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.

###

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  

New Coalition Focuses on Industry’s Individuals / The Financial Professional Coalition will cater to the "rank-and file" of the industry by offering specific, non-legal assistance for reps and support staff (WealthManagement.com by Patrick Donachie)
https://www.wealthmanagement.com/industry/new-coalition-focuses-industry-s-individuals
Wealth Management's Patrick Donachie does a wonderful job capturing the essence of the Financial Professionals Coalition's recent launch. As Donachie accurately notes in part:

The Financial Professional Coalition wants to be a one-stop-shop for answering questions and allaying the anxieties of individuals in the industry ranging from registered reps to back-office staff. 

United States Supreme Court Precludes Bankruptcy Discharge of Debt Obtained By Fraud Regardless of Petitioner's Culpability
Kate Marie Bartenwerfer, Petitioner, v. Kieran Buckley (Opinion, United States Supreme Court, No. 21-908, 598 U.S. ___(2023) /February 22, 2023)
https://www.supremecourt.gov/opinions/22pdf/21-908_n6io.pdf
As set forth in the Syllabus:

Kate and David Bartenwerfer decided to remodel the house they jointly owned in San Francisco and to sell it for a profit. David took charge of the project, while Kate remained largely uninvolved. They eventually sold the house to respondent Kieran Buckley. In conjunction with the sale, Kate and David attested that they had disclosed all material facts related to the property. After the purchase, Buckley discovered several defects that the Bartenwerfers had failed to disclose. Buckley sued in California state court and won, leaving the Bartenwerfers jointly responsible for more than $200,000 in damages. Unable to pay that judgment or their other creditors, the Bartenwerfers filed for Chapter 7 bankruptcy. Buckley then filed an adversary complaint in the bankruptcy proceeding, alleging that the debt owed him on the state-court judgment was nondischargeable under the Bankruptcy Code’s exception to discharge of “any debt . . . for money . . . to the extent obtained by . . . false pretenses, a false representation, or actual fraud.” 11 U. S. C. §523(a)(2)(A). The Bankruptcy Court found that David had committed fraud and imputed his fraudulent intent to Kate because the two had formed a legal partnership to renovate and sell the property. The Bankruptcy Appellate Panel disagreed as to Kate’s culpability, holding that §523(a)(2)(A) barred her from discharging the debt only if she knew or had reason to know of David’s fraud. On remand, the Bankruptcy Court determined that Kate lacked such knowledge and could therefore discharge her debt to Buckley. The Bankruptcy Appellate Panel affirmed. The Ninth Circuit reversed in relevant part. Invoking Strang v. Bradner, 114 U. S. 555, the court held that a debtor who is liable for her partner’s fraud cannot discharge that debt in bankruptcy, regardless of her own culpability.

Held: Section 523(a)(2)(A) precludes Kate Bartenwerfer from discharging in bankruptcy a debt obtained by fraud, regardless of her own culpability. Pp. 3–12.

(a) Kate (hereinafter, Bartenwerfer) disputes a straightforward reading of §523(a)(2)(A)’s text. Bartenwerfer argues that an ordinary English speaker would understand that “money obtained by fraud” means money obtained by the individual debtor’s fraud. This Court disagrees. The passive voice in §523(a)(2)(A) does not hide the relevant actor in plain sight, as Bartenwerfer suggests—it removes the actor altogether. Congress framed §523(a)(2)(A) to “focu[s] on an event that occurs without respect to a specific actor, and therefore without respect to any actor’s intent or culpability.” Dean v. United States, 556 U. S. 568, 572. It is true that context can confine a passive-voice sentence to a likely set of actors. See, e.g., E. I. du Pont de Nemours & Co. v. Train, 430 U. S. 112, 128–129. But the legal context relevant to §523(a)(2)(A)—the common law of fraud—has long maintained that fraud liability is not limited to the wrongdoer. Understanding §523(a)(2)(A) to reflect “agnosticism” as to the identity of the wrongdoer is consistent with the age-old rule of fraud liability.

