Financial Professionals Coalition, Ltd. Offers Historic Clearinghouse of Resources / Industry’s Disenfranchised Men and Women Now Have Solutions (Financial Professionals Coalition Press Release) 

February 21, 2023 —

The Financial Professionals Coalition, Ltd. launched today and is offering free membership to the one-million-plus financial professionals who power the industry. https://www.finprocoalition.com/index.html

The Financial Professionals Coalition was founded by former FINRA Small Firm Governor Stephen Kohn, a 39-year industry veteran, who worked as a registered representative and rose to open his own brokerage firm.

The Coalition is the result of several years of conversations and planning by its Chair Stephen Kohn and veteran industry lawyer Bill Singer, who is a leading advocate for Wall Street reform and the publisher of the “Securities Industry Commentator” and the “BrokeAndBroker.com Blog."

Chair Kohn promises that:

“The Financial Professionals Coalition will elevate the industry by offering a clearinghouse of resources to help our members navigate their careers and better handle their daily personal and professional challenges. The Coalition will be inclusive and diverse; and our Founders’ backgrounds reflect an amazing history of talent, accomplishment, and compassion. As such, we expect that our membership will hold many views and opinions, often at odds with each other. We welcome robust debate and the clash of ideas in the marketplace.”

Membership in the Financial Professionals Coalition is free and our help is available by simply logging on to our website at www.finprocoalition.com and submitting a confidential request.

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The Financial Professionals Coalition, Ltd. is a corporation registered in the state of Colorado.

© 2023 Financial Professionals Coalition, Ltd.

For more information [PRESS ONLY]:

Stephen Kohn

(303) 880-4304

info@finprocoalition.com 

For more information on Membership

https://www.finprocoalition.com/#contact 

Industry vets form organization to stand up for individual advisors (Financial Planning by Dan Shaw)
https://www.financial-planning.com/news/new-industry-group-forms-for-individual-financial-advisors
Financial Planning's Dan Shaw reports in part that the "founders of the Financial Professionals Coalition contend that most industry groups back firms and big players. They plan to stand up for the little guy."

SEC Obtains Final Judgments Against Two Participants in International Microcap Fraud Schemes (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25644.htm
Without admitting or denying the allegations in an SEC Complaint filed in the United States District Court for the District of Massachusetts:

• Graham R. Taylor consented to a Final Judgment
  https://www.sec.gov/litigation/litreleases/2023/judg25644-taylor.pdf
  that permanently enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act, and Rule 10b-5 thereunder, and the registration provisions of Section 5 of the Securities Act. Taylor's judgment orders him to pay disgorgement of $3,432,412, prejudgment interest of $1,285,272, and a civil penalty of $207,183; and
• William T. Kaitz consented to a Final Judgment
  https://www.sec.gov/litigation/litreleases/2023/judg25644-kaitz.pdf
  that permanently enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Kaitz's judgment orders him to pay disgorgement of $812,854, prejudgment interest of $279,014, and a civil penalty of $215,000.

Both Final Judgments impose penny stock bars against Taylor and Kaitz. The court previously entered a judgment by default against Frederick Sharp that, among other relief, ordered him to pay more than $50 million. As alleged in part in the SEC Release:

Canadian resident Frederick Sharp masterminded a complex scheme from 2011 to 2019 in which he and his associates enabled control persons of microcap companies, whose stock was publicly traded in the U.S. securities markets, to conceal their control and ownership of huge amounts of the stock and then surreptitiously dump the stock into the U.S. markets, in violation of federal securities laws.  The services Sharp and his associates allegedly provided included furnishing networks of offshore shell companies to conceal stock ownership, arranging stock transfers and money transmittals, and providing encrypted accounting and communications systems.

The complaint alleges that one group of control persons comprised of three defendants frequently collaborated with Sharp to sell massive stock positions while hiding their control positions and stock promotional activities from the investing public. Taylor allegedly coordinated with these defendants to sell shares fraudulently and he received a significant cut of the illegal stock sale proceeds. According to the complaint, Kaitz worked as a promoter and touted stocks that the control group simultaneously planned to sell, while concealing their roles.

