULL TEXT CFTC Order 
https://www.cftc.gov/sites/default/files/2018-07/enflansingtradegroupllcorder071218.pdf

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