Bartenwerfer points out that “ ‘exceptions to discharge should be confined to those plainly expressed.’ ” Bullock v. BankChampaign, N. A., 569 U. S. 267, 275. The Court, however, has never used this principle to artificially narrow ordinary meaning, invoking it instead to stress that exceptions should not extend beyond their stated terms. See, e.g., Gleason v. Thaw, 236 U. S. 558, 559–562.

Bartenwerfer also seeks support from §523(a)(2)(A)’s neighboring provisions in subparagraphs (B) and (C), both of which require some culpable action by the debtor herself. Bartenwerfer claims that these neighboring provisions make explicit what is unstated in (A). This argument turns on its head the rule that “ ‘[w]hen Congress includes particular language in one section . . . but omits it in another section of the same Act,’ ” the Court generally takes “the choice to be deliberate.” Badgerow v. Walters, 596 U. S. ___, ___. If there is an inference to be drawn here, the more likely one is that (A) excludes debtor culpability from consideration given that (B) and (C) expressly hinge on it. Bartenwerfer suggests it would defy credulity to think that Congress would bar debtors from discharging liability for fraud they did not personally commit under (A) while allowing debtors to discharge debt for (potentially more serious) fraudulent statements they did not personally make under (B). But the Court offered a possible answer for this disparity in Field v. Mans, 516 U. S. 59, 76–77. Whatever the rationale, it does not defy credulity to think that Congress established differing rules for (A) and (B). Pp. 3–8.

(b) Any remaining doubt about the textual analysis is eliminated by this Court’s precedent and Congress’s response to it. In Strang v. Bradner, 114 U. S. 555, the Court held that the fraud of one partner should be imputed to the other partners, who “received and appropriated the fruits of the fraudulent conduct.” Id., at 561. The Court so held despite the fact that the relevant 19th-century discharge exception for fraud disallowed the discharge of debts “created by the fraud or embezzlement of the bankrupt.” 14 Stat. 533 (emphasis added). And when Congress next overhauled bankruptcy law, it deleted the phrase “of the bankrupt” from the discharge exception for fraud. The unmistakable implication is that Congress embraced Strang’s holding. See Ysleta Del Sur Pueblo v. Texas, 596 U. S. ___, ___. Pp. 8–10.

(c) Finally, Bartenwerfer insists that the preclusion of faultless debtors from discharging liabilities run up by their associates is inconsistent with bankruptcy law’s “fresh start” policy. But the Bankruptcy Code is not focused on the unadulterated pursuit of the debtor’s interest, and instead seeks to balance multiple, often competing interests. Bartenwerfer’s fairness-based critiques also miss the fact that §523(a)(2)(A) does not define the scope of one’s liability for another’s fraud. Section 523(a)(2)(A) takes the debt as it finds it, so if California did not extend liability to honest partners, §523(a)(2)(A) would have no role here. And while Bartenwerfer paints a picture of liability being imposed on hapless bystanders, fraud liability generally requires a special relationship to the wrongdoer and, even then, defenses to liability are available. Pp. 10–12.

860 Fed. Appx. 544, affirmed. 

BARRETT, J., filed an opinion for a unanimous Court. SOTOMAYOR, J., filed a concurring opinion, in which JACKSON, J., joined. YY 

Forsage Founders Indicted in $340M DeFi Crypto Scheme / First Charged Criminal Fraud Case Involving a DeFi Ponzi Scheme (DOJ Release)
https://www.justice.gov/opa/pr/forsage-founders-indicted-340m-defi-crypto-scheme
In an Indictment filed in the United States District Court for the District of Oregon, Vladimir Okhotnikov, aka Lado; Olena Oblamska, a/k/a Lola Ferrari; Mikhail Sergeev, a/k/a  Mike Mooney, a/k/a Gleb, a/k/a  Gleb Million; and Sergey Maslakov (the founders of Forsage, a purportedly decentralized finance (DeFi) cryptocurrency investment platform) were each charged with conspiracy to commit wire fraud. As alleged in part in the DOJ Release:

[D]efendants aggressively promoted Forsage to the public through social media as a legitimate and lucrative business opportunity, but in reality, the defendants operated Forsage as a Ponzi and pyramid investment scheme that took in approximately $340 million from victim-investors around the world.

. . .

