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The Financial Professionals Coalition, Ltd. is a diverse resource for over 1.2 million registered representatives, associated persons, traders, bankers, back-office staff, and owners of broker-dealers and registered investment advisors. The Coalition provides courtesy consultations with industry experts. Membership is free. 

Federal Reserve Board announces two enforcement actions against Deutsche Bank AG, its New York branch, and other U.S. affiliates (Federal Reserve Board Release)
https://www.federalreserve.gov/newsevents/pressreleases/enforcement20230719a.htm
The Federal Reserve Board  ("FRB") issued a Consent Order
https://www.federalreserve.gov/newsevents/pressreleases/files/enf20230719a1.pdf and a $186 million fine against Deutsche Bank AG, its New York branch, and other U.S. affiliates. The FRB found that Deutsche Bank made insufficient remedial progress under the 2015 and 2017 Consent Orders and had deficient anti-money laundering internal controls and governance processes relating to its prior relationship with the Estonian branch of Danske Bank. This Consent Order requires Deutsche Bank to prioritize completion of several critical requirements of the Board's prior orders. Also, the FRB announced a Written Agreement
https://www.federalreserve.gov/newsevents/pressreleases/files/enf20230719a2.pdf to address other general deficiencies relating to Deutsche Bank's governance, risk management, and controls.

Senator Elizabeth Warren Requests SEC Investigation into Tesla, Inc.'s Alleged Failure to Address Corporate Governance Issues Attendant to CEO Elon Musk (Letter from Senator Warren to SEC Chair Gary Gensler / July 17, 2023)
https://www.warren.senate.gov/imo/media/doc/Letter%20to%20SEC
%20asking%20for%20investigation%20into%20Tesla%20-%20FINAL1.pdf
As set out in the "Conclusion" of Senator Warren's letter:

Mr. Musk purchased Twitter and took the company private, and as such, he can run that company as he sees fit – consistent, of course, with relevant federal and state laws.64 But Tesla is publicly owned, and Mr. Musk and the Board have responsibilities to shareholders and the public in their management of the company. Mr. Musk’s personal wealth – and his personal relationships with Board members – do not shield him or the Tesla Board from meeting basic SEC governance and disclosure rules. The concerns about Mr. Musk’s actions as Tesla CEO since his purchase of Twitter and the Board’s failure to address or disclose potential risks related to them raise obvious questions about Tesla’s compliance with SEC rules and regulations. I am therefore asking the SEC to open an investigation into Tesla to ensure that the actions of Mr. Musk and the Tesla Board have not violated securities laws.

Diana Mae Cazenas Fernandez, also known as “Diana Fernandez Koporan,” “Dana Fernandez,” and “Dajana Ko,” 37, of Bergenfield, New Jersey and Serbia, has been indicted on four counts of wire fraud and one count of securities fraud. According to court documents, Fernandez operated companies called “The Self Made Success” and “Diana Mae K., LLC” and used social media and email to solicit investors, offering “no-risk” and “guaranteed” investment opportunities.

Multiple victims, including one from Marion County, West Virginia, invested an aggregate amount of over $300,000. When it was time to deliver returns on the investments, Fernandez made false claims as to why dividends couldn’t be paid and then used investors’ money for her own benefit.

Needham Police Officer Convicted of Insider Trading Conspiracy (DOJ Release)
https://www.justice.gov/usao-ma/pr/needham-police-officer-convicted-insider-
After a jury trial on the United States District Court for the District of Massachusetts. David Forte was convicted of one count of conspiracy to commit securities fraud and one count of securities fraud. Previously, co-conspirator John Younis pled guilty to his role in the conspiracy and was sentenced to one month of home detention plus two years of probation after pleading guilty to his role in the conspiracy. A second alleged co-conspirator pled not guilty and is pending trial. As alleged in part in the DOJ Release:

Beginning in or around June 2016, Forte, a Needham Police Department officer, obtained material non-public information from his brother, who was a senior executive at Analog Devices, Inc. (Analog), a Wilmington, Mass.-based semiconductor company, about Analog’s planned acquisition of Linear Technology Corp. (Linear), a semiconductor company based in Milpitas, Calif. Forte passed the information to Younis and, allegedly, the second-co-conspirator, who purchased Linear securities in the week leading up to the public announcement of the acquisition on July 26, 2016. After the deal was announced, Younis and, allegedly, the second co-conspirator sold their Linear securities for a profit. Younis and, allegedly, the other co-conspirator paid Forte cash kickbacks in exchange for Forte’s stock tip.

Wendy Renee Bunner, age 47, of Spring Hill, Florida, was indicted today for money laundering and lying to a federal agent. Bunner is alleged to have aided and abetted her husband, Samuel Bunner, in obtaining a $280,318.73 cashier’s check from a United Bank account belonging to the victim in order to purchase real property in Charles Town, West Virginia. Wendy Bunner is also charged with lying to a federal agent about the sale of a condominium in Hawaii that once belonged to the victim.

