SEC Charges Wade James Lawrence with Unauthorized Trading and Fraud

The Securities and Exchange Commission recently announced that it charged Wade James Lawrence, a former investment adviser  with executing unauthorized trades in his clients’ investment accounts and defrauding other individuals who tried to invest their money with him.The SEC’s complaint, filed in federal court in Texas, alleges that:

  • Starting in 2010 while employed at the first firm, Lawrence executed unauthorized trades in speculative, high-risk securities in several of his clients’ accounts.
  • After joining the other firm in August 2011, Lawrence continued to place unauthorized trades of risky securities in his clients’ accounts.
  • Between 2010 and 2013, Lawrence’s clients lost at least $2 million due to his improper and unauthorized trading.
  • Lawrence fraudulently obtained approximately $480,000 from at least five individuals by claiming that he could trade securities for them at prices lower than those available to the general public and in securities that were not otherwise available to individual investors.
  • Immediately after receiving the investors’ funds, Lawrence used most of the money for personal expenditures and to repay personal debts, while returning a portion of the funds disguised as investment profits.

In a related action, on August 25, 2015, Lawrence pleaded guilty to fraud charges and, on January 20, 2015 was sentenced to 36 months imprisonment, ordered to pay $1,454,384.48 in restitution, and ordered to forfeit $126,074.10 as a result of his conduct.

Lawrence has agreed to settle the SEC’s action by consenting to a court order that enjoins him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940; orders him to disgorge $458,700 plus prejudgment interest of $32,101.13, but deems payment of these amounts satisfied by the entry of the criminal restitution and forfeiture orders; and does not order the payment of a civil penalty based in consideration of his criminal conviction and 36-month sentence. The settlement is subject to court approval.

Lawrence was previously registered with:

08/2011 – 12/2013 SOUTHWEST SECURITIES, INC. (CRD# 6220) – DALLAS, TX

06/2008 – 07/2011 OPPENHEIMER & CO. INC. (CRD# 249) – FORTH WORTH, TX
If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options. The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.
Categories: Broker Fraud, Broker Investigations, and Investor Protection.

Attention Purchasers of IceWEB, Inc. (IWEB)

The Financial Industry Regulatory Authority (FINRA) announced that it barred broker George Johnson from the securities industry for engaging in a manipulative trading scheme to artificially inflate the market price and trading volume for the common stock of IceWEB, Inc. (OTCBB: IWEB). FINRA also sanctioned Christopher Wynne, Johnson’s supervisor, suspending him for two years in all capacities, barring him in a principal capacity, and fining him $25,000. Joseph Mahalick, another broker who worked with Johnson and Wynne, was suspended for six months and fined $20,000 for falsifying firm records and has been barred from the securities industry in a separate action. Johnson, Wynne and Mahalick all worked for Meyers Associates L.P. in that firm’s Chicago branch office during the time period of the misconduct.

FINRA found that over an eight-day period, Johnson manipulated the market for IWEB by recommending that certain of his customers buy at increasingly higher and artificially inflated prices while also recommending his other customers sell their shares, frequently matching trades between the customers. FINRA found that among Johnson’s motives for manipulating the stock was the fact that he wanted to obtain business from the issuer for which he would anticipate receiving compensation in connection with a future private offering. Johnson coordinated a campaign with a stock promoter to attempt to increase the stock’s share price to a level that would allow for the exercise of certain warrants.

FINRA also found that Johnson and Wynne sent customers IWEB sales materials that omitted information concerning material conflicts of interest and material risks concerning IWEB’s business, and contained misleading, exaggerated and unwarranted information. Moreover, Johnson disclosed confidential information to potential purchasers concerning another offering.

In addition to the IWEB scheme, FINRA found that Johnson committed fraud by recommending that certain of his customers purchase shares of another penny stock without disclosing to them that he was liquidating his own personal positions of the security from his own brokerage accounts.

In addition, FINRA’s investigation found that to cover up Johnson’s violations of state securities registration requirements, Johnson, Mahalick and Wynne agreed to the practice of entering false information on more than 100 order memoranda, indicating that Wynne or Mahalick was responsible for the account or transactions, instead of Johnson.

In settling this matter, Johnson, Wynne and Mahalick neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options. The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

Categories: Broker Fraud and Investor Protection.