SEC Charges Investment Adviser Hite Hedge Asset Management LLC with Violating a Trading Rule (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25643.htm
In the United States District Court for the District of Massachusetts, the SEC filed a Complaint charging HITE Hedge Asset Management LLC with violating Rule 105 of Regulation M under the Securities Exchange Act of 1934. Without admitting or denying the allegations in the SEC Complaint:

• Defendant HITE Hedge Asset Management consented to the entry of a final judgment ordering it to pay a penalty of $103,591,and agreed to the entry of a related order in SEC administrative proceedings finding that it violated Rule 105 and to cease and desist from committing or causing violations of Rule 105; 
• Relief Defendant HITE Hedge LP consented to the entry of a final judgment ordering it to disgorge profits of $18,236 and pay interest of $806; 
• Relief Defendant HITE Hedge II LP agreed to the entry of a final judgment ordering it to disgorge profits of $39,975 and pay interest of $1,768; and
• Relief Defendant HITE Hedge Offshore Ltd. agreed to the entry of a final judgment ordering it to disgorge profits of $53,417 and pay interest of $2,362. 
  

As alleged in part in the SEC Release:

[I]n May 2021 HITE Hedge Asset Management violated Rule 105, which prohibits short selling an equity security during a restricted period (generally five business days before a covered public offering) and then purchasing the same security in the covered offering, absent an exception. The Rule applies regardless of the trader's intent, and is designed to prevent potentially manipulative short selling before the pricing of covered offerings.

According to the SEC's complaint, at the time of its unlawful trading, HITE Hedge Asset Management did not have any formal written policies relating to Rule 105. The SEC's complaint alleges that it was not until after the SEC began its investigation into the illegal trading that HITE Hedge Asset Management implemented a written Rule 105 policy, conducted a review of its trading history to determine if other Rule 105 violations had occurred, and otherwise enhanced its compliance measures.

SEC Charges The Church of Jesus Christ of Latter-day Saints and Its Investment Management Company for Disclosure Failures and Misstated Filings (SEC Release)
https://www.sec.gov/news/press-release/2023-35
Ensign Peak Advisers Inc. (a non-profit entity operated by The Church of Jesus Christ of Latter-day Saints to manage the Church’s investments) agreed to settle allegations in an SEC Order that it violated Section 13(f) of the Securities Exchange Act and Rule 13f-1 thereunder by failing to file Forms 13F and for misstating information in these forms.
https://www.sec.gov/litigation/admin/2023/34-96951.pdf. Further, the Church agreed to settle the SEC’s allegation that it caused Ensign Peak’s violations through its knowledge and approval of Ensign Peak’s use of the shell LLCs. The SEC Release asserts Ensign Peak agreed to pay a $4 million penalty and the Church agreed to pay a $1 million penalty. As alleged in part in the SEC Release:

[F]rom 1997 through 2019, Ensign Peak failed to file Forms 13F, the forms on which investment managers are required to disclose the value of certain securities they manage. According to the order, the Church was concerned that disclosure of its portfolio, which by 2018 grew to approximately $32 billion, would lead to negative consequences. To obscure the amount of the Church’s portfolio, and with the Church’s knowledge and approval, Ensign Peak created thirteen shell LLCs, ostensibly with locations throughout the U.S., and filed Forms 13F in the names of these LLCs rather than in Ensign Peak’s name. The order finds that Ensign Peak maintained investment discretion over all relevant securities, that it controlled the shell companies, and that it directed nominee “business managers,” most of whom were employed by the Church, to sign the Commission filings. The shell LLCs’ Forms 13F misstated, among other things, that the LLCs had sole investment and voting discretion over the securities. In reality, the SEC’s order finds, Ensign Peak retained control over all investment and voting decisions.

Bill Singer's Comment: Not disclosed in the SEC Release is that the settlements were entered into "without admitting or denying the findings," as set forth in the underlying SEC Order.

