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Old Memories Resurface in Scam

Multiple investors were cheated out of $131 million by buying stock in a worthless LED lighting distributor, by another former Stratton Oakmont broker. You all know about the old story involving the Long Island boiler room where investors got rich on scams. “Wolf of Wall Street” made this firm famous along with its infamous founder Jordan Belfort. Christopher Castaldo, a former Stratton Oakmont broker was charged with helping investors believe a company named ForceField Energy Inc. was worth multi millions. In actuality, it had “essentially no business operations and very little revenue, making the stock worthless,” according to Attorney Robert Capers statement. How the Scam was Ran The ringleader...

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Variable Annuity Penalty Costs Record $25 Million

The Financial Industry Regulatory Authority (FINRA) levied a record $25 million penalty against MetLife Inc., who agreed to settle a bevy of abuses tied directly to variable annuities. $5 million of that fine, is due to be paid to customers for negligent misrepresentation and omissions, according to Finra statement. MetLife, the largest U.S. life insurer has neither accepted responsibility nor denied any wrongdoing. Finra’s chief of enforcement Brad Bennett, stated “Variable annuities are complex and expensive products that are routinely pitched to vulnerable investors as a key component of their retirement planning. Firms engaging in this business must ensure that the information on the costs and benefits of...

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Money Laundering Scheme Ends With Finra Ban

James Van Doren was barred by Finra for deceiving creditors who were trying to recoup assets from a friend’s business. Van Doren, who was sentenced to 15 months in prison from related charges, was found guilty of laundering by helping a childhood friend conceal assets when financial agreements were not met. Laundering Scheme Unveiled Finra stated that Van Doren was given $30,000 in cash in a briefcase and a total of $732,000 over the course of three separate payments to help conceal debt money owed to creditors. He later on returned most of money while keeping some to help offset a few financial losses he incurred. Charges by...

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NJ Couple Faces Prison, Civil Fine Over Alleged Ponzi Scheme

By Jeannie O'Sullivan of law360.com Law360, Jersey City (May 27, 2016, 2:23 PM ET) -- A New Jersey couple who purportedly owned a hedge fund was hit with criminal charges and a hefty civil penalty Friday for allegedly collecting money from two dozen investors and spending it on a lavish lifestyle as part of a Ponzi scheme that netted nearly $600,000 from victims. Husband and wife Alcibiades Cifuentes, 33, and Jennifer Wee Cifuentes, 35, of West New York, New Jersey, were scheduled to appear before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court Friday afternoon to answer to charges of...

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Jump In Securities Class Action Settlements

Cornerstone Research has reported that a total of $3 billion worth of securities class-action settlements occurred in 2015, involving 80 cases – a 184 percent increase over the previous year. Last year there were eight “mega settlements” – cases with a value at $100 million or more – compared with only one in 2014. In 2015, there were more cases featuring very high estimated damages. Average estimated damages rose 151 percent from 2014. The average settlement increased in size from $17 million in 2014 to $37.9 million in 2015. The proportion of securities class action settlements involving financial sector firms was lower...

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SEC Hands Industry Bar To Pa. Ponzi Schemer

By Carmen Germaine of law360.com Law360, New York (April 25, 2016, 7:02 PM ET) -- A broker who pled guilty in Pennsylvania federal court to bilking at least $3.2 million from investors through fake certificates of deposit has agreed to be barred from associating with broker-dealers, the U.S. Securities and Exchange Commission announced Monday. Malcolm Segal, 69, agreed to be barred from associating with brokers, dealers, investment advisers and other financial firms and from participating in penny stock offerings in administrative proceedings with the SEC after pleading guilty in February to running a fraudulent scheme that stole more than $3.2 million from...

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JPMorgan Units Pay $1M FINRA Fine Over Unsent Letters

By Carmen Germaine of law360.com Law360, New York (April 25, 2016, 3:26 PM ET) -- J.P. Morgan Securities LLC and J.P. Morgan Clearing Corp. have agreed to pay just over $1 million to settle Financial Industry Regulatory Authority allegations they failed to send a number of required letters to customers and didn’t properly supervise employees’ outside accounts. According to the letter of acceptance, waiver and consent accepted by FINRA on Friday, JPMS committed a number of violations arising from supervisory and recordkeeping deficiencies, while JPMorgan Clearing Corp. failed to send over a million privacy notices to account holders as required by the...

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SEC Whistleblower Award Total Rises To $10M For Past Week

By Stewart Bishop of law360.com Law360, New York (May 20, 2016, 10:15 PM ET) -- The U.S. Securities and Exchange Commission on Friday said it will jointly pay over $450,000 to a pair of whistleblowers for a tip that led the agency to launch a corporate accounting investigation, and for their assistance with the probe, bringing the past week’s award total to $10 million. The latest award comes days after the SEC announced it would pay a former company employee who tipped the regulator to potential violations between $5 million and $6 million — the third-largest award to date under the SEC's...

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TD Ameritrade Added To $350M Ponzi Suit Naming Sidley

By Suevon Lee of law360.com Law360, Los Angeles (May 19, 2016, 9:11 PM ET) -- TD Ameritrade Inc. and Integrity Bank & Trust were added Thursday to a proposed class action against Sidley Austin LLP, Deloitte & Touche LLP and others alleging the firms are liable for aiding an Oregon investment group as it allegedly misled investors in what regulators have called a $350 million Ponzi scheme. The April 4 complaint by a group of California and Oregon-based investors against Sidley, Oregon law firm Tonkon Torp. and accounting firms Deloitte and EisnerAmper LLP said the firms are responsible for losses investors suffered...

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Brothers Hit With $2.2M Judgment Over RE Ponzi Scheme

By Shayna Posses of law360.com Law360, New York (March 30, 2016, 4:30 PM ET) -- A New Jersey federal judge on Wednesday ordered two brothers to fork over more than $2.2 million in a U.S. Securities and Exchange Commission suit alleging they duped investors out of millions through a sham real estate investment firm as part of a Ponzi scheme. U.S. District Judge Mary L. Cooper issued final judgment against Matthew Rivera, 48, of Saylorsburg, Pennsylvania, and Daniel Rivera, 46, of Staten Island, New York, for allegedly running a scam in which the latter brother told investors they would share in the...

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