Samuel Bunner was originally charged in May with wire fraud, bank fraud, identity theft, and money laundering. He is now joined by his wife in a superseding indictment which alleges that together they befriended the victim when all three were living in Charles Town. Samuel Bunner obtained a power of attorney from the victim and then he and Wendy Bunner used it to enrich themselves by selling the victim’s real estate, emptying his investment and bank accounts, and opening a credit card in his name, causing a total alleged loss to the victim of more than two million dollars.

Bill Singer's Comment: As if the above facts weren't bad enough, the elderly man "suffered from dementia."

Paralegal Is Charged With Embezzling $1.5 Million From Law Firm's Clients (DOJ Release)
https://www.justice.gov/usao-wdnc/pr/paralegal-charged-embezzling-15-million-law-firms-clients
In the United States District Court for the Western District of North Carolina, an Indictment was filed charging Jennifer Elaine Roarke, 54, with wire fraud. As alleged in part in the DOJ Release:

F]rom 2007 to 2021, Roarke, who is also known as Jennifer Claveria, was employed as an assistant and a paralegal for a law firm in Hickory, North Carolina. The law firm handled, among other things, the administration and management of trusts for clients, including the trusts’ bank accounts. As part of her duties, Roarke was responsible for opening mail, depositing checks into trust bank accounts, and processing invoices. As alleged in the indictment, from 2015 to 2021, Roarke misused her access and position with the law firm to embezzle more than $1.5 million from the trusts of the law firm’s clients. Roarke executed the embezzlement scheme by making hundreds of unauthorized wire transfers from bank accounts associated with the law firm’s clients’ trusts into bank accounts controlled by Roarke. Roarke allegedly used the embezzled funds to pay for personal items, make mortgage, car, and credit card payments, and to fund an extravagant lifestyle.

Bill Singer's Comment: Imagine if she had become a lawyer -- wow, there would have been extra zeros added to the embezzled funds. That being said, why is it that DOJ always seems to allege that the Defendant funded "an extravagant lifestyle?" If you're going to steal money, what would we expect -- that the purloined bucks would go to fund a substandard lifestyle or one just at the poverty line? 

CEO Of Cryptocurrency And Forex Trading Platform Sentenced To Nine Years In Prison For $240 Million Scheme To Defraud Investors (DOJ Release)
https://www.justice.gov/usao-sdny/pr/ceo-cryptocurrency-and-forex-trading-platform-sentenced-nine-years-prison-240-million
In the United States District Court for the Southern District of New York, Eddy Alexandre, 51, pled guilty to one count of commodities fraud; and he was sentenced to nine years in prison plus three years of supervised release and ordered to pay forfeiture in the amount of $248,829,276.73 and restitution in the amount of $213,639,133.53. As alleged in part in the DOJ Release:

From in or about September 2021, up to and including in or about May 2022, ALEXANDRE operated EminiFX, Inc. (“EminiFX”), a purported investment platform that ALEXANDRE founded, and for which he solicited more than $248 million in investments from over 25,000 individual investors.  ALEXANDRE marketed EminiFX as an investment platform through which investors would earn passive income through automated investments in cryptocurrency and forex trading.  ALEXANDRE offered his investors “guaranteed” high investment returns using new technology that he claimed was secret.  Specifically, ALEXANDRE falsely represented to investors that they would double their money within five months of investing by earning at least 5% weekly returns on their investment using a “Robo-Advisor Assisted account” to conduct trading.  ALEXANDRE referred to this technology as his “trade secret” and refused to tell investors what the technology was.  Each week, EminiFX’s website falsely represented to investors that they had earned at least 5% on their investment, which they could withdraw or re-invest.

In truth and in fact, and as ALEXANDRE well knew, EminiFX did not earn 5% weekly returns for its investors.  ALEXANDRE did not even invest a substantial portion of the investor funds entrusted to him, and ALEXANDRE sustained millions of dollars in losses on the limited portion of funds that he did invest, which he did not disclose to his investors.  Instead of using investors’ funds as he had promised, ALEXANDRE also misdirected at least approximately $14,700,000 to his personal bank account.  For example, ALEXANDRE used $155,000 in investor funds to purchase a BMW car for himself and spent an additional $13,000 of investor funds on car payments, including to Mercedes Benz.

