Enforcement: SEC Suspends Rep for Sharing Client Info

Another intern was hired at the request of a Chinese agency’s director general; human resources department emails described the intern as “a MUST PLACE,” and the hiring as “quite important from a customer relationship perspective.”

Qualcomm also provided a $75,000 research grant to a U.S. university on behalf of a foreign official’s son to keep him in its Ph.D. program and renew his student visa — as well as an internship and, later, permanent employment. It sent him on a business trip to China (during which he visited his parents over the Chinese New Year), despite concerns expressed about his qualifications for the assignment. And all that was after the son’s initial interview for permanent employment resulted in a “no hire” decision because he was not “a skills match” and did not “meet the minimum requirements for moving forward with an offer.” Those who interviewed him agreed “he would be a drain on teams he would join.” A human resources director still advocated for the hire, writing, “I know this is a pain, but I think we’re operating under a different paradigm here than a normal ‘hire’/‘no hire’ decision tree. We’re telling this kid … we don’t want to waste time or extend any extra effort in this favor [the telecom company] has asked of Qualcomm, and then turn around and ask the same person we just rejected to do us a special favor.”

Besides the preferential job treatment, a Qualcomm executive personally provided the official’s son with a $70,000 loan to buy a home.

Qualcomm also provided frequent meals, gifts, and entertainment with no valid business purpose to foreign officials to try to influence their decisions, such as airplane tickets for their children, event tickets and sightseeing for their spouses, and luxury goods.

Without admitting or denying the SEC’s charges, Qualcomm agreed to pay the $7.5 million penalty and self-report to the SEC for the next two years with annual reports and certifications of its FCPA compliance.

Jury Finds Two Brokers Guilty of Insider Trading

After a two-week trial, a jury in the Southern District of New York found both Daryl Payton and Benjamin Durant liable for insider trading in SEC v. Payton et al.

In 2014 the pair were charged by the SEC with illegally trading on a tip about the $1.2 billion acquisition of SPSS Inc. in 2009 by IBM Corp. Others previously charged in the case, including Thomas Conradt, who provided the tip, settled with the SEC and pleaded guilty to related criminal charges the year before.

In a statement about the jury’s verdict, Andrew Ceresney, director of the SEC’s Division of Enforcement, said, “Payton and Durant were sophisticated stockbrokers who used highly confidential information about an upcoming transaction to illegally make hundreds of thousands of dollars at the expense of ordinary investors who played by the rules. Today’s jury verdict holding them liable for insider trading reaffirms our commitment to aggressively root out and prosecute insider trading schemes, including by taking defendants to trial, in order to protect the integrity of our markets.”

FINRA Bars California Broker on Churning, Unsuitable Trades

Bahram Mirhashemi, formerly with Accelerated Capital Group in Irvine, California, has been barred from the industry after FINRA found that he “churned customer accounts, engaged in excessive and unauthorized trading of customer accounts and made unsuitable recommendations to customers.”

According to the agency, those trades and the way they were conducted ended up collectively costing his customers — several of whom were elderly, with “at most, moderate” risk tolerance with investment time horizons of at least 4 to 6 years and an investment holding period of at least 1 to 3 years, and who always followed his recommendations — well over a million dollars, between trading losses and commissions.

Mirhashemi also filed late and misleading Forms U4 and failed to file Forms U4 to disclose his liens, compromises with creditors and an outside business activity. In addition, he sent customers materially misleading communications, hiding the facts that in 2015, Accelerated suspended him from trading and prohibited him from serving as a registered representative. Instead, his communications urged clients to move their accounts to an investment advisor affiliate of the firm (where he could continue to earn money through securities-related services).

Mirhashemi neither admitted nor denied FINRA’s findings but consented to the sanction.

— Check out SEC: BNY Mellon Bribed Officials With Internships for Family Members on ThinkAdvisor.