Final judgment has been entered against Temenos Advisory Inc. and its former CEO George Taylor, the SEC announced. The SEC had charged Temenos and Taylor with putting investor funds in unsuitable investments and concealing commissions. In total, Temenos and Taylor are ordered to pay more than $2 million. The entry of judgment concludes a case that began with the SEC charging Temenos and Taylor in July 2018.
The U.S. Supreme Court has upheld the SEC’s ability to obtain disgorgement in enforcement cases. However, the decision also put limits on how much disgorgement can be obtained. The Supreme Court held that the SEC can obtain disgorgement of ill-gotten gains in federal court, but the disgorgement cannot exceed the defendant’s net profit from the scheme. In the Opinion, the Supreme Court found that “legitimate expenses” could be deducted from net profit when calculating disgorgement.
Brothers Sean and Shane Hvizdzak have been charged by the U.S. Securities and Exchange Commission (“SEC”) for allegedly misappropriating investor money from High Street Capital Fund USA LP, a cryptocurrency investment fund. The SEC also alleges that the Hvizdzaks misrepresented the fund’s performance to investors. The U.S. District Court granted the SEC’s request to freeze the Hvizdzaks’ assets and for a temporary restraining
The U.S. Securities and Exchange Commission’s (“SEC”) investment advice reform rules, which include Regulation Best Interest (“Reg. B-I”), are set to take effect at the end of June. The new rules will require SEC-registered advisers to complete a client relationship summary, or Form CRS. As part of the client relationship summary, advisers will be required to disclose their services, fees, costs, disciplinary history , conflicts of interest and the standard of conduct by which they are governed.
In March, a federal judge entered a final judgement in a case brought by the U.S. Securities and Exchange Commission (“SEC”) against International Investment Group LLC (“IIG”). According to the SEC, IIG doctored loan records and inflated the value of defaulted loans. The SEC also alleged that IIG sold $60 million in fake loans to cover up losses in its flagship hedge fund. The judgement ordered IIG to pay $30.9 million in disgorgement and $4.3 million in prejudgment interest, which has since been paid by IIG.
A whistleblower who submitted a tip to the U.S. Securities and Exchange Commission (“SEC”) received a nearly $50 million award. This award is the largest award ever given to a single individual under the SEC whistleblower program, surpassing the previous record of $39 million awarded in 2018. The SEC also noted that it had now awarded more than $500 million through its whistleblower program.
E*Hedge Securities and its CEO Devon W. Parks have been charged by the U.S. Securities and Exchange Commission (“SEC”) for failing to provide the firm’s books and records to the SEC in connection with an SEC examination. Additionally, the SEC alleged that E*Hedge is not properly registered to be an internet investment adviser.
In a case brought by the U.S. Securities and Exchange Commission (“SEC”), a federal judge has ordered Navellier & Associates Inc. to pay $31.4 million. Of the ordered sanctions, $28.9 million is disgorgement of proceeds gained by the firm’s fraudulent conduct. Additionally, the firm is ordered to pay a civil penalty of $2 million and the firm’s founder, Louis Navellier, is ordered to pay a $500,000 civil penalty.
Ares Management LLC, a private equity firm and registered investment adviser based in Los Angeles, has agreed to settle charges brought by the U.S. Securities and Exchange Commission (“SEC”). According to the SEC, Ares failed to implement and enforce policies and procedures reasonably designed to prevent the misuse of material nonpublic information. According to a release by the SEC, the firm will pay $1 million as part of the settlement.
The U.S. Securities and Exchange Commission announced that it had obtained a temporary restraining order (“TRO”) against Paul Horton Smith, Sr. in an effort to halt an on-going Ponzi scheme. The SEC said that it also froze Smith’s assets. According to the SEC, Smith was running a Ponzi scheme that targeted senior citizens in Southern California. The SEC alleged that Smith used eGate, LLC, his investment advisory firm, and Planning Services, Inc., his insurance and estate planning company, to market securities in another one of his companies, Northstar Communications, LLC.
