The Financial Industry Regulatory Authority barred Mitchell Toby Yanow, a former securities representative at Stifel, Nicolaus & Co., for taking money from an 87-year-old firm customer’s funds for his own personal gain.
Without admitting or denying the findings, Yanow consented to the sanction and to the entry of findings that he converted at least $205,586 of an 87-year-old customer’s funds by writing checks drawn on the customer’s brokerage account at Yanow’s member firm without the customer’s knowledge or authorization.
In or around July 2017, this firm customer gave Yanow blank checks drawn on the customer’s firm brokerage account so that Yanow could pay the customer’s caregivers in the event the customer was unable to do so.
However, from at least August 2017 through May 2018, Yanow used the customer’s blank checks to convert the customer’s funds, using the money to pay for his own personal expenses without the customer’s knowledge or consent.
According to FINRA, Yanow wrote approximately 33 checks from this customer’s firm account for expenses including Yanow’s overdue homeowner’s association fees, his children’s summer camp fees, and the purchase of a 1976 Corvette.
SeaWorld, ex-CEO Fined for Fraud Over Impact of Documentary
The Securities and Exchange Commission announced that SeaWorld Entertainment Inc. and its former CEO have agreed to pay more than $5 million to settle fraud charges for misleading investors about the impact the documentary film “Blackfish” had on the company’s reputation and business.
“Blackfish” criticized SeaWorld’s treatment of its orcas (killer whales) and received significant media attention as the film became more widely distributed in the latter half of 2013.
The SEC’s complaint alleges that from approximately December 2013 through August 2014, SeaWorld and former CEO James Atchison made untrue and misleading statements or omissions in SEC filings, earnings releases and calls, and other statements to the press regarding Blackfish’s impact on the company’s reputation and business.
According to the SEC’s complaint, on Aug. 13, 2014, when SeaWorld for the first time acknowledged that its declining attendance was partially caused by negative publicity, SeaWorld’s stock price fell, causing significant losses to shareholders.
The SEC’s complaint charges SeaWorld and Atchison with violating antifraud provisions of the federal securities laws and charges SeaWorld with reporting violations. SeaWorld and Atchison have agreed to settle the SEC’s charges without admitting or denying the allegations, with SeaWorld paying a $4 million penalty and Atchison paying more than $1 million in fines and disgorgement.
SeaWorld’s former vice president of communications also agreed to settle a fraud charge for his role in misleading SeaWorld’s investors.
SeaWorld’s former vice president of communications, Frederick Jacobs, agreed to settle a fraud charge and to pay disgorgement and prejudgment interest of approximately $100,000. He was not assessed a penalty, reflecting his substantial assistance in the SEC’s investigation. All of the settlements are subject to court approval.
Former Owner of Investment Education Franchise Charged with Misleading Investors
The SEC announced charges against the former owner of a Texas-based investment education franchise for lying to dozens of investors in connection with a multimillion-dollar offering fraud.
According to the SEC’s complaint, Thomas Caufield persuaded more than 40 investors to invest over $6 million in his high-yield promissory notes by promising investors significant returns generated from the revenues of what he claimed was a profitable franchise.
Caufield allegedly used a combination of false pitches and offering materials to lure investors, including both students of the franchise and clients of DAT Capital Advisors, a former state-registered investment adviser wholly owned and operated by Caufield.
According to the complaint, Caufield misled investors about the franchise’s bleak financial condition, used new investor money to repay earlier investors, and falsely claimed that investors’ notes were secured by assets.
Without admitting or denying the allegations in the SEC’s complaint, Caufield consented to the entry of a final judgment that permanently restrains and enjoins him from violating these provisions, and from engaging in certain future activities in connection with the purchase, offer and sale of securities.
The final judgment orders disgorgement of $614,815 plus prejudgment interest of $126,032, both of which will be deemed satisfied by proceeds repaid to certain investors from Caufield’s 2018 sale of the franchise. Caufield also agreed to a $160,000 civil penalty and will be barred from further association with certain regulated entities.
SEC Charges Advisor, Senior Officers in Cherry-Picking Scheme
The SEC filed a complaint against World Tree Financial and its majority owner and co-founder, Wesley Kyle Perkins, for operating a cherry-picking scheme that defrauded World Tree clients.
The complaint alleges that for more than four years Perkins reaped substantial profits at his clients’ expense by cherry-picking trades.