Securities Industry Commentator by Bill Singer Esq
April 22, 2019
https://www.justice.gov/usao-ndia/pr/jury-convicts-social-media-entrepreneur-plot-hijack-internet-domain
At age 26, Rossi Lorathio Adams II a/k/a "Polo" seems to have had far too much time on his young hands. The kid clearly had ambition and intelligence but, whoa, was that all misdirected. While a student in 2015 at Iowa State University, Adams founded the social media company "State Snaps," which had over a million followers -- likely fueled by images and visuals of young adults engaged in what young adults do: stupid behavior, drunkenness, and nudity. Oh to be young and stupid again! Except, on second thought, now it all seems to get broadcast on social media, so, hold that thought. In any event, after about only one hour of deliberations, a jury in the United States District Court for the Northern District of Iowa convicted Adams of conspiracy to interferer with commerce by force, threats, and violence. How did someone so young and talented wind up so far across the tracks on wrong side of the law? In part, the DOJ Release explains that"
Adams' followers often used the slogan, "Do It For State!" Adams tried to purchase the Internet domain "doitforstate.com" from a Cedar Rapids resident who had registered the domain with GoDaddy.com. Between 2015 and 2017, Adams repeatedly tried to obtain "doitforstate.com", but the owner of the domain would not sell it. Adams also threatened one of the domain owner's friends with "gun emojis" after the friend used the domain to promote concerts.
In June 2017, Adams enlisted his cousin, Sherman Hopkins, Jr., to break into the domain owner's home and force him at gunpoint to transfer doitforstate.com to Adams. Hopkins was a convicted felon who lived in a homeless shelter at the time.
On June 21, 2017, Adams drove Hopkins to the domain owner's house and provided Hopkins with a demand note, which contained instructions for transferring the domain to Adams' GoDaddy account. When Hopkins entered the victim's home in Cedar Rapids, he was carrying a cellular telephone, a stolen gun, a taser, and he was wearing a hat, pantyhose on his head, and dark sunglasses on his face.
The victim was upstairs and heard Hopkins enter the home. From the top of a staircase, the victim saw Hopkins with the gun on the first floor. Hopkins shouted at the victim, who then ran into an upstairs bedroom and shut the door, leaning up against the door to stop Hopkins from entering. Hopkins went upstairs and kicked the door open.
Hopkins grabbed the victim by the arm and demanded to know where he kept his computer. When the victim told Hopkins that he kept his computer in his home office, Hopkins forcibly moved the victim to the office. Hopkins ordered the victim to turn on his computer and connect to the Internet. Hopkins pulled out Adams' demand note, which contained a series of directions on how to change an Internet domain name from the domain owner's GoDaddy account to one of Adams' GoDaddy accounts.
Hopkins put the firearm against the victim's head and ordered him to follow the directions on the demand note. Hopkins then pistol whipped the victim several times in the head. Fearing for his life, the victim quickly turned to move the gun away from his head. The victim then managed to gain control of the gun, but during the struggle, he was shot in the leg. The victim shot Hopkins multiple times in the chest. He then contacted law enforcement.
[O]LOBIA was responsible for managing the third party vendors who advertised ShareBuilder's services. Those vendors were paid on a "bounty system." ShareBuilder paid Tega Creative $40-$55 per account that was opened after a customer came to ShareBuilder via Tega Creative's advertisement. Beginning in about 2008, OLOBIA executed a scheme to inflate the numbers of accounts that were attributable to Tega Creative. OLOBIA manipulated data in ShareBuilder's computer system to vastly inflate the number of account openings attributable to Tega Creative's marketing, and then approved invoices issued by Tega Creative that were based on the inflated numbers. For example in 2007, Tega Creative was credited with about 2,000 account openings. In 2008, as a result of the fraud, Tega Creative with credited with 10,000 account openings. OLOBIA was secretly paid about one-third of the gross monthly payment from ShareBuilder to Tega Creative.The scheme was uncovered when OLOBIA left ShareBuilder, and other employees tried to reconcile the number of accounts attributed to Tega Creative. In January 2014, OLOBIA prepared a spreadsheet that tried to further the fraud and reconcile the accounts. OLOBIA provided the spreadsheet to an individual at Tega Creative who emailed it on to ShareBuilder. However, the spreadsheet did not end the company's investigation and the case was referred to law enforcement.
https://www.sec.gov/litigation/litreleases/2019/lr24456.htm
the SEC charged Kimberly Sredich with misappropriating funds from brokerage customers of a registered broker-dealer with which she was associated. The Complaint alleges that between 2014 and 2018, Sredich sold securities in at least 15 customer accounts, many of whom were elderly, and misappropriated the proceeds of the sales. Sredich allegedly forged customers' signatures and used blank letters of authorization previously signed by customers to transfer funds to a company she controlled, from which she thereafter transferred most of the misappropriated funds to a personal bank account.In a parallel action, the U.S. Attorney's Office for the Eastern District of Michigan filed criminal charges against Sredich.
https://www.sec.gov/news/press-release/2019-58
[F]rom approximately July 2015 until May 2017, Prosper excluded certain non-performing charged off loans from its calculation of annualized net returns that it reported to investors. The order finds that, as a result, Prosper reported overstated annualized net returns to more than 30,000 investors on individual account pages on Prosper's website and in emails soliciting additional investments from investors. Many investors decided to make additional investments based on the overstated annualized net returns. The order also finds that Prosper failed to identify and correct the error despite Prosper's knowledge that it no longer understood how annualized net returns were calculated and despite investor complaints about the calculation.