SEC Charges Brooklyn Man for Facilitating Insider Trading Scheme Via Post-It Notes at Grand Central Terminal
The Securities and Exchange Commission today charged a Brooklyn man with facilitating a $5.6 million insider trading scheme that typically involved the passing of illegal tips via napkins or post-it notes at Grand Central Terminal.
Earlier this year, the SEC charged a stockbroker and a law firm managing clerk with insider trading and alleged they were connected by a mutual friend who served as a “middleman” in an effort to keep the two unlinked. In a separate complaint filed today in U.S. District Court for the District of New Jersey, the SEC identifies Frank Tamayo as that middleman. The SEC alleges that Tamayo received material nonpublic information from Steven Metro about 13 impending corporate deals involving clients of the law firm where Metro worked. Tamayo then tipped his stockbroker Vladimir Eydelman, who used the confidential information to illegally trade for himself and for Tamayo and other customers. Tamayo allocated a...
Jim Burns, Deputy Director of Trading and Markets, to Leave SEC
The Securities and Exchange Commission today announced that James R. Burns, Deputy Director in the Division of Trading and Markets, will leave the agency in October.
Since 2012, Mr. Burns has overseen core regulatory functions within the division, including market supervision, analytics and research, derivatives policy and trading practices, and the chief counsel and enforcement liaison offices.
“During his tenure at the Commission, Jim provided valuable leadership on important rulemaking and policy initiatives. His unwavering commitment to the investing public and his commitment to promoting strong capital markets served the agency well,” said Chair Mary Jo White.
“Jim played an instrumental role in the Division of Trading and Markets’ work on numerous rulemakings, including adoption of the Volcker Rule and other key provisions of the Dodd-Frank Act,” said Stephen Luparello, Director, Division of Trading and Markets. “He also has led the division’s response to significant market events and the development of key equity...
SEC Charges Eight for Roles in Widespread Pump-and-Dump Scheme Involving California-Based Microcap Company
The Securities and Exchange Commission today charged a ring of eight individuals for their roles in an alleged pump-and-dump scheme involving a penny stock company based in California that has repeatedly changed its name and purported line of business over the past several years.
The SEC alleges that the scheme was orchestrated by Izak Zirk de Maison, who was named Izak Zirk Engelbrecht before taking the surname of his wife Angelique de Maison. Both de Maisons are charged by the SEC in the case along with others enlisted to buy, sell, or promote stock in the company now called Gepco Ltd. Zirk de Maison installed some of these associates as officers and directors of Gepco while he secretly ran the company behind the scenes. Collectively, they amassed large blocks of shares of Gepco common stock while the de Maisons manipulated the market to create the appearance of genuine investor demand, allowing...
SEC Charges Tacoma, Wash.-Area Firm for Undisclosed Principal Transactions and Misleading Performance Advertisements
The Securities and Exchange Commission today charged an investment advisory firm located outside Tacoma, Wash., with engaging in hundreds of principal transactions through its affiliated broker-dealer without informing clients or obtaining their consent.
Strategic Capital Group LLC, which is additionally charged with distributing false and misleading advertisements to investors, agreed to pay nearly $600,000 to settle the SEC’s charges. The firm’s CEO N. Gary Price was charged with causing some of the firm’s violations, and agreed to pay a $50,000 penalty to settle the charges against him.
In a principal transaction, a firm acting for its own account or through an affiliated broker-dealer buys a security from a client account or sells a security to it. Principal transactions can pose potential conflicts between the interests of the adviser and the client, and therefore advisers are required to disclose in writing any financial interest or conflicted role when advising a client on the...
Former Hedge Fund Manager in Bay Area Charged With Taking Excess Management Fees to Make Lavish Purchases
The Securities and Exchange Commission today announced charges against a former hedge fund manager accused of fraudulently taking excess management fees from the accounts of fund clients and using their money to remodel his multi-million dollar home and buy a Porsche.
An SEC Enforcement Division investigation found that Sean C. Cooper improperly withdrew more than $320,000 from a hedge fund he managed for San Francisco-based investment advisory firm WestEnd Capital Management LLC. While WestEnd disclosed to clients the withdrawal of annual management fees of 1.5 percent of each investor’s capital account balance, Cooper actually withdrew amounts that far exceeded that percentage. He then transferred the money to personal bank accounts so he could spend it freely. Cooper’s misconduct occurred for a two-year period until he ceased misappropriating fund assets when the SEC began an examination of WestEnd in April 2012.
WestEnd, which expelled Cooper and reimbursed the hedge fund once it became...