Federal Court Orders Cindy and Paul Vandivier to Pay Civil Monetary Penalties and Restitution of Almost $3 Million to Settle CFTC Charges of Operating an Illegal, Off-Exchange Precious Metals Scheme

The Vandiviers Were also Charged with Misappropriating Virtually All of Customer Funds, Using the Money for Office and Personal Expenses

Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Consent Order imposing a permanent injunction against CFTC Defendants Cindy Vandivier and Paul Vandivier of Coconut Creek, Florida. The Court’s Order requires the Vandiviers to each pay a $1 million civil monetary penalty and jointly to pay $986,763 in restitution to defrauded customers to settle CFTC charges of fraudulently soliciting customers and misappropriating customer funds in connection with illegal, off-exchange transactions in precious metals. Cindy Vandivier is the wife of Paul Vandivier.

The Order, entered on February 5, 2016, by Judge William J. Zloch of the U.S. District Court for the Southern District of Florida, also imposes permanent trading and registration bans on the Vandiviers and prohibits them from further violations of the anti-fraud and off-exchange trading provisions of the Commodity Exchange Act and CFTC Regulations, as charged.

The Order arises out of a CFTC Complaint filed on May 12, 2014. The Complaint charged the Vandiviers and their company, Mintline, Inc., with fraudulently soliciting retail customers and misappropriating customer funds in connection with illegal, off-exchange transactions in precious metals, from July 2011 to at least April 2013 (see CFTC Complaint and Press Release 6934-14). The CFTC’s litigation against Mintline is still ongoing, as Mintline is currently in default in this action, awaiting the entry of a default Order by the Court.

According to the Order, the Vandiviers, through Mintline, solicited retail customers throughout the United States to purchase physical metals on a leveraged, margined, or financed basis. The Order finds, however, that contrary to what customers were led to believe, the Vandiviers did not purchase, sell, transfer ownership of, deliver, or arrange for storage of any physical metals in connection with the financed metals transactions. Instead, according to the Order, they misappropriated most, if not all, of customers’ funds to pay Mintline’s operating expenses and to pay for personal expenses, including animal, automobile, communication, employee, medical, and shopping expenses. As a result of the Vandiviers’ fraudulent activities, Mintline’s customers lost a total of $986,763, according to the Order.

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options. The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

Categories: Commodities Fraud.

CFTC Charges Dania Beach, Florida Resident Rico Omar Cox with Commodity Trading Advisor Fraud

Cox allegedly used websites such as Craigslist to fraudulently solicit approximately $500,000 from investors

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced that it filed a civil injunctive anti-fraud enforcement action in the U.S. District Court for the Southern District of Florida against 29-year-old Rico Omar Cox (aka Omar Negron) of Dania Beach, Florida. The CFTC Complaint charges that, beginning in at least August 2010 through March 2015, Cox fraudulently solicited his trading services for managed commodity futures accounts, and lost most of the $499,000 he traded for or on behalf of at least nine clients.

The Complaint charges that Cox created and distributed promotional materials to prospective clients that intentionally or recklessly contained materially false and misleading statements and failed to disclose material facts, including making false claims about his experience and success as a trader. After losing almost all of the investors’ funds trading, he provided some investors with false account statements to hide the losses, the Complaint also charges.

Specifically, Cox allegedly fraudulently solicited prospective customers on websites such as Craigslist and falsely claimed that he had been a successful full-time futures trader for years and made thousands of dollars and/or returns of 10 percent to 40 percent daily. As alleged, Cox also provided fraudulent trading account statements as part of a false track record that materially overstated his trading profitability and success. Cox allegedly created and distributed to customers false daily account statements and/or screen shots that showed trading profits and account cash balances, when in reality, excluding client withdrawals of approximately $117,000, Cox lost no less than $381,000 – virtually all of the remaining funds – trading those accounts using his clients’ login credentials.

Cox allegedly failed to disclose that he had felony convictions in 2013

In addition, Cox failed to disclose that he had felony convictions in 2013 for fraud, grand theft, and acting as an unlicensed mortgage broker, and he failed to register with the CFTC as a Commodity Trading Advisor, as required, according to the Complaint.

In its continuing litigation, the CFTC seeks a permanent injunction from future violations of federal commodities laws, permanent registration and trading bans, disgorgement of ill-gotten gains, and civil monetary penalties.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options. The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

Categories: Commodities Fraud.