Southern California Man Charged With Diverting $4.8 Million In San Francisco-Based Investment Fraud Scheme / Defendant Joon Woo Kim Also Charged With Bank Fraud In Connection With Allegedly False Business Loan Application (DOJ Release)
https://www.justice.gov/usao-ndca/pr/southern-california-man-charged-diverting-48-million-san-francisco-based-investment
In the United States District Court for the Northern District of California, an Indictment was filed charging Joon Woo Kim with eight counts of wire fraud, two counts of bank fraud, and one count of making a false statement to a bank. As alleged in part in the DOJ Release

[K]im, 57, of Montebello, Calif., allegedly engaged in the first fraud scheme beginning June 2015 through at least March 19, 2022. Kim created an investment fund called the M5 Doctors Fund and allegedly induced investors to contribute to the fund by making false statements and omissions about the kinds of investments Kim would make while managing the fund’s assets. For example, Kim allegedly advertised that he would invest assets of the M5 Doctors Fund in securities of Tesla, Inc. and electric vehicle companies. Nevertheless, rather than invest the funds as he promised, Kim allegedly transferred nearly all M5 Doctors Fund assets, including funds from the liquidation of investments and the return on those investments, to CKR Enterprise, Inc., a wholesale food distribution company owned and operated by Kim and his wife.

As General Partner of the M5 Doctors Fund and the person who held himself out as manager and person responsible for the fund, Kim had a duty to disclose all material business, transactions, and investments to the fund’s investors and Limited Partners. Nevertheless, according to the indictment, from 2015 through July 2018, Kim transferred approximately $4.8 million in M5 Doctors Fund assets to CKR without informing the fund’s investors. Additionally, the indictment alleges Kim continued to tell investors he was investing in Tesla stock and the stock of public electric vehicle companies; failed to disclose to M5 Doctors Fund investors that he had transferred essentially all of the fund’s assets to his business, CKR; and took actions to mislead fund investors into believing that the M5 Doctors fund was solvent and engaged in investment activities.

In the second fraud scheme, Kim defrauded Hanmi Bank by applying for two loans for CKR, a $1,300,000 line of credit and a $3,200,000 business loan, that contained materially false and fraudulent representations and promises.

Ex-Spouses Indicted for Laundering Money Stolen from Retirement and Investment Accounts (DOJ Release)
https://www.justice.gov/usao-edva/pr/ex-spouses-indicted-laundering-money-stolen-retirement-and-investment-accounts
In an Indictment filed in the United States District Court for the Eastern District of Virginia, Dasola Abdulrahemm and Ismaila Abdulrahemm were charged with conspiracy to commit money laundering, money laundering, and unlawful monetary transactions. As alleged in part in the DOJ Release:

[F]rom approximately September 2017 to April 2020, Dasola Abdulraheem, 41, and Ismaila Abdulraheem, 44, both Nigerian nationals and formerly spouses, received the proceeds of various financial frauds into accounts that they controlled, and thereafter, conducted financial transactions with the proceeds to disguise the nature and source of the funds.

The indictment further alleges that unknown co-conspirators targeted the victims of this scheme by gaining access to their financial accounts, typically retirement or investment accounts. In one case, co-conspirators are alleged to have gained access to a victim’s severance payout from his former employer. The indictment states that once the conspirators compromised a victim’s account, they posed as the victim and instructed the victim’s financial institution to add a new outside bank account to the victim’s account. The outside account was controlled by either the Abdulraheems or one of the couriers that they used. Once the victim’s financial institution added a conspirator’s account to the victim’s account, the conspirators allegedly directed that money from the victim’s account be siphoned from the victim’s account and deposited into the Abdulraheems’ accounts or into a co-conspirator’s account. The proceeds are alleged to have been used in some cases to purchase salvage cars at auction or to wire money to business entities in Nigeria.

The indictment further alleges that the Abdulraheems attempted to conceal their involvement in laundering proceeds by using shell companies, such as “ISMRAN LLC,” “DAISIM GLOBAL LINK LLC,” “RUKLAT INTERNATIONAL VENTURES,” and “DAISIM INTERNATIONAL” to receive and launder the proceeds of the fraud scheme. 

Nigerian National Extradited from South Africa for Cyber Fraud Scheme Targeting Tulsa Company / Spoofed Email Led to Fraudulent Shipment of $400,000 in Surface Pro Tablets (DOJ Release)
https://www.justice.gov/usao-ndok/pr/nigerian-national-extradited-south-africa-cyber-fraud-scheme-targeting-tulsa-company
In the United States District Court for the Northern District of Oklahoma, a Complaint was filed charging Daniel Ganyo with conspiracy; transportation of stolen goods; means of identification fraud; trafficking in false means of identification; identity theft conspiracy and attempt; aggravated identity theft; mail fraud; wire fraud; and attempt and conspiracy to commit mail and wire fraud. As alleged in part in the DOJ Release:

[G]anyo is alleged to have sent a computer services company in Tulsa a spoofed email using a fraudulently acquired identity and arranged for the purchase of approximately $400,000 worth of Microsoft Surface Pro Tablets. The fraudulent email was successful, and an order was processed and shipped to a company in Raleigh, North Carolina. Ganyo is alleged to have sent a second spoofed email to the North Carolina company, impersonating the Tulsa company, claiming the order was in error and that someone would retrieve the shipment. The shipment was then retrieved from the North Carolina company, repackaged, and prepared for shipment to South Africa by an unknown coconspirator. However, the FBI was able to intercept the shipment in Memphis, Tennessee, and replace the contents with dummy goods and a tracking device. A controlled delivery was then executed in Johannesburg, South Africa and the defendant was arrested by partners with the South African Police Service. Investigation continues into Ganyo’s possible involvement in similar cyber fraud schemes in other parts of the country.

