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On September 30, 2015 the Securities and Exchange announced that Edward Borg submitted an Offer of Settlement. Solely for the purpose of the SEC’s proceedings and without admitting or denying the findings herein, Edward Borg consented to the findings that he periodically manipulated the market for Natural Alternatives International, Inc.’s (“NAII”) common stock between 2003 through 2011.

Edward Borg engaged in manipulative trading to support the price of NAII stock and to give the false appearance of investor interest. He directed trading in several of his customers’ accounts, personally invested heavily in NAII and had several of his customers invest heavily in NAII, often in high concentrations (more than 90% of the account’s total value) and frequently on margin.

In connection with one All Funds customer, Borg recommended that she invest in NAII almost exclusively, which was not suitable in light of her investment objectives. During this period, Borg personally owned as much as 22.5 percent of NAII’s outstanding stock, and customers at All Funds, combined with Borg’s personal holdings, owned as much as 55 percent of the outstanding shares of NAII.

On September 30, 2015 the Securities and Exchange announced that Securus Wealth Management LLC submitted an Offer of Settlement. Solely for the purpose of the SEC’s proceedings and without admitting or denying the findings herein, Securus Wealth Management and James Goodland consented to the findings that from January 2010 through July 2013, Securus and James Goodland, its President and Chief Compliance Officer, failed reasonably to supervise Howard Richards, an investment advisory representative associated with Securus Wealth Management. The findings also stated that Securus and Goodland failed to adopt and implement an adequate system of internal controls with a view toward preventing and detecting violations of the Advisers Act.

During this period, Richards engaged in a manipulative scheme to support the market price of Gatekeeper USA, Inc. (“Gatekeeper”) to help Gatekeeper obtain financing. Gatekeeper was a start-up company whose stock was thinly-traded on the over-the counter grey market under the symbol GTKP. Howard Richards caused his clients to invest over $1 million in shares of Gatekeeper stock during this period. This trading was unusual for Securus Wealth Management, whose primary business involved investing in mutual funds on behalf of its clients. In furtherance of his scheme, Howard Richards sent numerous emails from his Securus Wealth Management email account to an insider at Gatekeeper in which he discussed his scheme. In addition, Howard Richards failed to disclose significant conflicts of interest to his advisory clients arising from his personal ownership of Gatekeeper shares and his close involvement with the company

Howard Richards registration and disciplinary history

On January 27, 2015, the Securities and Exchange Commission obtained a final judgment against Edwin Fujinaga and MRI International, Inc. The judgment requires Fujinaga and MRI to pay more than $580 million.

The SEC alleged that MRI International and Edwin Fujinaga perpetrated an elaborate Ponzi scheme designed to misappropriate money from investors. The SEC claimed that the MRI International raised money from thousands of investors living primarily in Japan under the premise that MRI was using their funds to buy accounts receivable from medical providers at a discount, and turning those over to collect the full value of the receivables from insurance companies.

The SEC alleged that defendants used the money for other purposes, including financing Edwin Fujinaga’s extravagant lifestyle. In October 2014, the court granted the SEC’s motion for summary judgment on liability against Edwin Fujinaga and MRI International on all charges against them, including the following violations of the antifraud provisions of the federal securities laws: Sections 17(a)(1), (2), and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

On April 7, 2015 the SEC charged Los Angeles-based Pacific West Capital Group, Inc. and its owner Andrew Calhoun with fraud in the sale of “life settlement” investments.

The SEC’s complaint alleges that since 2004, Pacific West and Calhoun raised nearly $100 million from life settlement investors. Since at least 2012, Pacific West and Calhoun are alleged to have defrauded investors by using proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier. The complaint alleges that Pacific West Capital Group and Calhoun did not disclose this practice to investors, and attempted to make the life settlement investments they were selling appear successful when in fact, Pacific West Capital Group had used up the primary reserves to pay premiums on those policies.