Worth Group Inc. Sanctioned

Federal Court Orders Florida-Based Worth Group Inc. and Its Principals, Andrew Wilshire and Eugenia Mildner, to Pay $2.5 Million in Sanctions for Illegal Off-Exchange Precious Metals Scheme

Defendants Ordered to Comply with the Law of the Eleventh Circuit for all Financed Transactions and Show Delivery of Physical Metal to the Customer or the Customer’s Depository Results within 28 Days

The U.S. Commodity Futures Trading Commission (CFTC) announced  that the U.S. District Court for the Southern District of Florida entered a Consent Order of Permanent Injunction against Defendants Worth Group Inc. (Worth) of Jupiter, Florida, and its owner and operator, Andrew Wilshire of Jupiter, Florida, and Wilshire’s sister, Eugenia Mildner also of Jupiter, Florida, who served as Worth’s sole officer and director prior to February 2012. The Order requires the three Defendants to immediately comply with the law governing their financed precious metals transactions and to pay restitution of $1,250,000. Defendants Worth and Wilshire are also required to pay a civil monetary penalty $1,250,000.

The Court’s Order stems from the CFTC Complaint filed on August 13, 2013, that charged Defendants with defrauding retail precious metals customers and engaging in illegal, off-exchange retail commodity transactions (see CFTC Press Release 6666-13, August 13, 2013). According to the CFTC Complaint, Worth sells physical precious metals – specifically gold, silver, platinum and palladium – to individual retail customers throughout the United States on both a financed basis (financed transactions), in which customers pay a portion of the purchase price and finance the remainder through loans from Worth, and on a fully-paid basis (fully-paid transactions), in which customers pay the full purchase price for precious metals. In all financed transactions, it is Worth’s obligation to deliver precious metals to its customers within 28 days.

For fully-paid transactions, the Complaint charged that Defendants falsely represented that Worth would purchase and store precious metals, when in fact Worth merely covered its obligations through unallocated spot forward contracts with third parties. For financed transactions, the Complaint charged Defendants with engaging in illegal and fraudulent off-exchange transactions, in that Worth failed to timely deliver precious metals for a significant percentage of financed transactions, yet charged interest and storage fees when no metal had been purchased.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), financed precious metals transactions must be conducted on an exchange, unless the entity offering the transactions – such as Worth – can establish that actual delivery of physical metal results within 28 days. As one federal court of appeals recognized in connection with another precious metals fraud case brought by the CFTC, “actual delivery” requires a transfer of “possession and control” and giving “real and immediate possession to the buyer or the buyer’s agent.” CFTC v. Hunter Wise Commodities LLC, 749 F.3d 967, 978-79 (11th Cir. 2014).

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options. The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (866) 318-4725 for a complimentary initial consultation

Categories: Commodities Fraud.

CFTC Charges Florida Based Oakmont Financial

CFTC Charges Florida-Based Oakmont Financial, Inc. and Joseph Charles DiCrisci with Engaging in Illegal, Off-Exchange Precious Metals Transactions

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Defendants Oakmont Financial, Inc. (Oakmont) of Boynton Beach, Florida, and Joseph Charles DiCrisci of New York, New York, an Oakmont owner and principal. The CFTC Complaint charges the Defendants with engaging in illegal, off-exchange transactions in precious metals with retail customers on a leveraged, margined, or financed basis. The Complaint further alleges that DiCrisci managed, or controlled those who controlled, the day-to-day operations of Oakmont, and therefore, as controlling person for Oakmont, is liable for Oakmont’s violations of the Commodity Exchange Act (CEA).

According to the Complaint, from at least July 16, 2011, and continuing through at least July 27, 2012, Oakmont, by and through its employees, solicited retail customers by telephone to engage in leveraged, margined, or financed precious metals transactions. During that period, Oakmont collected at least $2,308,228 from at least 107 customers in connection with precious metals transactions and, of this amount, received commissions and fees totaling at least $735,329. The Complaint also alleges that Oakmont accepted customer orders and funds and therefore acted as a Futures Commission Merchant (FCM), but failed to register with the CFTC as an FCM, as required.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, leveraged, margined, or financed transactions, such as those conducted by Oakmont, are illegal off-exchange transactions unless they result in actual delivery of metals within 28 days. The Complaint alleges that metals were never actually delivered in connection with the leveraged, margined, or financed precious metals transactions made on behalf of Oakmont’s customers.

The Complaint also alleges that Oakmont executed the illegal precious metals transactions through Hunter Wise, LLC (Hunter Wise). The CFTC filed an enforcement action against Hunter Wise on December 5, 2012, charging it and other Defendants with engaging in illegal, off-exchange precious metals transactions, and charging Hunter Wise with fraud and other violations (see CFTC Press Releases 6447-12).