International Cyber Fraudster Sentenced to More Than 8 Years in Federal Prison (DOJ Release)
https://www.justice.gov/usao-ndil/pr/international-cyber-fraudster-sentenced-more-8-years-federal-prison
In the United States District Court for the Northern District of Illinois,  Olalekan Jacob Ponle, 31, a/k/a “Mr. Woodbery” and “Mark Kain” pled guilty to wire fraud; and he was sentenced to eight years and four months in prison, and ordered to pay over $8.03 million in restitution to the victim companies and forfeit numerous luxury items purchased with proceeds traceable to the fraud scheme, including a Rolls Royce Cullinan, Lamborghini Urus, Mercedes-Benz G-Class AMG G55, and Rolex and Patek Philippe watches.  Previously, Ponle had forfeited to the government 151 bitcoin, which were also derived from proceeds traceable to the fraud scheme.  As alleged in part in the DOJ Release, when Ponle was living in the United Arab Emirates in 2019, he worked with:

co-schemers to engage in numerous business email compromise schemes.  The co-schemers used phishing links to gain unauthorized access to email accounts and then created false instructions directing employees of the victim companies to wire money to bank accounts opened by money mules at Ponle’s direction. The fraudulent emails often claimed to be from the company or a known business contact and were nearly identical to prior legitimate emails sent over the company’s email account. After unwitting employees wired money, in some cases millions of dollars, to the bank accounts, Ponle instructed the money mules to convert the proceeds to Bitcoin and send them to him.

As a result of Ponle’s scheme, victim companies suffered more than $8.03 million in actual losses and more than $51.3 million in intended losses.  One of the victim companies was based in Chicago, while others were located in Iowa, Kansas, Michigan, New York, California, and elsewhere.

SEC

SEC Charges North Carolina Resident for Conducting Fraudulent and Unregistered Offerings of Crypto Asset Securities (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25785.htm
In the United States District Court for the Middle District of Florida, the SEC filed a Complaint  https://www.sec.gov/litigation/complaints/2023/comp25785.pdf charging charges Alexander Elbanna, Digital World Exchange, LLC, Boostedpro LLC, and D.W. Exchange, LLC, with violating Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. Without admitting or denying the allegations in the SEC Complaint, the Defendants consented to a bifurcated settlement, agreedto permanent injunctions against violating the charged provisions, conduct-based injunctions, and monetary relief in an amount to be determined by the court at a later date upon motion of the SEC. Additionally,  Elbanna further consented to an officer and director bar. Angela Elbanna is named as a Relief Defendant. In part the SEC Release alleges that:

[B]etween February 2018 and April 2021, Elbanna founded and promoted, in succession, three separate business enterprises: Digital World Exchange, LLC, Boostedpro LLC, and D.W. Exchange, LLC. Each of these businesses allegedly included a proposed crypto asset trading platform and an "in-house exchange token" or crypto asset security whose value purportedly depended on Elbanna's successful launch of the proposed trading platform. To induce investors to purchase DWE and BPC, as well as equity securities in the corporate entity that issued DWE, the complaint alleges that Elbanna and his three entities made materially false and misleading statements to investors concerning Elbanna's level of technological experience and wealth, the risks involved in the investment, and the operation of the associated crypto asset trading platform. As a result of this misconduct, the SEC's complaint alleges that investors lost over $1 million.

SEC Charges Digital World SPAC for Material Misrepresentations to Investors (SEC Release)
https://www.sec.gov/news/press-release/2023-135
Pursuant to an SEC Order
https://www.sec.gov/litigation/admin/2023/33-11213.pdf, Digital World Acquisition Corporation (DWAC) (a special purpose acquisition company (SPAC)) entered into a settlement based upon findings that the company failed to disclose that it had formulated a plan to acquire and was pursuing the acquisition of Trump Media & Technology Group Corp. (TMTG) prior to DWAC’s Initial Public Offering. DWAC agreed to a Cease-and-Desist Order and to pay an $18 million penalty in the event it closes a merger transaction; and, further, should DWAC file an amended Form S-4, any such Form S-4 will be materially complete and accurate and consistent with the findings in the SEC Order. As alleged in part in the SEC Release:

[D]WAC filed an amended Form S-1 in support of its IPO in early September 2021 that stated that neither DWAC nor its officers and directors had had any discussions with any potential target companies prior to the IPO. But, as found in the SEC’s order, dating back to February 2021, an individual who would later become DWAC’s CEO and Board Chairman, and others involved with DWAC, had extensive SPAC merger discussions with TMTG. The SEC’s order further finds that, while DWAC’s CEO and Chairman initially pursued these discussions with TMTG on behalf of another SPAC, he created a plan in the spring and summer of 2021 to potentially use DWAC to pursue a merger with TMTG and used this plan to solicit certain pre-IPO investors. The order also finds that DWAC failed to disclose that the CEO had a potential conflict of interest based on an agreement he had signed with TMTG. As a result, DWAC’s amended Form S-1 was materially false and misleading.