SEC Charges Investment Adviser Candlestick Capital Management LP with Violating a Trading Rule (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25642.htm
In a Complaint filed in the United States District Court for the District of Connecticut, the SEC charged Candlestick Capital Management LP with violating Rule 105 of Regulation M under the Securities Exchange Act. Without admitting or denying the allegations in the SEC Complaint:

• Defendant Candlestick Capital consented to the entry of a final judgment ordering it to pay a penalty of $810,000, to cease and desist from committing or causing violations of Rule 105; and to a finding in a related Order that it violated Rule 105; 
• Relief Defendant Candlestick Master Fund LP agreed to the entry of a final judgment ordering it to disgorge profits of $1,565,305 and to pay interest of $89,439, and
• Relief Defendant Candlestick US F&F Fund LP agreed to the entry of a final judgement ordering it to pay disgorgement of $55,092 and to pay interest of $3,147.

As alleged in part in the SEC Release:

[I]n June 2020 Candlestick Capital violated Rule 105, which prohibits short selling an equity security during a restricted period (generally five business days before a covered public offering) and then purchasing the same security in the offering, absent an exception. The Rule applies regardless of the trader's intent, and is designed to prevent potentially manipulative short selling before the pricing of covered offerings.

According to the SEC's complaint, after concluding it had violated Rule 105, Candlestick Capital did not initiate a formal review of its trading history or self-report its violation to the Commission. The complaint alleges that Candlestick Capital only acknowledged the violation after Commission staff asked about it during a routine examination in 2021. According to the complaint, Candlestick Capital has since undertaken remedial steps, including revising its Rule 105 policies and procedures.

CFTC Denies Whistleblower Awards to Five Claimants 
Order Determining Whistleblower Award Claims (Whistleblower Award Determ. No. 23-WB-03)
https://www.whistleblower.gov/sites/whistleblower/files/2023-02/No.%2023-WB-03.pdf
The CFTC's Claims Review Staff ("CRS") issued a Preliminary Determination recommending the denial of a Whistleblower Award to five Claimants. The Commission ordered that CRS's recommendations be approved. 

CFTC Approves Whistleblower Award to Claimant 
Order Determining Whistleblower Award Claims (Whistleblower Award Determ. No. 23-WB-02)
https://www.whistleblower.gov/sites/whistleblower/files/2023-02/No.%2023-WB-02.pdf
The CFTC's Claims Review Staff ("CRS") issued a Preliminary Determination recommending the denial of a Whistleblower Award to Claimant. The Commission ordered that CRS's recommendations be approved. 

CFTC Approves Whistleblower Award to Claimant 1 and Denies Award to Claimants 2, 3, and 4.
Order Determining Whistleblower Award Claims (Whistleblower Award Determ. No. 23-WB-01)
https://www.whistleblower.gov/sites/whistleblower/files/2023-02/No.%2023-WB-01.pdf
The CFTC's Claims Review Staff ("CRS") issued a Preliminary Determination recommending a Whistleblower Award to Claimant 1 (redacted percentage) and the denial of Awards to Claimants 2, 3, and 4. The Commission ordered that CRS's recommendations be approved. 

FINRA Fines and Suspends Rep For Working as Tax Preparer
In the Matter of Jeremy Jefferson, Respondent (FINRA AWC 2022075246601)
https://www.finra.org/sites/default/files/fda_documents/2022075246601
%20Jeremy%20Jefferson%20CRD%20%204444433%20AWC%20gg.pdf
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Jeremy Jefferson submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. The AWC asserts that Jeremy Jefferson was first registered in 2004 with Morgan Stanley. In accordance with the terms of the AWC, FINRA imposed upon Jeremy Jefferson a $5,000 fine and a three-month suspension from associating with any FINRA member in all capacities. As alleged in part in the AWC:

From January 2008 to April 2022, Jefferson worked as a tax preparer outside of his employment at Morgan Stanley without disclosing his tax preparation work to Morgan Stanley.

Additionally, from 2019 to 2021, Jefferson submitted inaccurate responses to Morgan Stanley’s annual compliance questionnaires indicating that he was not engaged in any outside business activity.

Therefore, Jefferson violated NASD Rules 3030 and 2110 and FINRA Rules 3270 and 2010.