According to the complaint, Pacific West and Calhoun also made false and misleading statements about the risks of investing in life settlements, including the risk of investors having to make increased premium payments as the insured people covered by the contract lived longer than Pacific West and Calhoun anticipated. Pacific West and Calhoun also are alleged to have misled investors about annual returns.

On December 18, 2015 the SEC charged Edward Durante, a recidivist securities law violator for running a multi-year securities offering fraud that targeted investors in New England, Ohio and California.

The SEC alleges that between 2012 and 2014, Edward Durante defrauded at least 50 unsophisticated investors of $11 million through the sale of securities of VGTel, a shell company he controlled.

According to the SEC’s complaint Edward Durante defrauded investors by selling approximately six million shares of VGTel stock to investors using a fictitious name to hide his criminal past and lying to investors regarding the use of stock sale proceeds.  Durante also bribed investment advisers, who advised their clients to purchase VGTel stock without disclosing to their clients that they had been bribed. Durante also engaged in matched trading of VGTel stock with a stockbroker to artificially control the stock’s market price.

On April 7, 2015 the SEC charged Los Angeles-based Pacific West Capital Group, Inc. and its owner Andrew B Calhoun IV with fraud in the sale of “life settlement” investments.

The SEC’s complaint alleges that since 2004, Pacific West Capital Group and Calhoun, a Beverly Hills, California, life insurance agent, have raised nearly $100 million from life settlement investors. Since at least 2012, PWCG and Calhoun are alleged to have defrauded investors by using proceeds from the sale of new life settlements to continue funding life settlement investments sold years earlier.

The complaint alleges that Pacific West Capital Group and Calhoun did not disclose this to investors and made the life settlement investments appear successful when in fact, PWCG had used up the primary reserves to pay premiums on those policies.

On April 24, 2015 the SEC announced charges against an Indianapolis investment adviser, Veros Partners, its president, two associates and several affiliated companies for engaging in two fraudulent farm loan offerings, in which they made ponzi scheme payments to investors in other offerings and paid themselves hundreds of thousands of dollars in undisclosed fees. The SEC obtained a temporary restraining order and emergency asset freeze to halt the scheme.

According to the SEC’s complaint, filed in the U.S. District Court for the Southern District of Indiana, in 2013 and 2014, Veros Partners, its president, Matthew D. Haab, and two associates, attorney Jeffrey B. Risinger and Tobin J. Senefeld, fraudulently raised at least $15 million from at least 80 investors, most of whom were Veros Partners advisory clients. The investors were informed that their funds would be used to make short-term operating loans to farmers, but instead, significant portions of the loans were to cover the farmers’ unpaid debt on loans from prior offerings. According to the SEC’s complaint, Haab, Risinger and Senefeld used money from the two offerings to pay millions of dollars to investors in prior farm loan offerings and to pay themselves over $800,000 in undisclosed “success” and “interest rate spread” fees.

In addition to Veros Partners, Haab, Risinger, and Senefeld, the SEC charged Veros Partners affiliates Veros Farm Loan Holding LLC and FarmGrowCap LLC, the issuers of the offerings, and PinCap LLC. The SEC also charged registered broker-dealer Pin Financial LLC as a relief defendant.

On May 6, 2015 the SEC announced charges and an emergency asset freeze against North Dakota Developments, LLC and its two principals, Robert L. Gavin and Daniel J. Hogan, for allegedly defrauding investors in a scheme to purportedly build and operate short-term housing facilities or “man camps” for workers in the Bakken oil and gas formation of North Dakota and Montana.

The SEC’s complaint alleges that North Dakota Developments and its owners Gavin and Hogan raised over $62 million from hundreds of investors for “units” in NDD’s projects by promising exceptionally high annual returns, up to 42%. The SEC also alleges that North Dakota Developments and its owners Gavin and Hogan offered investors the option of receiving a “guaranteed” annual return of up to 25% of the purchase price of their unit without regard to actual rental income.

As further inducement to invest, NDD and its owners Gavin and Hogan also promised investors that the various projects would be operational in a very short time frame, often within months. In reality, the SEC alleges, at the present time, none of the projects are fully operational.