The SEC’s order further states that, in a later Form S-4 filed with the Commission following the announcement of the proposed merger with TMTG, DWAC mischaracterized and omitted information about the history of its interactions with TMTG. 

SEC Charges Monroe Capital for Failing to Disclose SPAC-Related Conflicts of Interest (SEC Release)
https://www.sec.gov/enforce/34-97957-s
Without admitting or denying the findings in an SEC Order
https://www.sec.gov/files/litigation/admin/2023/34-97957.pdf that the firm violated the antifraud and compliance provisions of Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder, and violated and/or caused violations of the beneficial ownership reporting provisions of Section 13(d) of the Securities Exchange Act of 1934 and Rule 13d-2 thereunder; Monroe Capital Management Advisors, LLC consented to the entry of a Cease-and-Desist Order, a Censure, and a $1 million civil penalty to settle the charges. As alleged in part in the SEC Release:

[M]onroe Capital personnel became involved in multiple SPACs whose sponsors were partially owned by Monroe Capital personnel and affiliates.  The Monroe Capital personnel were entitled to a portion of the compensation the SPAC sponsors received upon completion of the SPACs’ business combinations.  The order finds that Monroe Capital invested assets of private funds it advised in certain transactions that helped finance the SPACs’ business combinations and did not timely disclose these conflicts.  In addition, the order finds that Monroe Capital failed to timely file amended reports on Schedule 13G concerning changes to its and its affiliates’ beneficial ownership of the common stock of a public company formed as a result of a SPAC business combination.

SEC Obtains Final Judgment Against Operator of Multi-Million Dollar Ponzi Scheme (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25783.htm
In the United States District Court for the Central District of California, Ryan Morgan Evans agreed to settle the SEC's claims against him for his role in offering and selling unregistered securities and furthering the fraudulent scheme.  Previously, Final Judgments were entered against Evans' co-defendants Eric J. "EJ" Dalius and Saivian LLC. As alleged in part in the SEC Release:

[E]vans served as a top executive in Saivian and sold "Cashback Membership" securities that entitled holders to receive 20 percent cash back on their retail shopping purchases every month in exchange for paying a $125 fee every 28 days and the submission of shopping receipts. According to the complaint, Evans falsely claimed that the company funded these cash back payments to members by monetizing the point-of-sale receipt data submitted by its members. Instead, Saivian allegedly operated as a Ponzi scheme by satisfying promised returns to some investors through the investments of others. Saivian also allegedly operated a pyramid scheme that promised a daily residual income stream for affiliates who sold Saivian memberships to downline recruits.

The court partially granted the SEC's motion for summary judgment on May 24, 2023, finding that undisputed facts established that Evans' offers and sales of Saivian "Cashback Memberships" were sales of investment contracts, and therefore of securities, and that Evans violated the federal securities laws when he offered and sold securities that were not registered.

The final judgment requires Evans to disgorge $175,000 plus prejudgment interest of $52,129, and to pay a $111,614 civil penalty. Evans agreed to settle the charges by admitting his offer and sale of unregistered securities and without admitting or denying the SEC's remaining allegations. The SEC intends to add money received from Evans to the Fair Fund established in this matter to distribute to harmed investors.

SEC Obtains Final Judgments Against Two Oregon Residents and Their Related Entities for Operating a $10 Million Ponzi-Like Scheme (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25784.htm
The United States District Court for the District of Oregon entered Final Judgments against

• Robert D. Christensen https://www.sec.gov/litigation/litreleases/2023/judg25784-christensen.pdf;
• Anthony M. Matic https://www.sec.gov/litigation/litreleases/2023/judg25784-matic.pdf;
• Foresee, Inc., The Commission PDX, LLC, The Policy PDX, LLC
  https://www.sec.gov/litigation/litreleases/2023/judg25784-foresee-et-al.pdf; and
  
• Innings 150, LLC https://www.sec.gov/litigation/litreleases/2023/judg25784-innings.pdf

As alleged in part in the SEC Release:

The SEC's complaint, filed on June 30, 2023, alleged that from at least January 2018 through September 2022, Christensen and Matic used four entities that they founded - Foresee, Inc., The Commission PDX, LLC, The Policy PDX, LLC, and Innings, 150 LLC - to raise money from retail investors, including several retirees, for the purported purpose of investing in real estate. Christensen and Matic allegedly raised this money through the offer and sale of unregistered promissory notes, which promised high interest rates between nine and 15 percent to be paid to investors, in addition to the return of all principal, within just a few months. In reality, the complaint alleged, Christensen and Matic did not have the ability to pay investors the promised returns within the time periods identified in the notes; instead, they relied on new investor money to pay earlier investors. Additionally, Christensen and Matic allegedly used investor money for unauthorized and undisclosed purposes, including to pay for at least one vacation, gifts, casino trips, massages, personal expenses, a whiskey club membership, and cryotherapy.