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options. The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

 

Categories: Commodities Fraud.

Attention Investors in American Growth Fund II

SEC Charges Lending Company and Brokerage Firm with Fraud

On February 3, 2016, the Securities and Exchange Commission charged a Manhattan-based lending company and its owner with repeatedly lying to investors purchasing high-yield securities. The SEC also charged the brokerage firm that acted as the placement agent and two of its executives.

The SEC alleges that American Growth Funding II LLC and Ralph Johnson promised investors 12-percent annual returns and falsely claimed its financial statements were being audited each year. AGF II, which raises capital from investors to provide loans to businesses, also made misrepresentations in offering documents about its management and concealed details about deteriorating loan values that could imperil full payment of the promised returns to investors. The company’s placement agent Portfolio Advisors Alliance and its owner Howard Allen and president Kerri Wasserman allegedly knew the offering documents were inaccurate yet continued using them to solicit sales of AGF II securities.

According to the SEC’s complaint filed in federal district court in Manhattan:

In a private placement offering, AGF II raised approximately $8.6 million from investors from March 2011 to December 2013.

The company represented in offering documents that its financial statements had been audited and would continue to be audited each fiscal year. Johnson knew this statement was false. No audit of AGF II’s financials occurred until 2014.

The offering documents represented that AGF II was governed by a Board of Managers comprised of Johnson and two other individuals when, in fact, the two individuals never agreed to serve in any managerial capacity.

Johnson caused AGF II to send out monthly account statements to investors that concealed the precariousness of its business. The company failed to disclose that it could not have possibly paid investors their stated account balances because the majority of AGF II’s loans were likely uncollectible at the time.

While PAA acted as the placement agent, Allen became aware by no later than June 2012 that AGF II’s offering documents were not accurate. But he continued using them to solicit investors without informing them the financial statements were unaudited.

Allen informed Wasserman that AGF II’s offering documents contained false information, but Wasserman took no action and the firm’s brokers continued using misleading documents to solicit investors.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options. The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

Categories: Broker Fraud and Investor Protection.

FINRA Bars Lakeland Florida Broker Christopher Norris

Christopher Lawrence Norris (CRD #4007080, Lakeland, Florida) submitted an AWC in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Norris consented to the sanction and to the entry of findings that he misappropriated $19,873.19 from a property owners association for which he served as a treasurer and sat on its board of directors. The findings stated that Norris misappropriated the funds by forging another property owners association board member’s name on a property owners association check made payable to Norris. Norris’ position as treasurer afforded him access to the property owners association’s check book and bank accounts. The findings also stated that Norris failed to appear for FINRA on-therecord testimony. (FINRA Case #2015045744402)

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options.  The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide.  If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses.  Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

Categories: Broker Investigations.

FINRA Bars Cooper City Broker Daniel Kasbar

Daniel George Kasbar (CRD #5869994, Cooper City, Florida) submitted an AWC in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Kasbar consented to the sanction and to the entry of findings that he failed to provide FINRA with requested documents and information during its investigation into allegations that he engaged in an outside business activity beyond the scope of the approvals provided by his member firms. (FINRA Case #2015045744901)

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options.  The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide.  If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses.  Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

Categories: Broker Investigations.

FINRA Fines and Suspends Winter Park Broker Anthony Arthur Grey

Anthony Arthur Grey (CRD #709788, Winter Park, Florida) was fined $30,000, suspended from association with any FINRA member in any capacity for 18 months and required to disgorge $15,750, plus pre-judgment interest, to FINRA. The sanctions were sustained by the Securities and Exchange Commission (SEC) following appeal of a National Adjudicatory Council (NAC) decision. The sanctions were based on findings that Grey willfully engaged in undisclosed interpositioning, charged unfair prices and excessive mark-ups, and engaged in fraud. The findings stated that Grey violated MSRB Rules G-17 and G-30, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Because Grey’s violations were willful, he is statutorily disqualified. The suspension is in effect from November 2, 2015, through May 1, 2017. (FINRA Case #2009016034101)

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Law Offices of Place & Hanley, LLC to discuss your legal options.  The Law Offices of Place & Hanley, LLC is dedicated to helping investors nationwide.  If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses.  Contact our office toll free at (866) 318-4725 for a complimentary initial consultation.

Categories: Broker Investigations.