Articles Posted in Disciplinary Actions

On September 29, 2015 the SEC announced that former UBS broker Jose Ramirez of Puerto Rico was charged with making material misrepresentations and omissions and orchestrating a scheme involving the use of credit line proceeds from a UBS affiliated bank to purchase shares in UBS Puerto Rico affiliated mutual funds.

The complaint filed in federal court in Puerto Rico against Jose Ramirez, a former registered representative in UBS’s Guaynabo branch office alleges that Ramirez increased his compensation by at least $2.8 million by having certain customers use proceeds from lines of credit with UBS Bank USA to purchase additional shares in UBSPR closed-end mutual funds.

These funds lost value as the Puerto Rico bond market declined, requiring the customers to pay down a portion of the loans or risk having their investments liquidated.

On December 8, 2015 the SEC announced that it had settled their action against Covenant Partners, L.P., a Philadelphia-area private equity fund.

Prior to this development, the SEC had brought an action against Covenant Partners  along with Bill Fretz and his unregistered investment adviser, Covenant Capital Management Partners, L.P.

According to the SEC’s order Bill Fretz  orchestrated a fraud through Covenant Capital Management Partners, L.P. and the private equity fund he managed, Covenant Partners, L.P.

On September 15, 2015 the SEC charged five Arizona residents with stealing millions of dollars from investors to make car payments, buy clothes, and fund travel and entertainment at luxury resorts, casinos, and strip clubs.

The SEC alleges that Jason Mogler of Pangea Investments misappropriated over $17 million from investors who were told the funds would be used to acquire and develop Mexican beachfront property, a recycling complex, and distressed real estate. Instead, the complaint alleges that Jason Mogler referred to, and used the funds as his “personal candy store.”

They complaint alleges that they repeatedly lied about the purported progress of the investments to calm investors as time extended past when their promissory notes should have been repaid. In certain instances they made Ponzi-like payments to investors threatening them with lawsuits by using money from new investors, which Jason Mogler termed “robbing Peter to pay Paul.”

On September 8, 2015 the SEC announced it had filed fraud charges against three traders accused of repeatedly lying to customers who were relying on them for honest and accurate pricing information about residential mortgage-backed securities (RMBS).

The SEC alleges that Ross Shapiro, Michael Gramins, and Tyler Peters defrauded customers to illicitly generate millions of dollars in additional revenue for Nomura Securities International. They complaint alleges that Shapiro, Gramins and Tyler Peters misrepresented the bids and offers being provided to Nomura for RMBS, as well as the prices at which Nomura bought and sold the RMBS. They also trained, coached, and directed junior traders at the firm to engage in the same misconduct.

According to the SEC’s complaint filed in federal court in Manhattan, the scheme generated $7,000,000 million in additional revenue for Nomura. Customers relied on market price information quoted by these traders because the market for this type of RMBS is not transparent, and accurate price information is difficult for a customer to determine. Therefore it was particularly important for the traders to provide honest and accurate information.

On September 8, 2015 the SEC announced it had filed fraud charges against three traders accused of repeatedly lying to customers who were relying on them for honest and accurate pricing information about residential mortgage-backed securities (RMBS).

The SEC alleges that Michael Gramins defrauded customers to illicitly generate millions of dollars in additional revenue for Nomura Securities International. They complaint alleges that Shapiro, Michael Gramins and Peters misrepresented the bids and offers being provided to Nomura for RMBS, as well as the prices at which Nomura bought and sold the RMBS.

According to the SEC’s complaint filed in federal court in Manhattan, the lies and omissions to customers generated at least $7,000,000 million in additional revenue for Nomura.  Customers relied on market price information quoted by these traders because the market for this type of RMBS is not transparent, and accurate price information is difficult for a customer to determine. Therefore it was particularly important for the traders to provide honest and accurate information.

On September 8, 2015 the SEC announced it had filed fraud charges against three traders accused of repeatedly lying to customers who were relying on them for honest and accurate pricing information about residential mortgage-backed securities (RMBS).

