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  • SEC Charges Advisory Firm With Fraud for Improperly Retaining Fees

    The Securities and Exchange Commission today announced that an investment advisory firm in Philadelphia has agreed to pay more than $21 million to settle charges that it fraudulently retained fees belonging to collateralized debt obligation (CDO) clients.

    An SEC investigation found that Taberna Capital Management did not tell CDO clients it was retaining payments known as “exchange fees” in connection with restructuring transactions.   Taberna’s retention of the exchange fees was neither permitted by the CDOs’ governing documents nor disclosed to investors in the CDOs.  The fees rightfully belonged to the CDOs and created conflicts of interest that Taberna failed to disclose.

    The SEC also charged Taberna’s former managing director Michael Fralin and former chief operating officer Raphael Licht for their roles in certain aspects of Taberna’s misconduct.

    “CDO managers have an obligation to act in the best interests of their CDO clients and communicate fairly with them.  Taberna secretly diverted funds owed to...

  • SEC Halts Ongoing Fraud in Minnesota

    The Securities and Exchange Commission today announced fraud charges and an emergency order to halt a Minnesota resident and his company from continuing to raise money from investors under false pretenses while failing to produce the promised returns.

    The SEC alleges that James M. Louks of Owatonna, Minn., and FiberPoP Solutions Inc. have defrauded nearly 100 investors by convincing them to invest in notes that would theoretically help fund the company’s operations.  FiberPoP was founded in 2003 to build and operate fiber optic networks and data centers, but still has no operations or employees.  Louks and FiberPoP promised massive returns on the investments – as much as 100 percent – within a very short period of time.  Typically the investments they have been peddling bear the hallmarks of prime bank schemes, which tout secrecy and involve exaggerated returns in supposedly complex financial instruments that turn out to be fictitious.

    According to the...

  • Fee Rate Advisory #1 for Fiscal Year 2016

    The Securities and Exchange Commission announced that in fiscal year 2016 the fees that public companies and other issuers pay to register their securities with the Commission will be set at $100.70 per million dollars.

    The securities laws require the Commission to make annual adjustments to the rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e) and 14(g) of the Securities Exchange Act of 1934.  The Commission must set rates for the fees paid under Section 6(b) to levels that the Commission projects will generate collections equal to annual statutory target amounts.  The Commission’s projections are calculated using a methodology developed in consultation with the Congressional Budget Office and the Office of Management and Budget. The statutory target amount for fiscal year 2016 is $550 million.  The annual adjustment to the fee rate under Section 6(b) also sets the annual adjustment to...

  • SEC Charges Former Investment Bank Analyst and Two Others With Insider Trading in Advance of Client Deals

    The Securities and Exchange Commission today charged a former investment bank analyst with illegally tipping his close friend with confidential information about clients involved in impending mergers and acquisitions of technology companies.  The SEC also charged his friend and another individual with trading on the inside information.

    The SEC alleges that Ashish Aggarwal, who worked in J.P. Morgan’s San Francisco office, gleaned sensitive nonpublic information about two acquisition deals from colleagues who were working on them.  Aggarwal tipped Shahriyar Bolandian, who traded on the basis of the illegal tips in his own accounts as well as accounts belonging to his father and sister.  Bolandian also tipped his friend Kevan Sadigh so he could trade on the confidential information.  Bolandian worked at Sadigh’s e-commerce company, and together they made more than $672,000 in combined profits from their insider trading. 

    The SEC Enforcement Division’s Market Abuse Unit detected the insider trading through trading data...

  • SEC Announces Asset Freeze Against Alleged EB-5 Fraudster in Seattle Area

    The Securities and Exchange Commission today announced an asset freeze obtained against a man in Bellevue, Wash., accused of defrauding Chinese investors seeking U.S. residency through the EB-5 Immigrant Investor Pilot Program by investing in his companies.

    The SEC alleges that Lobsang Dargey and his “Path America” companies have raised at least $125 million for two real estate projects: a skyscraper in downtown Seattle and a mixed-use commercial and residential development containing a farmers’ market in Everett, Wash.  But Dargey diverted $14 million for unrelated real estate projects and $3 million for personal use including the purchase of his $2.5 million home and cash withdrawals at casinos.

    “We allege that Dargey promised investors their money would be used to develop specific real estate projects approved under the EB-5 program, but he misused millions of dollars to enrich himself and jeopardized investors’ prospects for U.S. residency,” said Jina L. Choi, Director of the...

SEC Press Releases