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May 29, 2015 at 05:25 AM
The compliance director of a brokerage firm was charged by the Securities and Exchange Commission with fraud and theft of assets by the SEC, while a New York securities lawyer and two Canadian promoters were charged by the SEC with manipulating stock prices.
FINRA, for its part, went after AXA Advisors for arbitration failures and World Equity Group for anti-money laundering failures.
Compliance Director Charged by SEC with Fraud, Theft
William Quigley of Long Island was charged by the SEC with fleecing investors and stealing the assets of Trident Partners Ltd., the brokerage firm where he worked as the director of compliance.
According to the agency, Quigley schemed to solicit investors to buy stock in well-known companies or supposed startups on the verge of going public. However, once investors wired him the money, Quigley never bought the securities. Instead, he moved the money from the bank and brokerage accounts he himself had set up and controlled into a bank account in the Philippines, or else he withdrew it in small increments from ATMs near where he lived and worked.
Quigley opened three brokerage accounts to misappropriate investor funds, including a secret account at his then-employer. It was Quigley’s job as compliance director to open and properly route all incoming mail, as well as to monitor all wires and report any suspicious transfers — so he was in an ideal position to keep Trident Partners from finding out about the secret account and its corresponding wires. He also stole commission checks to Trident Partners and deposited them in outside accounts he used in the scheme.
Quigley allegedly worked in concert with two brothers who live in the Philippines and handled the solicitation aspects of the scheme while he funneled investor money out of the accounts to his brothers and himself.
The SEC’s investigation is continuing. In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York has announced criminal charges against Quigley.
SEC: NY Securities Lawyer Ran Pump-and-Dump Schemes Out of His Office
Securities lawyer Adam Gottbetter was charged by the SEC for using his New York law office as the headquarters for planning and implementing market manipulation schemes. Two Canadian stock promoters who assisted in the scheme, Mitchell Adam and K. David Stevenson, were also charged, as were two other penny stock promoters in Canada, Mike Taxon and Itamar Cohen, who were involved in one of Gottbetter’s schemes and in addition ran their own.
According to the agency, Gottbetter put together promotional campaigns touting the prospects of microcap companies to entice investors to buy their stock at inflated prices, so that he and his cohorts could sell their own shares at massive profits.
For the last of three schemes he conducted over a six-year period, Gottbetter enlisted Adam and Stevenson to help him. The three constantly warned one another to keep Adam’s and Stevenson’s identities a secret, and not to otherwise mess up and thus draw the attention of law enforcement. They also concocted stories to tell in such an eventuality, and even rehearsed them.
During one meeting in New York City, Gottbetter complained about the difficulties of stock manipulation but conceded that robbing a bank was the only other way to make so much money so quickly.
Before involving Adam and Stevenson, Gottbetter was involved in the manipulation of the stocks of Kentucky USA Energy Inc. (KYUS) and Dynastar Holdings Inc. (DYNA). Taxon and Cohen were involved with Gottbetter in manipulating the price of Kentucky USA stocks, but also pushed a purported gold and silver exploration company, Raven Gold Corp. (RVNG).
Taxon and Cohen distributed promotional mailings of glossy “newsletters” with fake publication names like “Stock Trend Report” and “Global Investor Watch” that touted Kentucky USA and Raven Gold, giving phony positive price and volume trends for these stocks and other fake information about the promoters’ identity, compensation and control of the stock. In reality, most of the touted market activity was generated by Taxon, Cohen and their associates, who controlled large blocks of the companies’ stocks.