The SEC alleges that Ross Shapiro defrauded customers to illicitly generate millions of dollars in additional revenue for Nomura Securities International. They complaint alleges that Ross Shapiro, Gramins and Peters misrepresented the bids and offers being provided to Nomura for RMBS, as well as the prices at which Nomura bought and sold the RMBS. They also trained, coached, and directed junior traders at the firm to engage in the same misconduct.

According to the SEC’s complaint filed in federal court in Manhattan, the lies and omissions to customers generated at least $7,000,000 in additional revenue for Nomura. Customers relied on market price information quoted by these traders because the market for this type of RMBS is not transparent, and accurate price information is difficult for a customer to determine. Therefore it was particularly important for the traders to provide honest and accurate information.

On September 25, 2015 the SEC filed a civil injunctive in federal court in Colorado relating to the fraudulent offer and sale of stock in GenAudio, Inc. The SEC charged GenAudio, Inc., a Colorado corporation, its corporate successor, Astound Holdings, Inc. and GenAudio’s founder and CEO, Taj Jerry Mahabub, of Broomfield, Colorado, with the fraudulent and unregistered offer and sale of  GenAudio stock.

According to the SEC’s complaint, from 2010 through 2012, GenAudio raised over $4,000,000 in two private placements based in large part on representations that Apple planned to acquire GenAudio or enter into licensing agreements to use its technology. The complaint alleges that GenAudio and Mahabub told prospective investors that Apple wanted to acquire GenAudio’s technology, and that a third party had valued GenAudio’s technology as being worth 0ver $1,000,000,000.

However, the complaint alleges that GenAudio had only demonstrated its technology and had technical discussions with mid-level Apple personnel, none of whom had indicated that Apple was interested in a transaction with GenAudio. The SEC further alleges that during the scheme, Mahabub falsified documents and pocketed more than $2,000,000 through his offer and sale of his personal stock in GenAudio.

On September 28, 2015 the SEC announced that it had filed fraud charges against Eldrick Woodley, a Houston-based investment advisor, for misappropriating close to $150,000 from customers. funds.

According to the SEC’s complaint, filed in the U.S. District Court for the Southern District of Texas, Houston Division, Eldrick Woodley, through his advisory firm Woodley & Co. Wealth Strategies, undertook a fraudulent scheme to steal money from his advisory clients.

The SEC’s complaint alleges that Eldrick Woodley submitted a series of fraudulent fee invoices to the custodian of his clients’ accounts, purportedly as compensation for services Woodley performed and investments Woodley made on his clients’ behalf. According to the SEC’s complaint, the fee invoices were fictitious, as Woodley never performed the services or made the investments on behalf of the clients.

On August 20, 2015 The SEC announced that it had obtained a preliminary injunction freezing the assets of Iftikar Ahmed, an investment professional, who they charged with running a 10 year fraud at the venture capital firm where he previously was employed, Oak Investment Partners.

The SEC filed its emergency action against Iftikar Ahmed in May and alleged that he obtained approximately $65,000,000 improperly. On May 7, 2015, the court imposed a temporary restraining order on Ahmed imposing an asset freeze on him, and on August 12, 2015, the U.S. District Court for the District of Connecticut issued an order granting the SEC’s motion for a preliminary injunction continuing the asset freeze up to approximately $118,000,000.

The SEC alleges that Iftikar Ahmed used a variety of fraudulent means to perpetrate his scheme and generate illicit profits in connection with multiple securities transactions. Among other things, Ahmed overstated the prices of investments in companies  by altering deal documents, pocketing the difference for himself.

In November, 2015, the Financial Industry Regulatory Authority (“FINRA”) announced that Aldo Comuzzi of Boca Raton, FL, and formerly associated with Dawson James Securities submitted a letter of acceptance, waiver and consent in which he was barred from association with any FINRA member in any capacity.

Without admitting or denying the findings, Aldo Comuzzi consented to the sanction and to the entry of findings that he refused to provide a response to a FINRA request for documents and information during an investigation into whether he had engaged in excessive trading and whether he had improperly utilized discretion without written approval in certain of his broker dealer’s customer accounts.

Aldo Comuzzi’s registration and disciplinary history