Monthly Archives: August 2014

$729 Million Penalty Ordered by the SEC

RoundIcons-Free-Set-11Attorneys for Samuel E. Wyly (“Sam Wyly”) and his late brother Charles J. Wyly (“Charles Wyly”) (jointly, the “Wylys”) presented arguments to a U.S. District Judge disputing the amount the Wylys are being ordered to pay for their role in a fraudulent offshore operation. The Securities and Exchange Commission (“SEC”) has requested $729 million in damages from the Wylys related to “a 13-year fraudulent scheme to hold and trade tens of millions of securities of public companies while they were members of the boards of directors of those companies, without disclosing their ownership and their trading of those securities.” The fraudulent activity used a system of trusts in the Isle of Man and the Cayman Islands to hide their ownership and control of the Issuers’ securities. Continue reading

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FINRA Accuses Wedbush Securities of Regulatory Violations

The Financial Industry Regulatory Authority (“FINRA”) has filed a complaint through its Department of Market Regulation and Department of Enforcement against Los Angeles-Based brokerage firm, Wedbush Securities (“Wedbush”). The complaint charges Wedbush with systemic supervisory and anti-money laundering (“AML”) violations from 2008 to 2013. The violations are related to Wedbush’s market access activities for broker-dealers and non-registered market access participants. Continue reading

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Misleading Statements to Customers to Transfer Their Assets Lead to Prosecution of Boston-based Investment Adviser

A  Boston, Massachusetts Federal Court Jury has rendered a verdict against registered investment adviser Sage Advisory Group, LLC (“Sage”) and its principal Benjamin Lee Grant (“Grant”) in a civil fraud case filed by the Securities and Exchange Commission (“SEC”). The complaint alleged that Grant devised a scheme to convince his former clients to transfer their assets to Sage using statements the SEC contended were materially false and misleading.

In 2005, Grant left his employer broker-dealer Wedbush Morgan Securities (“Wedbush”) to launch his own advisory firm, Sage. Grant’s customer accounts at Wedbush totaled approximately $100 million in assets, and were being managed by investment adviser First Wilshire Securities Management (“First Wilshire”) based out of Pasadena, California. Continue reading

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FINRA Creates Arbitration Task Force

The Financial Industry Regulatory Authority (“FINRA”) has formed a 13-member Arbitration Task Force in an effort to “improve the transparency, impartiality and efficiency” of the arbitration process.  Arbitration is a formal dispute resolution process for disputes and complaints arising out of investors business dealings with any FINRA brokerage firm. Continue reading

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Former Hedge Fund COO Admits to Enabling Owner to Misappropriate Client Funds

Peter A. Jenson (“Jenson”), the former Chief Operations Officer of Harbinger Capital Partners, LLC (“Harbinger”), has agreed to settle fraud charges with the Securities and Exchange Commission (“SEC”) for aiding Harbinger’s owner, Phillip A. Falcone (“Falcone”), in the misappropriation of client funds. This settlement helps resolve charges originally brought forth in a 2012 enforcement action by the SEC against Jenson, Falcone and Harbinger. Continue reading

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