SEC Halts Alleged Fraud by Unregistered Firm: Enforcement

The FTC obtained a court order requiring the owner of precious metals scam to surrender his Florida home

The SEC obtained an asset freeze and court order halting an ongoing investment fraud – orchestrated by a recidivist – that falsely promised safe and unrealistic returns to persuade clients to provide access to their brokerage accounts.

According to the SEC's complaint, Mohamud Abdi Ahmed and 2waytrading LLC have been offering investment advice to clients since 2014.

Ahmed hid the fact that the SEC previously stopped him from orchestrating a securities fraud targeting Somali immigrant investors in San Diego, Seattle and elsewhere and that Ahmed had been convicted of wire fraud and ordered to pay restitution of $551,00, serve 21 months in prison, and remain on three years’ supervised release.

According to the SEC’s complaint, Ahmed and 2waytrading have been falsely promising unrealistic double-digit investment returns and assuring clients that Ahmed’s risky options trading investment strategy is safe and secure. The complaint also alleges that Ahmed and 2waytrading are using these false claims to convince clients to give them access to their clients' brokerage accounts so Ahmed can place trades on their behalf.

Senior Judge Paul A. Magnuson of the U.S. District Court issued a temporary restraining order that imposed the freeze on Ahmed's and 2waytrading’s assets and prohibits them from making any investment decisions or accessing any brokerage accounts they do not own. The order also temporarily prohibits Ahmed and 2waytrading from violating the antifraud provisions.

The SEC is seeking financial penalties and disgorgement of ill-gotten gains as well as permanent injunctive relief.

FTC Obtains Court Order Requiring Owner of Precious Metals Investment Scam To Surrender Florida Home

A federal court has granted the Federal Trade Commission’s request for a lien on the Florida home of Sam J. Goldman, the operator of an alleged precious metals scam that conned senior citizens.

For the first time, the FTC obtained a court order requiring the sale of a defendant’s home to pay a fraud judgment. Goldman has surrendered his home to a court-appointed receiver who will sell it and pay the Commission $428,600, which the FTC traced directly from the fraud.

The order follows court settlements reached in 2012, in which Goldman and other defendants in the American Precious Metals scheme agreed to pay more than $24.3 million to resolve FTC charges that they lured investors without disclosing significant costs and risks, including the likelihood that they would have to pay more money or lose their investment.

SEC Charges Former Head Traders at Nomura With Fraud

The Securities and Exchange Commission charged a pair of former head traders who ran the commercial mortgage-backed securities (CMBS) desk at Nomura Securities International Inc. with deliberately lying to customers in order to inflate the profits of the CMBS desk and line their own pockets as a result.

The SEC alleges that James Im and Kee Chan each misrepresented price information while acting as intermediaries on trades with Nomura’s customers who sought to buy and sell CMBS on the secondary market. In certain instances, Im and Chan allegedly pretended they were still negotiating bond purchases with a third-party seller at higher prices when Nomura had already acquired the bonds at a lower price.

The SEC alleges that in one instance, Im bragged about his purposeful deception of a customer, and Chan once altered an email to a customer to prop up his lie about the bid price for a bond. According to the SEC’s complaints, Chan and Im fraudulently generated more than $750,000 in extra trading profits for the CMBS desk, and they received substantial bonuses based largely on the desk’s performance.

Chan agreed to settle the charges by paying $52,000 in disgorgement plus $11,700 in interest and a $150,000 penalty. Without admitting or denying the allegations, Chan also agreed to be barred from the securities industry with the right to reapply after three years. The settlement is subject to court approval. The case continues against Im.

 

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