Without admitting or denying the allegations, Christensen, Matic, and their related entities consented to the entry of final judgments that permanently enjoin them from violating Sections 5 and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgments also impose conduct-based injunctions as well as $5,374,482 in disgorgement and prejudgment interest. Additionally, the final judgments order Christensen and Matic to each pay a $200,000 penalty and impose permanent officer and director bars against them.

SEC Charges Virginia Man in Fraudulent "Free-Riding" Scheme (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25782.htm
Without admitting or denying the allegations in an SEC Complaint
https://www.sec.gov/files/litigation/complaints/2023/comp25782.pdf, Chadd L. Evans consented to the entry of a Final Judgment in the United States District Court for the Western District of Virginia that will permanently enjoin him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder; and, further, enjoin him from opening any brokerage account without first providing the brokerage firm with a copy of the SEC's complaint and final judgment in this matter, and would require that he pay a $10,000 civil penalty. As alleged in part in the SEC Release:

[F]rom July 2020 to October 2020, Evans engaged in a pattern of making bogus transfers of money from various under-funded bank and brokerage accounts to new accounts at other broker-dealers, knowing that he did not have sufficient funds to cover the transfers. The complaint further alleges that Evans immediately began trading securities in the newly opened brokerage accounts using funds the brokerage firms made temporarily available while the fraudulent transfers were pending. When those transfers did not materialize, the brokerages were left with trading losses. According to the complaint, Evans perpetrated this scheme at a series of five brokerage firms, made false deposits totaling over $280,000, and placed nearly $1 million in trades. Evans's trading was not profitable, leaving the brokers with the losses he incurred on those trades.

SEC Charges Twice-Convicted Fraudster Eliyahu Weinstein and Five Others with $38 Million Ponzi-Like Scheme to Defraud Investors (SEC Release)
https://www.sec.gov/news/press-release/2023-134
In the United States District Court for the District of New Jersey, the SEC filed a Complaint https://www.sec.gov/litigation/complaints/2023/comp-pr2023-134.pdf
alleging that Eliyahu Weinstein, Aryeh L. Bromberg, Joel L. Wittels, Richard M. Curry, Christopher J. Anderson, and Alaa Mohamed Hattab violated the antifraud provisions of the Securities Act and the Securities Exchange Act. In 2013, Weinstein pled guilty to wire fraud and money laundering in a real estate Ponzi scheme that caused $200 million in losses and then pleaded guilty again in 2014 to fraud, conspiracy, and money laundering charges in connection with a $6.7 million fraudulent securities offering. In 2014, Weinstein was sentenced to 24 years in prison in connection with both schemes. On January 20, 2021, then-President Donald J. Trump commuted Weinstein’s sentence to time served. As alleged in part in the SEC Release:

[B]eginning in or around November 2021, Weinstein, Bromberg, and Wittels raised money from investors for purported deals through Optimus Investments Inc. while concealing Weinstein’s identity, criminal history, and involvement from investors. Beginning in January 2022, Anderson and Curry allegedly began raising money for Optimus deals through Tryon Management Group LLC, and, by August 2022, they joined the other defendants in actively concealing Weinstein’s role in the venture. Hattab provided substantial assistance to the other defendants in carrying out the scheme.

According to the complaint, by at least April 2022, when some of the purported Optimus deals proved to be unprofitable, Weinstein, Bromberg, Wittels, Curry, and Anderson allegedly undertook a fraudulent scheme to use funds raised from investors to make Ponzi-like payments to earlier investors while mischaracterizing them as investment returns. The SEC alleges that, collectively, the defendants’ fraudulent scheme raised at least $38 million from at least 150 investors. 

SEC Charges Legendary Partners, LLC and Its President with Reality Tv Offering Fraud Targeting Mostly Elderly Investors / SEC Seeks Court Approval for Settlement That Includes Antifraud Injunctions, Officer and Director Bar, and Monetary Relief (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25781.htm
In the United States District Court for the Central District of California, the SEC Filed a Complaint charging Legendary Partners, LLC and its founder/President Scott L. Snyder
https://www.sec.gov/litigation/complaints/2023/comp25781.pdf with conducting a nationwide offering fraud that raised approximately $391,000 from April 2018 to December 2021. As alleged in part in the SEC Release:

[T]he offering was pitched as an opportunity to invest in a start-up company that purportedly would produce a reality-television series about the refurbishment of damaged exotic and luxury vehicles. According to the Complaint, Legendary Partners and Snyder solicited investors using "cold callers" -- including Snyder who nearly always concealed his true identity when interacting with investors by using the alias "Bill Miller" -- located in Orange County, California. The SEC alleged that the cold callers would contact the mostly elderly investors by phone and routinely provide baseless and misleading profit projections designed to entice investors.

