Securities Industry Commentator by Bill Singer Esq

[A]dams and Flanders falsely stated to one of the investors that they had each invested in the film and would not receive any of the funds being raised until bank financing was obtained. The complaint further alleges that Adams misrepresented how investor proceeds had previously been spent and fraudulently stated that the money the investor had provided would be used exclusively to pay attorneys. The complaint alleges that, in reality, Adams and Flanders received $21,062 and $18,500, respectively, from the $60,000 investment, and that only $20,000 was paid to an attorney.

The complaint further alleges that Adams and Flanders also made misrepresentations to the second investor, who said he would invest $100,000 only if $200,000 was first raised elsewhere. According to the complaint, Flanders forwarded the investor two fabricated emails Adams had prepared containing a fictitious wire transfer confirmation and a forged signature page, to create the false appearance that $200,000 had been raised from another investor. The complaint alleges that Adams and Flanders personally received $29,000 and $10,000, respectively, from the $100,000 investment.

Adams previously pleaded guilty to tax fraud and larceny in 2012, was ordered to pay nearly $4.4 million in restitution to the State of Massachusetts, and served a twenty-one month prison term.

Meet the ‘Montauk Grifter' and his ever-changing disguises (New York Post by Kevin Dugan)
https://nypost.com/2019/02/26/meet-the-montauk-grifter-and-his-ever-changing-disguises/
A fabulous article! A wonderful read. Who is Dan . . . and what's his last name, his "real" last name? Well, that's not easy to answer as the article teases:

Dan Nadler is really Dan Kaufman, a serial fraudster dubbed the "Montauk Grifter" who has gone by other assumed names, including Dan Kaye, Dan Eric and Dan Katze. He was recently sentenced to 18 months behind bars for stealing property from a rehab facility and is on parole after an early release. The architectural company he claims to have started, The Box Labs, appeared to be little more than an Instagram page, and there are no architects matching his description who are registered under his real or his assumed name.

This was just the latest con in a decade full of them. From 2006 to 2016, he racked up at least nine liens and judgments against him for more than $158,000 in debts, stemming from soured business to unpaid child support, according to public records. He skimmed thousands of dollars from restaurant customers, filed phony invoices, talked his way into the C-suite of a technology company, oversaw construction sites in Manhattan and Queens despite apparently scant experience, and was accused by women of lying about his sexual history.

Defendants Charged With Multimillion Dollar Investment Fraud (DOJ Release)
https://www.justice.gov/usao-me/pr/defendants-charged-multimillion-dollar-investment-fraud
In an Indictment filed in the United States District Court for the District of Maine, Michael A. Liberty and Paul E. Hess were each charged with one count of conspiracy to commit wire fraud, four counts of wire fraud and one count of securities fraud.  In addition, Liberty was charged with one count of conspiracy to commit money laundering and three counts of money laundering.  As set forth in part in the DOJ Release:

[B]eginning in 2010, Liberty and Hess solicited investments in Mozido, a privately held financial technology start-up company that offered users an ability to make payments using their mobile phones.  Liberty and Hess allegedly raised millions of dollars from investors telling them, among other things, that their money would be used to fund Mozido's business operations and that Hess was not being paid to raise the money.  The indictment alleges that a substantial amount of the money did not go to Mozido, that a portion of the money was diverted to pay Liberty's personal expenses, and that Hess received commissions and other payments in return for the money he raised from investors.

Retrospective Rule Review: FINRA Requests Comment on the Effectiveness and Efficiency of Its Rule on Business Continuity Plans and Emergency Contact Information (FINRA Regulatory Notice 19-06)
http://www.finra.org/sites/default/files/notice_doc_file_ref/Regulatory-Notice-19-06.pdf
FINRA Rule 4370: Business Continuity Plans and Emergency Contact Information addresses a member's need to maintain a written business continuity plan setting forth effective procedures to be used during an emergency or significant business disruption. In what the self-regulatory-organization characterizes as a "retrospective" review of Rule 4370, FINRA poses the following for which it seeks comment:

1. Has the rule effectively addressed the problem(s) it was intended to mitigate? To what extent has the original purposes of and need for the rule been affected by subsequent changes to the risk environment, the markets, the delivery of financial services, the applicable regulatory framework or other considerations? Are there alternative ways to achieve the goals of the rule that FINRA should consider? 

2. What has been your experience with implementation of the rule, including any ambiguities in the rule or challenges to comply with it? 

3. What have been the economic impacts, including costs and benefits, of creating, maintaining or updating a business continuity plan? To what extent do the costs and benefits have a disproportionate impact on firms based on size and business model? Has the rule led to any negative unintended consequences? 

4. Can FINRA make the rule, guidance or attendant administrative processes more efficient and effective? 

5. Have you ever needed to activate your BCP and if so, was it effective? Please describe the circumstances that led to the activation of your BCP. 

6. How do you determine what may constitute a significant business disruption? To what extent do you address specific types of significant business disruptions in your BCP (e.g., cyber events, terrorist attacks, pandemics or natural disasters)? 

7. What other rules, if any, conflict with or get in the way of business continuity planning? 

8. To what degree does your business or BCP rely on vendors or other external providers? Would the rule be more effective if it addressed expectations around additional diligence into vendor resiliency?

• Securities Industry Commentator
• Bill Singer