The SEC (The Securities and Exchange Commission) announced settled charges against New York-based investment advisers American Portfolios Advisers Inc. (“APA”) and PPS Advisors Inc. (“PPS”), and PPS’s CEO Lawrence Nicholas Passaretti, on December 21, 2018. The advisers selected mutual fund share classes inconsistent with their client disclosures. As a result, the firms and the CEO…

The SEC on December 21, instituted its first enforcement actions against robo-advisers when they issued orders against Redwood City, a California-based Wealthfront Advisers LLC and Hedgeable Inc., a New York City-based robo-adviser. Robo-advisers provide software-based, automated portfolio management services. The enforcement actions took place because the advisers published misleading advertising and made false statements about…

The Securities and Exchange Commission suspended trading in the securities of Nevada-based American Retail Group, Inc. (aka Simex, Inc.) after they claimed to be partnered with an SEC-qualified custodian for use with cryptocurrency transactions in two August 2018 press releases. The releases reported that the cryptocurrency transactions would be “under SEC Regulations,” and that Simex,…

Regulation D – Rule 504 and Rule 506 grant exemptions from registration if different requirements are met. Regulation D – Rule 504 Exemption for a 12-month period of the offer and sale of up to $5,000,000Permits General offerings and solicitations so long as they are restricted to accredited investors Rule 504 of Regulation D provides…

SEC Charges Promoter with Penny Stock Market Manipulation Scheme The Securities and Exchange Commission (“SEC”) charged a public company promoter and company with conducting a scheme to manipulate trading in at least 97 penny stocks. According to the SEC’s complaint filed November 28, 2018, Eric Landis arranged with third-party advertisers for publicly traded, small (often…

SEC Forces Initial Coin Offering Issuers to Register Tokens as Securities The Securities and Exchange Commission (“SEC”) charged two companies, CarrierEQ Inc. (“Airfox”) and Paragon Coin Inc., (“Paragon”) who conducted Initial Coin Offerings (“ICOs”) after the SEC published its famous DAO Report of Investigation concerning the topic of ICOs. On November 16, 2018, after an…

The Securities and Exchange Commission (SEC) suspended trading in the securities of Nevada-based American Retail Group, Inc. (aka Simex, Inc.) after they claimed to be partnered with an SEC-qualified custodian for use with cryptocurrency transactions in two August 2018 press releases. The releases reported that the cryptocurrency transactions would be “under SEC Regulations,” and that…

SEC Charges Hedge Fund Advisor for Inflating Fund Performance SEC Charges Hedge Fund Adviser with Deceiving Investors by Inflating Fund Performance Summary The SEC, in cooperation with the U.S Attorney’s Office and the FBI, investigated the allegedly secret deals and brought charges against a hedge fund advisor for inflating fund performance. A summary of the…

Ad Packs an Illegal Ponzi Scheme – SEC Calls Online Advertisements If you are soliciting investors to purchase online advertisements known as “Ad Packs” the SEC might deem them securities and prosecute you for legal violations. The Securities and Exchange Commission recently warned investors to beware of online “paid-to-click” scams that promise an easy payday…

Rick A. Fleming, Investor Advocate U.S. Securities and Exchange Commission[1] This is a Keynote Address given at the University of Maryland, Robert H. Smith School of Business Center for Financial Policy on Nov. 16, 2016 This is the presentation on this subject. Thank you, David [Lynn], for that kind introduction.  I also want to thank…

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