The SEC alleged that Snyder also intentionally misdirected money to Legendary Partners from several other investors who intended to invest in different and unrelated offerings. According to the Complaint, instead of investing the money as promised, Snyder instead tricked these investors into depositing their money into accounts controlled by Legendary Partners. The SEC alleges that this money was then misappropriated by Legendary Partners and Snyder.

The SEC also filed and sought court approval for a settlement. Legendary Partners and Snyder consented to the entry of a final judgment that would permanently enjoin them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, prohibit Snyder from participating in the issuance, purchase, offer, or sale of any security (provided, however, that such injunction would not prevent him from purchasing or selling securities for his own personal account), and impose an officer-and-director bar against Snyder.

The final judgment, if approved by the court, would hold Snyder liable for payment of $42,636 in disgorgement plus $9,956 in prejudgment interest, as well as a $50,000 civil penalty. In addition, the final judgment, if approved by the court, would order Legendary Partners to pay $184,706 in disgorgement plus $43,130 in prejudgment interest, as well as a $184,706 civil penalty.

SEC Charges Fifth Third Securities, Inc. for Violating Municipal Bond Disclosure Law (SEC Release)
https://www.sec.gov/enforce/34-97937-s
Without admitting or denying the findings in an SEC Order
https://www.sec.gov/files/litigation/admin/2023/34-97937.pdf that it had willfully violated Section 15B(c)(1) of the Exchange Act, Rule 15c2-12 under the Exchange Act, as well as Rule G-27 of the Municipal Securities Rulemaking Board, Fifth Third Securities, Inc. agreed to settle the charges, cease-and-desist from future violations of those provisions, be censured, and pay $442,465.59 in disgorgement plus prejudgment interest of $67,506.09 and a $200,000 civil money penalty. 

[F]rom March 2018 to September 2022, Fifth Third sold new issue municipal bonds without obtaining required disclosures for investors in 79 municipal bond offerings.  Fifth Third purported to rely on an exemption to the typical disclosure requirements called the limited offering exemption, but it did not take the steps necessary to satisfy the exemption’s criteria.  The order also found that Fifth Third did not have any specific policies or procedures reasonably designed to comply with the limited offering exemption.

SEC Charges Former Broker-Dealer Representative in Connection with Fraudulent Scheme to Manipulate Stock Prices (SEC Release)
https://www.sec.gov/litigation/litreleases/2023/lr25780.htm
Without admitting or denying the allegations in a Complaint filed by the SEC in the United States District Court for the District of Massachusetts
https://www.sec.gov/litigation/complaints/2023/comp25780.pdf, James P. Anglim consented to the entry of a Final Judgment that permanently enjoins him from violating Section 17(a) of the Securities Act and Sections 9(a) and 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder; orders him to pay disgorgement of $405,991, representing his trading profits, and $82,009 in prejudgment interest, and imposes a penny stock bar against Anglim. Based on his cooperation with the Commission's investigation, the Commission determined not to seek a civil penalty in its settlement with Anglim, and has asked the court not to impose a penalty. In part, the SEC Release alleges that from November 2016 to February 2022, Anglim:

helped facilitate market manipulation schemes involving the sale of stock in at least five public companies by other persons at manipulated prices. Anglim has agreed to settle the case by, among other things, paying $488,000.

According to the SEC's Complaint filed in federal court in Boston, Anglim was employed as a registered representative of two different United States-based brokerage firms that engaged in "market-making" activities, which involve a brokerage firm providing liquidity to the securities markets by publicly quoting both a buy price and sell price for stocks and offering to trade with the public at those prices. According to the Complaint, Anglim abused his position as a trader in order to facilitate the illegal sale of stock into the public securities markets by other persons who controlled large blocks of stock in at least five different public companies. Anglim's conduct helped those other persons to dump large quantities of stock into the public markets while concealing that they were the source of all of those sales, thus avoiding disclosure requirements imposed by the federal securities laws. The Complaint alleges that the other persons, who have been previously charged with fraud by the Commission, were not customers of the brokerage firms where Anglim was employed. Nonetheless, as alleged in the Complaint, Anglim entered into repeated arrangements with them whereby he agreed to assist them with stock transactions in a way that benefitted Anglim and allowed the other persons to carry out their fraud. The Complaint alleges that sometimes the other persons stoked artificial demand for the stocks through stock promotions using aggressive sales communications or boiler rooms, which resulted in retail investors purchasing the stock on the basis of the manipulated price and volume information.

Testimony at Hearing before the Subcommittee on Financial Services and General Government U.S. Senate Appropriations Committee by SEC Chair Gary Gensler
https://www.sec.gov/news/testimony/gensler-testimony-fsgg-subcommittee-senate-appropriations-committee-071923
Among Chair Gensler's opening remarks during his testimony:

I am pleased to support the President’s FY 2024 request of $2.436 billion for SEC operations, to put us on a better track for the future. The bulk of the increase would be to support currently authorized staffing levels given inflation. In addition, we’ve requested $39.6 million for needs supporting General Services Administration (GSA)-led real estate projects.

