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This Week in Securities Litigation (April 1, 2011)

In the week ending with "April Fools Day," the Commission continued to issue proposed regulations to implement the Dodd-Frank Wall Street and Consumer Protection Act. SEC Enforcement focused on investment fund fraud actions, filing or resolving seven cases. The Commission also brought a...

Another Offering Fraud Case

Cases involving the sale of unregistered securities and Ponzi schemes were among the leading categories of cases brought last year according to recent statistics from NERA Economic Consulting ( here ). The Commission's action against Kenneth Dachman combined elements of both. SEC v. Dachman, Case...

This Week In Securities Litigation (Week ending October 5, 2012)

The President's new market crisis task force brought its first action this week. It named as a defendant Bear Stearns which has been acquired by JP Morgan. The New York AG, co-chair of the task force announced in the state of the union address earlier this year, brought the action. It differs substantially...

Offering Fraud: An SEC Enforcement Staple

One of the new staples of SEC enforcement is offering fraud cases. When coupled with Ponzi scheme or investment fund fraud actions, they constitute a significant portion of the day to day work load of the reorganized Enforcement Division. Two recent examples of these cases are SEC v. Detroit Memorial...

SEC Files Another Offering Fraud Action

Offering frauds continue to be the focus of the SEC Enforcement Division. Echoing claims from other recent cases, such as In the Matter of Scuderi Group, Inc., Adm. Proc. File No. 3-15344 (Filed May 30, 2013) (repeated share placements made under a claimed exemption which were one years long unregistered...

SEC Files Two Offering Fraud Cases

Offering fraud and Ponzi scheme cases have, in recent years, become a staple of the SEC enforcement division. Some of these cases are simple shams where the promoters lure unsuspecting investors with tales of quick, easy and safe returns. Others are more complex, involving ventures which actually have...

SEC Files Offering Fraud Action Centered on Three Schemes In Three Years

The SEC brought another in a series of offering fraud cases. This one, however, does not focus on just one offering but three since mid- 2011. Promoters Robert Helms and Janniece Kaelin, their entities and Deven Sellers and Roland Barrera are named as defendants. SEC v. Helms, Civil Action No. 1:13-cv...

SEC Brings an Offering Fraud Action Against a Claimed App Maker

The SEC brought an action against a reputed “app” manufacturer who sold shares in two different entities beginning first in Colorado and later from Georgia. From each location, and for each entity, the sales pitch was essentially the same. Indeed, investors were told that the second company...

SEC Brings Another Offering Fraud Case

The Commission filed another in what appears to be an unending series of offering fraud actions. Unlike many of its prior cases, this action centers on a Respondent who kept shifting his scheme to continually raise more money at the expense of innocent investors. In the Matter of Anthony Coronti, Adm...

Former Adjunct Business School Professor, His Firm, the Placement Broker and Its Managing Partner Named in SEC Offering Fraud Actions

The Commission instituted administrative proceedings centered on an offering fraud orchestrated by a former adjunct Professor at Columbia Business School who taught, and previously specialized in, turning around troubled companies, along with his firm. Related actions were instituted naming the broker...

SEC Files Offering Fraud Action Against Sellers of Over $10M Worth of Bonds to Public

A business man, a real estate company he acquired from his grandfather, a registered representative who has now been barred by FINRA from the securities business and Maryland Division of Securities from the advisory business and an unnamed broker teamed-up to sell millions of dollars of bonds to the...

SEC Files Prime Bank Fraud and Offering Fraud Actions as Administrative Proceedings

The trend of selecting administrative proceedings rather than Federal court by the SEC appears to be continuing. Since last September, for example, the SEC has filed at least seven insider trading cases as administrative proceeds. Previously, the agency typically brought insider trading cases as civil...

SEC Files Offering Fraud Action

The Commission filed another offering fraud action tied to the sale of interests in the development of oil and gas wells prior to the recent downturn in the price of oil. Beginning in 2010 the defendants raised about $4.4 million from 60 investors through a nationwide offering. The defendants largely...

SEC Files Offering Fraud and Ponzi Scheme Cases

A staple of SEC enforcement in recent years has been offering fraud and Ponzi scheme cases. This week the Commission filed two more of these actions, one an offering fraud targeting military personnel and a second and investment fund fraud case which virtually told investors it was a Ponzi scheme. SEC...

SEC Files Two Offering Fraud Actions Tied to a Horse Farm

The Commission filed two settled offering fraud actions centered in part around an entity engaged in the purchase and sale of thoroughbred horses called Raintree Racing. A second involved an offering of interests in a real estate investment firm known as Atlanta Rehab which had invested in Raintree Racing...

SEC Files Offering Fraud Action Against Radio Show Hosts

The SEC filed another offering fraud action, a staple of enforcement. This action centers on two recidivist radio talk show hosts selling interest in life settlements based on enhancements of their investment credentials, omissions of their regulatory history and a series of misrepresentations. SEC v...

SEC Files Offering Fraud Charges Based in Part on EB-5 Program

The EB-5 program , which promises a path to a permanent green card for those who can invest in this country and create jobs, has been involved in a number of SEC enforcement actions, most recently involving unregistered broker charges. In a case filed this week, however, it was one facet of an affinity...

SEC Files Another Offering Fraud Case

Offering fraud has long been a staple of SEC enforcement. SEC v. Baldwin, Civil Action No. 2:15-cv-00458 (D. UT. Filed June 25, 2015) is one such action, centered on the acquisition of two defaulted loans, collateralized by real estate. In one instance the loan was acquired and sold before the investors...

Implications of the SEC’s Charges Against Unregistered Broker Based on EB-5 Program

[UPDATE: This article was updated to correct the names of the respondents in the described case.] The Securities and Exchange Commission (“SEC”) has further demonstrated its intent to take a more active role in ensuring that participants in the EB-5 program are in compliance with securities...

SEC Settles Unregistered Broker Charges Tied to Offering Fraud

The SEC entered into partial settlements with three persons charged with acting as brokers without registering. The charges were tied to an offering fraud which centered on selling interests in a firm that claimed to be engaged in the business of buying and selling fractional interests in oil and gas...

SEC Files Offering Fraud, Microcap Fraud Actions

Microcap fraud and offering fraud cases are staples of SEC enforcement. The agency added to its totals in these areas, filing an additional offering fraud and microcap fraud action. SEC v. Mogler, Civil Action No. 15-cv-01814 (D. Ariz. Sept. 11, 2015); SEC v. Babini, Civil Action No. q:15-cv-13348 (D...