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SEC-FINRA Defense Blog
The Securities and Exchange Commission last week filed fraud charges against Andrew J. Kandalepas, CEO of Wellness Center USA, Inc., a Chicago-based company.  In its complaint, the SEC alleged that Kandalepas manipulated the company’s stock and made false statements in the company’s SEC filings and press releases. Specifically, the SEC claims that Kandalepas misappropriated $450,000 in unauthorized withdrawals from the company and then covered his misconduct by...
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The Securities and Exchange Commission (SEC) recently charged a former Equifax Chief Information Officer of a U.S business division with engaging in illegal insider trading ahead of Equifax’s September 2017 announcements of a massive data breach. The SEC’s complaint alleged that Jun Ying, who was next in line to become Equifax’s Global CIO, used confidential,nonpublic...
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FINRA recently censured Huntleigh Securities Corporation and ordered it to pay $98,252.33, plus interest, in restitution to customers pursuant to an AWC (Acceptance, Waiver and Consent) settlement. The firm was also required to review and amend, as necessary, its written supervisory procedures (WSPs) and compliance policies. With neither admitting nor denying the findings, the firm...
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FINRA has censured and imposed a $250,000 fine upon City National Securities, Inc., a registered broker-dealer located in Beverly Hills, California. With neither admitting nor denying the findings contained in the FINRA AWC (Acceptance, Waiver and Consent), the firm consented to findings that it failed to supervise certain registered representatives to ensure their compliance with FINRA rules involving outside business activities, private securities...
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The Securities and Exchange Commission recently filed civil charges against a former employee of International Rectifier Corporation (IRC) and his friend for trading on material, nonpublic information in advance of the company’s acquisition. ​The SEC alleges that Lanny Brown knew that Infineon Technologies AG intended to acquire his then-employer, IRC, before the deal was publicly released.  Brown then tipped his friend,...
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More SEC Adviser Exams Projected for 2017 and 2018 An article published in InvestmentNews on November 4, 2017, reported that the Chairman of the Securities and Exchange Commission (SEC), Jay Clayton, intends to increase the number of financial adviser examinations conducted by the SEC each year, thus enabling the securities law enforcement agency’s examination division...
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How to Respond to a SEC Wells Notice The Securities and Exchange Commission’s (SEC) Division of Enforcement is responsible for enforcing the federal securities laws. The Enforcement Division performs this function through its investigations and, if evidence is developed in the investigation that would support filing charges, through the SEC’s filing of cases either in...
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The Securities and Exchange Commission has filed a civil enforcement action against a Philadelphia, Pennsylvania  based hard money lender, Paul Singer, and his company, Singer Financial Corp., alleging an illegal and unregistered offering of securities to the investing public. In its complaint, the SEC asserts that Singer and his company raised around $4.5 million from approximately 70 investors in an unregistered offering of unsecured promissory notes.  The...
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The Securities and Exchange Commission secured entry of a Final Judgment against Robert H. Bray for his alleged insider trading in a bank stock.  The final judgment permanently enjoins Bray from future violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and orders him to pay almost $300,000 in disgorgement,...
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Lying to the Securities and Exchange Commission is a dangerous game with potentially high-stakes consequences.  An obvious proposition, but all too often ignored by those who don’t understand that it is infinitely better to stay silent and invoke the Fifth Amendment rather than to speak and inadvertently create new, potentially more serious legal liabilities for themselves. Case in point: the federal...
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