Though in this testimony I’m discussing the full request, I want to thank this Committee for its bipartisan approval last week on the bill that would fund the SEC at $2.364 billion, which would allow the SEC to continue operating at its current level.

CFTC

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FINRA

FINRA Fines and Suspends Rep For Delinking of Household Accounts
In the Matter of Steven M. Brakman, Respondent (FINRA AWC 2022074647501)
https://www.finra.org/sites/default/files/fda_documents/2022074647501
%20Steven%20M.%20Brakman%20CRD%203070076%20AWC%20vr.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, Steven M. Brakman submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. The AWC asserts that Steven M. Brakman was first registered in 2014 with FINRA member firm PFS Investments Inc. In accordance with the terms of the AWC, FINRA imposed upon Brakman a $10,000 fine and a six-month suspension from associating with any FINRA member in all capacities. As alleged in part in the AWC:

While associated with Schwab, Brackman served as a financial consultant. Schwab assigned Brakman certain households, and Brakman provided advice to household members about products available on Schwab’s platform. Brakman received monthly service compensation, which was based in part on the total assets held in accounts linked to his assigned households. Brakman’s service compensation would decrease if customers closed or transferred funds out of linked accounts. Brakman had the ability to delink accounts from assigned households, but Schwab required Brakman to enter a justification in the account management system when doing so.

Between October 2020 and February 2022, Brakman delinked 11 accounts from assigned households with the justification that the households had experienced a “divorce situation.” This justification was false, as Brakman had no basis to believe that any divorce had occurred. When customers subsequently transferred funds out of these delinked accounts, Brakman avoided a negative impact on his monthly service compensation. In total, Brakman received approximately $43,000 in compensation that he would not have received had these 11 accounts remained linked to his assigned households.

By making false entries in Schwab’s account management system to justify delinking accounts from his assigned households, Brakman violated FINRA Rule 2010.  

FINRA Fines and Suspends Rep For Short-Term Trading and Mismarked Solicited Sales
In the Matter of Robert Gerstein, Respondent (FINRA AWC 2019061789202)
https://www.finra.org/sites/default/files/fda_documents/2019061789202
%20Robert%20Gerstein%20CRD%20840752%20AWC%20vr.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, Robert Gerstein submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. The AWC asserts that Robert Gerstein was first registered in 2014 with1978 FINRA member firm Merrill Lynch, Pierce, Fenner & Smith Incorporated. In accordance with the terms of the AWC, FINRA imposed upon Gerstein a $5,000 fine, $129,496 in restitution, and a six-month suspension from associating with any FINRA member in all capacities. As alleged in the "Overview" portion of the the AWC: "From January 2014 to November 2017, Gerstein recommended short-term trading of securities generally intended to be held long-term, and mismarked solicited sale transactions as unsolicited. Accordingly, Gerstein violated FINRA Rules 2111(a), 4511, and 2010."

FINRA Fines and Suspends Rep For Private Securities Transactions
In the Matter of Jeremiah Roman, Respondent (FINRA AWC 2021072968801)
https://www.finra.org/sites/default/files/fda_documents/2021072968801
%20Jeremiah%20Roman%20CRD%206321876%20AWC%20vr.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, Jeremiah Roman submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. The AWC asserts that Jeremiah Roman was first registered in 2014 with FINRA member firm PFS Investments Inc. In accordance with the terms of the AWC, FINRA imposed upon Roman a $5,000 fine and a four-month suspension from associating with any FINRA member in all capacities. As alleged in part in the AWC:

From September 2020 to June 2021, PFSl's written supervisory procedures (WSPs) required registered representatives to notify and obtain the firm 's written approval before engaging or participating in any private securities transaction outside the regular course or scope of their firm-related duties, including personal investments.

During that time period, Roman entered into eight merchant cash advance agreements with Company A. The total principal value of his investments was $44, 100. Roman's agreements with Company A, which provided that Roman would receive a monthly payment in a specified amount in return for each of his investments. were securities. Roman did not make his personal investments through PFSI, and did not provide the firm with written notice of them before signing the agreements with Company A.

In March and April 2021, Roman also solicited a firm customer to invest in Company A. Roman introduced the customer to Company A, provided the customer with marketing materials prepared by Company A, and facilitated the exchange of information between the customer and Company A. The customer ultimately invested a total of $150,000 through three merchant cash advance agreements with Company A. Roman did not disclose his participation in the customer's investments to PFSI, even though he was advised by the firm's compliance hotline to disclose his Company A-related activities for review.

Roman also falsely attested on one annual compliance questionnaire that he had not participated in any private securities transactions that had not been approved by the firm.

Therefore, Roman violated FINRA Rules 3280 and 2010.