Securities Industry Commentator by Bill Singer Esq

Cannabis Science Case Smokes Definition of Brokerage Customer (BrokeAndBroker.com Blog)

"Wall Street's Traders Are On The Decline -- Here's What's Hurting The Lucrative Profession" (CNBC.com)

Mike Bloomberg Announces Plan to Reform Wall Street and Put the Financial System to Work for Every American (MikeBloomberg.com Release)

Biotech Company CEO Sentenced for Securities Fraud and Obstruction (DOJ Release)

Employee At Mortgage Company Sentenced To 46 Months In Prison For Illegally Accessing Computer To Steal $2 Million (DOJ Release)

SEC Charges Real Estate Company and Executives With Defrauding Retail Investors, Obtains Emergency Relief (SEC Release)

Mike's plan has three key pillars that undo the damage Donald Trump has done, strengthen the economy, and ensure the financial system works for all: 1) reinstate Obama Administration policies to rein in Wall Street and expand them, including toughening the Volcker Rule; 2) restoring consumer protections, including restoring and strengthening the Consumer Financial Protection Bureau (CFPB), established under Senator Elizabeth Warren's leadership; and 3) driving innovation in the financial system to address the needs of all Americans.

Merge Fannie Mae and Freddie Mac into a single government-owned mortgage guarantor to ensure taxpayers are properly compensated for loan guarantees and low-income households are well-served.

. . . 

Restore critical consumer protections overturned by the Trump administration - including rules that rein in payday lending, ensuring investment advice prioritizes people's best interests, and preserving customers' right to sue financial institutions - and strengthen the Consumer Financial Protection Bureau by ensuring funding and expanding its jurisdiction to include auto lending and credit reporting.

. . .

Defend consumers' rights by eliminating exorbitant overdraft fees, curbing abusive debt-collection practices, and making credit reporting companies more responsible for the personal data they manage.

. . .

Address the country's overwhelming student debt burden by automatically enrolling borrowers in income-based repayment plans, capping payments at 5% of disposable income, making debts easier to discharge for the most impacted students, eliminating wage garnishment, and reducing fees.

. . .

Introduce a tax of 0.1% on all financial transactions to raise revenue needed to address wealth inequality, and support other measures - such as a speed limit on trading - to curb predatory behavior and reduce the risk of destabilizing "flash crashes."

Promote healthy competition in financial services by creating a "regulatory sandbox" where startups can test concepts and by providing a clear regulatory framework for cryptocurrencies. . . .

The jury convicted Reynolds of defrauding PixarBio investors through manipulative trading of the company's shares and false and misleading statements about the company's finances, the timeline for FDA approval of its key drug, and Reynolds's own background, which he claimed included curing his own paralysis. In fact, the evidence at trial showed that Reynolds was never paralyzed.

Among the false and misleading statements introduced into evidence was a December 2015 email and private placement memorandum, in which Reynolds promised investors that PixarBio's drug, NeuroRelease, would end "thousands of years of morphine and opiate addiction." In fact, the evidence at trial demonstrated that the drug would not end opioid addiction, and was simply an existing drug for which PixarBio claimed to have developed an additional means of delivery in a time-release form for post-operative pain. 

In August 2016, Reynolds caused PixarBio to issue a press release announcing that a private securities offering underway at the time was oversubscribed, and that the maximum offering amount would be increased from $20 million to $30 million. Two months later, Reynolds caused PixarBio to issue another press release announcing that, due to oversubscription, the maximum offering amount would be increased again from $30 million to $40 million. In fact, the evidence at trial showed that the securities offering was never fully subscribed and had raised less than $10 million. 

Reynolds also misrepresented the timeline to FDA approval for NeuroRelease. In a November 2016 securities filing that Reynolds signed as PixarBio's CEO, the company stated that clinical trials were expected to begin "in late 2017 and US FDA approvals for the NeuroRelease 14-day product are expected in 2018," despite the fact that PixarBio managers had told Reynolds that this timeline was not achievable. 

Reynolds directed two co-conspirators, Kenneth Stromsland and Jay Herod, to engage in manipulative trading in PixarBio shares that artificially pushed up the stock's trading price. The evidence demonstrated that Herod shared the proceeds of his trading with Reynolds and PixarBio. Reynolds then misled the SEC about the trading and his prior misstatements in sworn testimony, during which he introduced a backdated document as purported evidence that $300,000 in trading proceeds Herod had given him was actually an investment unrelated to Herod's trading. Reynolds also induced Herod and Stromsland to mislead the SEC in their own sworn testimony. Herod and Stromsland previously pleaded guilty to securities fraud and obstruction charges and testified at the trial. 

From April 2014 to May 2017, Mercedes worked for a mortgage lender as a payment processor and had access to the company's computer system. She discovered that some escrow checks were returned to the company as undeliverable. Mercedes admitted that she would monitor those funds by checking monthly reports to see if the funds were ever claimed. If the money was not claimed, Mercedes recruited various family members and friends to allow her to use their bank accounts. With that information, Mercedes used her family members' and friends' identities to open reloadable debit/credit accounts. She accessed the company's computer system and made it appear as if the customer requested that the money be sent via wire transfer into the fraudulent accounts. After creating the request, Mercedes then accessed the company's computer and approved the transfer using a co-worker's login and password.

Mercedes caused approximately 580 fraudulent wire transfers, totaling more than $2 million, from her company's bank account to bank accounts and reloadable debit/credit accounts controlled by Mercedes' relatives, friends or associates. She then used the money to pay personal expenses.

[E]quiAlt, Davison, Rybicki, and the entities they control, fraudulently raised millions of dollars by making material misrepresentations to investors about EquiAlt's investment strategy, the financial condition of the investments, and the uses of investor proceeds. The defendants allegedly told investors they would pool investor funds and use approximately 90% of the money to purchase undervalued real estate, rent or flip the properties, and pay investors 8-10% annual interest generated from the real estate investments. In reality, the complaint alleges, a large portion of investor money went to support Davison's and Rybicki's lavish personal spending, and less than 50% of the funds raised were used to invest in properties. In addition, money from one investment fund controlled by EquiAlt was allegedly used to make Ponzi-like payments to investors in another fund.

• Securities Industry Commentator
• Bill Singer