The Wall Street Legal & Regulatory Feed
Securities Industry Commentator by Bill Singer Esq
August 9, 2018
Congressman Christopher Collins And Others Charged In Manhattan Federal Court With Insider Trading And Lying To Federal Law Enforcement Agents (DOJ Press Release)
https://www.justice.gov/usao-sdny/pr/congressman-christopher-collins-and-others-charged-manhattan-federal-court-insider
https://www.justice.gov/usao-sdny/pr/congressman-christopher-collins-and-others-charged-manhattan-federal-court-insider
New York Congressmen Christopher Collins, his son Cameron Collins, and Stephen Zarsky (the father of Cameron's fiancee) were indicted in the United States District Court for the Southern District of New York with conspiracy, securities fraud, wire fraud, and making false statements to the FBI.for participating in a scheme to commit insider trading relating to securities of Innate Immunotherapeutics, an Australian biotechnology company on whose Board of Directors Congressman Collins served. Allegedly, Cameron Collins, Zarsky and others avoided about $768.000 in losses by trading on the alleged insider information. Separately, the SEC filed a civil action against the three defendants.
READ the FULL TEXT Indictment https://www.justice.gov/usao-sdny/press-release/file/1085991/download
READ the FULL TEXT SEC Complaint https://www.sec.gov/litigation/complaints/2018/comp-pr2018-151.pdf
Biotechnology Executive Convicted Of Defrauding Investors And Making False Statements To Federal Law Enforcement (DOJ Press Release)
https://www.justice.gov/usao-sdny/pr/biotechnology-executive-convicted-defrauding-investors-and-making-false-statements
https://www.justice.gov/usao-sdny/pr/biotechnology-executive-convicted-defrauding-investors-and-making-false-statements
Former Nuclea Biotechnologies President Patrick Muraca was found guilty in the United States District Court for the Southern District of New York on one count each of making false statements to federal law enforcement and wire fraud. Between 2016 and July 2017, Muraca solicited and obtained over $1 million from investors by making false and misleading representations that the funds would be used to expand two businesses that he had founded: NanoMolecularDX LLC ("NMDX") and MetaboRx LLC ("Metabo"). Muraca misappropriated hundreds of thousands of dollars for personal expenses such as rent, utilities, mortgage payments, cigars, tattoos, and food distributor expenses related to the operation of his fiancee's restaurant. During the FBI and US Attorney's investigations, Muraca made a material false statement about his use of investor funds.
Where There's A Will, FINRA Says No Way! (BrokeAndBroker.com Blog)
http://www.brokeandbroker.com/4111/finra-beneficiary-awc/
http://www.brokeandbroker.com/4111/finra-beneficiary-awc/
Where there's a will, there's a way. That's a nice saying. On the other hand, where there's a Will, you will likely have some folks saying "no way" when they learn that they've been cut out as a beneficiary or some questionable character has been cut in. Nothing like death, families, and cash to make a lot of work for lawyers. In today's featured FINRA regulatory settlement, we got an elderly client and a stockbroker who became a beneficiary of the client's estate. Wall Street's got rules and regulations about that type of a relationship. Wall Street's got in-house policies about that stuff too. The question is whether Wall Street has the "will" to do anything effective when it comes to dealing with circumstances where elderly clients designate their stockbroker as a beneficiary.
South Texas Investment Promoter Gets 25-Year Sentence for Multi-Million-Dollar Fraud (TSSB Press Release)
https://www.ssb.texas.gov/news-publications/south-texas-investment-promoter-gets-25-year-sentence-multi-million-dollar-fraud
https://www.ssb.texas.gov/news-publications/south-texas-investment-promoter-gets-25-year-sentence-multi-million-dollar-fraud
After pleading guilty to first-degree felony offenses of theft, money laundering, and misapplication of fiduciary property, former licensed insurance agent Gabriel Claudio Jr. was sentenced to 25 years in Texas state prison and ordered to pay $2,795,254 in restitution. The TSSB's Petition for Notice of Seizure and Intended Forfeiture alleged that Claudio spent the money he stole from investors to gamble in Las Vegas ($300,000); make child support payments ($193,000); pay private school tuition ($156,655); pay home expenses ($169,211); buy jewelry ($151,646); make cash withdrawals of $656,394; and to pay off the mortgage on a house in Portland, in San Patricio County, and buy two Mercedes-Benz automobiles. In response to the Petition, Claudio and his wife, Briana Claudio, signing a judgment to forfeit the assets they acquired with investor funds. Between 2010 and 2016, Claudio converted from a couple who were his clients, 19 checks made payable to him totaling $2,393,567 that were to be invested in indexed annuities but never got paid to the designated insurance company..From 2009 to 2013, Claudio sold fraudulent investments to at least nine victims, totaling $600,000. READ the FULL TEXT Petition and Notice of Seizure
https://www.ssb.texas.gov/sites/default/files/Claudio_Plaintiff%27s%20Original%20Petition%20and%20Notice%20of%20Seizure.pdf
SEC Charges Fixed Income Trader with Entering Fictitious Sales to Avoid Brokerage Firm's Inventory Limits (SEC Litigation Release No. 24229)
https://www.sec.gov/litigation/litreleases/2018/lr24229.htm
In a Complaint filed in the United States District Court for the Northern District of Georgia, the SEC alleged that former J.P. Turner & Company, LLC trader Salvadore D. Palermo had entered fictitious sales of market-linked certificates of deposit (MLCDs) in order to avoid his firm's inventory limitations for the fixed income products. Allegedly, Palermo paid above-market prices to acquire MLCDs from J.P. Turner brokerage customers, and then held the CDs in inventory. Knowing that the counterparty never agreed to buy the MLCDs and that each trade would ultimately be cancelled, Palermo allegedly entered dozens of fictitious trades over a seven-month period in order to give the impression that the MLCDs had been sold from inventory. READ the FULL TEXT SEC Complaint https://www.sec.gov/litigation/complaints/2018/comp24229.pdf
Racine Woman Indicted for Defrauding Beneficiaries of Estates Being Administered by her Father's Law Firm (DOJ Press Release)
https://www.justice.gov/usao-edwi/pr/racine-woman-indicted-defrauding-beneficiaries-estates-being-administered-her-fathers
https://www.justice.gov/usao-edwi/pr/racine-woman-indicted-defrauding-beneficiaries-estates-being-administered-her-fathers
Kathleen A. Fetek was indicted in the United States District Court for the Eastern District of Wisconsin following charges that she obtained over $775,000 while she was employed at Fetek Law Offices, S.C., (her's father's law firm), as a result of writing checks to herself from the firm's account; cashing the checks at banks, liquor stores, and other locations; and preparing and mailing materially false distribution summaries and account documentation to beneficiaries of estates handled by the law firm.