[D]efendants allegedly coded and deployed smart contracts that systematized their combined Ponzi-pyramid scheme on the Ethereum (ETH), Binance Smart Chain, and Tron blockchains. Analysis of the computer code underlying Forsage’s smart contracts allegedly revealed that, consistent with a Ponzi scheme, as soon as an investor invested in Forsage by purchasing a “slot” in a Forsage smart contract, the smart contract automatically diverted the investor’s funds to other Forsage investors, such that earlier investors were paid with funds from later investors. 

. . .

[D]efendants falsely promoted Forsage to the public as a legitimate, low-risk, and lucrative investment opportunity through Forsage’s website and various social-media platforms. However, blockchain analytics confirmed that over 80% of Forsage investors received fewer ETH back than they had invested in Forsage’s Ethereum program, with over 50% of investors never receiving a single payout. Additionally, according to court documents, the defendants coded at least one of Forsage’s accounts (known as the “xGold” smart contract on the Ethereum blockchain) in a way that fraudulently siphoned investors’ funds out of the Forsage investment network and into cryptocurrency accounts under the founders’ control, which was contrary to representations made to Forsage investors that “100% of the [Forsage] income goes directly and transparently to the members of the project with zero risk.”

SEC Charges African Gold Acquisition Corp. with Internal Controls, Reporting, and Recordkeeping Failures / Control failures enabled former CFO to misappropriate approximately $1.2 million from the SPAC’s operating bank account (SEC Release)
https://www.sec.gov/news/press-release/2023-36
Without admitting or denying the findings in an SEC Order, African Gold Acquisition Corp agreed to a cease-and-desist order and to pay a $103,591 civil monetary penalty. On January 3, 2023, the SEC charged African Gold’s former Chief Financial Officer, Cooper J. Morgenthau, with violating several provisions of the federal securities laws related to misappropriating money from African Gold’s operating bank account and for lying to African Gold’s accountants and auditor, circumventing and/or knowingly failing to implement internal accounting controls, falsifying African Gold’s books and records, and filing false certifications with the Commission. As alleged in part in the SEC Release:

[A]frican Gold’s only liquid asset was the money held in its operating bank account, and thus potential fraud by management posed one of the company’s most significant risks of material misstatement in its financial statements. The SEC’s order alleges that, despite this risk, African Gold gave its former CFO control over nearly all aspects of its operating bank account and financial reporting process with little to no oversight. According to the order, this enabled the CFO to make unauthorized withdrawals from African Gold’s operating bank account to himself without detection for more than one year and to alter the company’s bank account statements to conceal his fraud. As a result, according to the SEC’s order, African Gold materially misstated information in several required financial filings with the Commission and failed to maintain accurate books and records. On February 13, 2023, African Gold filed a preliminary proxy statement seeking shareholder approval to extend its liquidation date from March 2, 2023 to June 2, 2023 and to allow African Gold, without another shareholder vote, to further extend the liquidation date until March 2, 2024, among other proposals.

CFTC Charges Unregistered Commodity Trading Advisor with Fraud, Misappropriation, and Unregistered Commodity Pool Operator with Misappropriation (CFTC Release)
https://www.cftc.gov/PressRoom/PressReleases/8663-23
In the United States District Court for the District of Minnesota, the CFTC filed a Complaint charging Richard “Rick” Miller and Flip 2 Futures Trading Company LLC (F2F) with fraud, misappropriation, and unregistered activity related to trading on behalf of a commodity pool run by Justin Dendinger and Punch Drunk Marketing LLC (PDM) of Somerset, Wisconsin. As alleged in part in the CFTC Release:

[D]endinger and PDM pooled investor funds in accounts in their names and transferred the funds to F2F and Miller for trading. As alleged in the complaint, from approximately July 2019 through November 2020, F2F acted as an unregistered commodity trading advisory (CTA) by soliciting funds from and engaging in discretionary trading on behalf of PDM. Miller acted as an unregistered associated person (AP) of F2F. 

F2F and Miller are also charged with illegally collecting funds from the pooled investment vehicle in F2F’s or Miller’s bank and trading accounts, failing to provide a required disclosure document to PDM, and failing to maintain required records. In soliciting funds for and operating the pooled investment vehicle, PDM acted as an unregistered commodity pool operator (CPO) and Dendinger acted as an unregistered AP of PDM. PDM and Dendinger are also charged with illegally commingling pool participant funds with the funds of PDM and Dendinger and failing to provide pool participants with required disclosure documents. Dendinger, individually, is charged with making false or misleading statements of a material fact to the CFTC.

