SEC Enforcement: Ex-Wells Fargo Analyst, Trader Charged With Insider Trading

Two Florida men, Erick Laszlo Mathe and Ashif Jiwa, were charged by the SEC with defrauding investors in a purported startup television network and production company by providing false information about its revenues and future prospects, including that former basketball star Michael Jordan planned to invest in the company.

According to the agency, Vision Broadcast Network’s then-CEO Mathe, with assistance from consultant Jiwa, raised at least $5.7 million in startup capital from approximately 100 investors nationwide through the sale of the company’s common stock and convertible debentures. They solicited investors from approximately August 2007 to February 2010, and the securities offering was not registered with the SEC, as is required under the federal securities laws.

The pair falsely claimed to investors that Vision Broadcast owned low-power television stations as well as 70 broadcast licenses to operate additional low-power television stations estimated to be worth $400 million once the television stations became operational.

And in addition to using the glamour of Michael Jordan’s name, the two also said an institutional investor had committed a $25 million investment to the company. None of this was true.

The SEC seeks financial penalties, disgorgement of ill-gotten gains with prejudgment interest, penny stock bars, officer-and-director bars and permanent injunctions. The SEC also names a company affiliated with Jiwa called Bluemark Asset Management LLC as a relief defendant for the purposes of recovering investor funds that Vision Broadcast used to pay Bluemark for professional services that were never actually provided.

In a parallel action, the U.S. Attorney’s Office for the Eastern District of Pennsylvania has announced criminal charges against Mathe and Jiwa. Vision Broadcast is now a dissolved company.

Man Charged With Fraud in Massachusetts

Tax advisor John Horan and his company, Horan Associates Ltd. of North Easton, Massachusetts, were charged with fraud by Secretary of the Commonwealth William Galvin for the misuse of the brokerage account of elderly relatives and providing unregistered investment advice.

According to the complaint, in 2010 Horan created an investment plan for his elderly relatives that started with them opening a Fidelity brokerage account. Horan had their Fidelity online user name and password, and used them, along with other information he possessed, such as birthdates and Social Security numbers, to impersonate them with Fidelity.

Horan manipulated the account, even managing to establish third-party electronic funds transfers from it. According to the complaint, “Horan’s ability to attach his bank account to his elderly relatives’ Fidelity account coupled with the user name and password allowed Horan to treat the elderly relatives’ Fidelity account like his own personal piggy bank.”

He transferred more than $61,500 from their account into his own accounts, and used it for personal expenses while telling his relatives he’d invested it in two South Easton companies he was connected with.

It wasn’t until after the Securities Division subpoenaed the two companies for investor information that Horan admitted to his elderly relatives what he had actually done with their money.

The complaint seeks a permanent bar against Horan and his company from the securities business in the state, along with disgorgement of the proceeds and an administrative fine.