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Securities Fraud

U.S. Takes Down Call-Center Financial Scam

Officials allege people impersonating IRS, immigration officials extracted more than $250 million from victims By Miriam Jordan of The Wall Street Journal Federal authorities said Thursday they had dismantled a massive call-center scheme perpetrated by individuals in the U.S. and India who bilked thousands of Americans out of hundreds of millions of dollars by posing as Internal Revenue Service and Department of Homeland Security officials. An 81-page indictment names 56 people in the U.S. and India and five call centers in Ahmedabad, India, allegedly involved in the fraud. They were charged in a Texas federal district court in Houston with crimes including impersonation...

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Florida Man Gets 17 Years For Currency Trading Fraud Scheme

A Florida man was sentenced Tuesday in Miami to more than 17 years in federal prison for duping about 300 investors out of millions of dollars through a phony currency trading firm before cashing out and fleeing to Panama. U.S. District Judge Patricia A. Seitz ordered Michael John Alcocer Roa, 34, of Kissimmee, Florida, to serve 210 months in prison, followed by three years of supervised release. A federal jury convicted Alcocer of five counts of wire fraud following a trial in April over the operation of his company Inovatrade Inc., which he set up in 2008 and ran until 2011,...

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SEC sets record in enforcement actions against investment advisers

Uptick in adviser crackdown attributed to better data analytics and agency's new unit focused on asset management By Mark Schoeff Jr. of InvestmentNews.com The Securities and Exchange Commission filed a record number of enforcement cases against investment advisers and investment companies over the last year, the agency announced Tuesday. The SEC pursued 160 cases against advisers and firms, including 98 that were standalone — as opposed to follow-up actions or cases based on delinquent regulatory filings. Both numbers are records, the SEC said. The enforcement statistics for fiscal 2016 include the period from Oct. 1, 2015, through Sept. 30. The SEC also filed a record number of...

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SEC Charges Adviser Over Cherry-Picking Trades

By Carmen Germaine of Law360.com The U.S. Securities and Exchange Commission on Tuesday filed an in-house suit alleging a Hawaii-based investment adviser cherry-picked profitable trades for himself instead of clients' accounts and falsely claimed he wouldn't "double dip" on management and advisory fees. The SEC's suit, filed in its administrative forum, alleges Laurence I. Balter and his Kihei, Hawaii-based firm Oracle Investment Research violated securities laws by making trades for both Balter and Oracle clients in one omnibus account, cherry-picking profitable trades for Balter's account and assigning unprofitable transactions to clients. Jina L. Choi, the director of the SEC’s San Francisco regional office,...

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Royal Bank Unit Aided $123M ATM Ponzi Scheme, Suit Says

By Suevon Lee of Law360.com Royal Bank of Canada and a Los Angeles-based banking subsidiary have been sued in California state court for negligence and other claims by dozens of individual investors alleging a bank officer enabled a $123 million Ponzi scheme through an ATM machine leaseback program operated by the in-receivership Nationwide Automated Systems Inc. City National Bank NA, the Southern California bank that merged with RBC in November 2015, is accused in the Friday lawsuit of aiding and abetting through branch manager Brian Patrick Fitzwilliam a long-running scheme that bilked many investors, including senior citizens, of $123 million through the...

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Paving Stone Co. Head Gets 10 Years For $26M Ponzi Scheme

By Stewart Bishop of Law360.com A New York man on Friday was sentenced to over 10 years in prison for running a $26 million Ponzi scheme through a purported paving stone company, in a case that has also ensnared a former U.S. Securities and Exchange Commission attorney accused of aiding the scheme. Eric Aronson, 48, the founder and head of PermaPave Industries LLC and PermaPave USA Corp., was sentenced to 124 months in prison and ordered to forfeit $26 million after pleading guilty in September 2014 to securities fraud. Aronson was charged along with former SEC counsel and current private attorney Fredric Aaron,...

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Charlestown, Indiana man pleads guilty in securities fraud case

Richard Collins ordered to pay $250,000, sentenced to prison By Elizabeth Depompei of newsandtribune.com A Charlestown man was ordered to pay $250,000 in restitution after pleading guilty in a securities fraud case Monday. Richard Collins was president of R.C. Vision Quest in Jeffersonville, where he reportedly sold unregistered securities without being licensed to do so, a violation of the Indiana Uniform Securities Act. According to a July news release from the Indiana Secretary of State, Collins made cold calls to investors in North Carolina and Virginia and promised them high returns for investing. Collins reportedly advertised his business as being religion-based and all of...

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Indiana awards whistleblower $95K with more whistleblowers likely in financial advice sector

Earlier this month, Indiana announced its first whistleblower award, giving $95,000 to a former JP Morgan official who helped the state's regulators make an advice-related case against the firm that resulted in a $950,000 settlement. The informant showed how the firm failed to make proper disclosures to clients about proprietary funds in discretionary accounts. The whistleblower exposed JP Morgan for putting its interests before its clients. Federal and state securities regulators are relying more on firm insiders to uncover wrongdoing. As a result, the investment advice sector may find itself more vulnerable to whistleblowing. The Securities and Exchange Commission has been awarding...

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Day Traders Think They Can Win in Online Ponzi Schemes

Software makers and speculators help to keep $47 million a year flowing through a world of fraudulent investment schemes. By Eduardo Thomson and Janan Hanna of Bloomberg.com It’s the financial equivalent of a game of chicken: Put money into a likely Ponzi scheme, get paid for a while, and then try to get out before the collapse. That’s how some people seem to be using online “high-yield investment programs,” or HYIPs. The sites promise ludicrous returns—the equivalent of 1,000 percent or more annually—based on vague investment plans involving, say, bitcoin or currency trading. In reality, many are just passing money from new investors...

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Adviser Who Targeted Elderly In Ponzi Scheme Gets 5 Years

By Diana Novak Jones of Law360.com A financial adviser convicted of running an 8-year, $4.2 million Ponzi scheme was sentenced to five years in prison Thursday after several of her victims spoke about how she selected elderly and ill people to defraud. In addition to the prison sentence, Delores Mosier was ordered to pay nearly $3 million in restitution to her victims, which included friends who had known her for decades and elderly people she met more recently. Mosier convinced them to invest their retirement savings with her in something she called Chicago Anticipatory Notes — but the money ended up deposited...

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