The CFTC alleges Miller made material misrepresentations about Miller’s futures trading performance and having other assets under management to persuade PDM and Dendinger to transfer funds to F2F and Miller for the purpose of trading futures contracts. In fact, according to the complaint, Miller did not trade as successfully as he claimed and did not have millions under management. Moreover, the complaint alleges F2F and Miller misappropriated some of PDM’s funds by failing to transfer all of PDM’s funds to Miller’s trading account and failing to transfer to PDM funds withdrawn from Miller’s trading account. 

The CFTC complaint further alleges PDM and Dendinger solicited and accepted $400,000 from nine pool participants residing in Minnesota and Wisconsin. The complaint also alleges PDM and Dendinger misappropriated pool participants’ investment funds by failing to transfer all funds provided to PDM by pool participants for the purpose of futures trading to F2F and Miller for trading as provided in PDM’s agreements with pool participants and by failing to return to pool participants funds repaid by F2F.

Finally, the complaint alleges that in response to a records subpoena and in response to a CFTC staff letter, Dendinger, via his attorney, falsely stated he had no trading accounts in his name with a registered futures commission merchant and had not engaged in any trading of specified financial products.

FINRA Arbitration Panel Awards Former Aegis Capital Associated Person Customers Over $186,000
In the Matter of the Arbitration Between Juan Angel Seoane, Claimant, v. Aegis Capital Corp, Respondent (FINRA Arbitration Award 20-03946)
https://www.finra.org/sites/default/files/aao_documents/20-03946.pdf
In a FINRA Arbitration Statement of Claim filed in December 2020, associated person Claimant Seoane asserted breach of contract
and warranties; promissory estoppel; and fraudulent inducement. Claimant sought $133,333.33 in compensatory damages, punitive damages, consequential damages, interest, fees, and costs.

Respondent Aegis Capital generally denied the allegations, asserted affirmative defenses, and filed a Counterclaim seeking $26,666.67 plus interest. 

The FINRA Arbitration Panel found Respondent Aegis Capital liable and ordered it to pay to Claimant Seoane $133,333.33 in compensatory damages plus interest and $53,333.33 in attorneys' fees. 

FINRA Arbitration Panel Awards Customers over $60,000 in Damages Against No-Show Associated Person
In the Matter of the Arbitration Between Germon G. Medeiros and Jennifer L. Medeiros,Individually and as Joint Tenants, and the Germon G. Medeiros Trust, Claimants, v. Centaurus Financial, Inc. and Joseph Michael Todd, Respondents (FINRA Arbitration Award 22-01019)
https://www.finra.org/sites/default/files/aao_documents/22-01019.pdf
In a FINRA Arbitration Statement of Claim filed in May 2022, public customer Claimants asserted "outside business activities, selling away and private securities transactions; unsuitable investments and negligent account management; negligence and negligent supervision; bogus statement summaries; conversion; violations of the Florida Securities Act; sale of unregistered and non-exempt  securities; breach of fiduciary duty and constructive fraud; violations of FINRA Conduct Rules and NYSE Board Rules; violations of statutes and industry rules related to senior investors, elderly persons, and disabled adults; and respondeat superior.".The causes of action allegedly relate to:

allegedly inappropriate dealings between Respondents and Claimants related to the sale of a mortgage fund outside of Respondent Centaurus, as well as numerous substantial sales of illiquid securities which were allegedly misrepresented to Claimants as safe.

Claimants requested $100,000 to $500,00 in damages, punitive damages, interest, recission, costs, fees.

In October 2022, Claimant dismissed with prejudice Respondent Centaurus; and, accordingly, the FINRA Arbitration Panel made no determination against that party.

Respondent Todd did not file a Statement of Answer or appear at the hearing. 

The FINRA Arbitration Panel found Respondent Todd liable and ordered him to pay to Claimants $60,000 in compensatory damages, $37,500 in attorneys' fee, and a $300 filing fee.

 = = =
2/21/2023 

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.