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September 12, 2013 at 07:44 AM
Among recent SEC actions were the negotiation of a $5.2 million settlement from a trader in Bangkok, Thailand, on insider trading charges; charges against the former head of investor relations for First Solar for fair disclosure violations; and an emergency asset freeze in a prime bank investment scheme.
Bangkok Trader to Settle Smithfield Insider Trading Charges for $5.2 Million
Trader Badin Rungruangnavarat, whose U.S. brokerage account assets were frozen via an emergency order in June, has agreed to pay $5.2 million to settle charges that he traded on inside information ahead of the public announcement of the proposed acquisition of Smithfield Foods by a Chinese firm.
On June 5, the SEC filed a complaint against Badin for making more than $3 million in illicit profits just days earlier by insider trading in Smithfield securities. In the week before a May 29 public announcement of the planned sale of Smithfield Foods to Shuanghui International Holdings, Badin had bought up out-of-the-money Smithfield call options and single-stock futures contracts.
He relied on a number of possible sources of nonpublic information. Among those sources was an associate director of an investment bank whom he was friends with via Facebook. The friend’s bank was acting on behalf of a different company considering a Smithfield acquisition.
While neither admitting nor denying the SEC’s allegations, Badin has agreed to pay $3.2 million in disgorgement and a $2 million penalty for his actions. The asset freeze made it possible to prevent him from moving the money out of the country.
Prime Bank Investment Scheme Ground to a Halt by SEC
The SEC has charged a Miami-based attorney and other alleged perpetrators of a prime bank investment scheme, and has also obtained an emergency asset freeze against them.
In the scheme, which promised exorbitant returns from a nonexistent international trading program, attorney Bernard Butts Jr. acted as an escrow agent to enable Fotios Geivelis Jr. and his phony financial services firm, Worldwide Funding III, to defraud approximately 45 investors out of more than $3.5 million they invested in the fake trading program.
Geivelis lives in Tampa; he used the alias “Frank Anastasio” with investors, telling them that they’d get returns of at least 6.6 million euros ($8.7 million) within 15 to 45 business days on an initial investment of $60,000 to $90,000 in U.S. dollars. That was supposed to be followed by a weekly return of approximately 14% for 40 to 42 weeks.
Investors were lured in via Internet, phone and personal contacts, and were told their money was going to pay for bank charges to lease a standby letter of credit (SBLC) in the amount of 10 million euros from a banking group in Europe. The SBLCs were then to be used to acquire loans, and the funds from the loan were to be placed in a securities trading program.
Geivelis and Butts promised investors that their money would stay in escrow with Butts until he got proof from the receiving bank that a $10 million euro SBLC had been deposited into the securities trading program to generate profits for investors.
Not so, of course. There was no trading program, and no SBLC was ever sought. Instead, Butts has almost immediately distributed those investor funds to enrich himself, sales agents, and Geivelis, who has blown his part on such personal expenses as travel and gambling. Butts and Geivelis each took about 45%, and paid about 10% to the sales agents.
The three sales agents have also been charged: Douglas Anisky of Delray Beach, Fla.; James Baggs of Lake Forest, Calif.; and Sidney Banner of Delray Beach, Fla., and his company Express Commercial Capital.
