Insider Traders Returning Illegal Profits and Kickbacks

The Securities and Exchange Commission today announced that a Florida man trading on inside information ahead of a pharmaceutical company merger and a friend who tipped him have agreed to settle enforcement actions against them. Jay Y. Fung has agreed to pay back more than $700,000 in illegal profits plus more than $60,000 in interest earned after allegedly purchasing stock and call options in Pharmasset Inc. based on his friend’s tip that it was about to be acquired. The SEC alleges that Fung cashed in when Pharmasset’s stock rose 84 percent after its acquisition by Gilead Sciences was publicly announced,…

California Water District to Pay Penalty for Misleading Investors

Published on Mar 9th, 2016

The Securities and Exchange Commission today charged California’s largest agricultural water district with misleading investors about its financial condition as it issued a $77 million bond offering. In addition to charging Westlands Water District, the SEC charged its general manager Thomas Birmingham and former assistant general manager Louie David Ciapponi. According to the SEC’s order instituting a settled administrative proceeding: Westlands agreed in prior bond offerings to maintain a 1.25 debt service coverage ratio, which is a measure of an issuer’s ability to make future bond payments. Westlands learned in 2010 that drought conditions and reduced water supply would…

Money Returning to Investors Harmed by Unregistered Broker

Published on Mar 9th, 2016

The Securities and Exchange Commission today announced that a Cyprus-based company has agreed to pay $11 million to settle charges that it illegally sold binary options to U.S. investors. A judge signed a court order late yesterday authorizing the distribution of this money to harmed investors through a Fair Fund. The SEC filed a complaint in 2013 against Banc de Binary Ltd., its founder Oren Shabat Laurent, and three affiliates alleging that they failed to register the offering before soliciting U.S. customers through YouTube videos, spam e-mails, and other Internet advertising. They failed to register as a broker-dealer before communicating directly…

SEC Awarding Nearly $2 Million to Three Whistleblowers

Published on Mar 8th, 2016

The Securities and Exchange Commission today announced the payment of almost $2 million to three whistleblowers. The largest of the three awards will go to a whistleblower who voluntarily provided original information that prompted the SEC to open its investigation. That whistleblower, who will receive about $1.8 million, continued to provide valuable information throughout the investigation. The other two whistleblowers will receive approximately $65,000 each for providing information after the investigation started. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. The SEC’s whistleblower program has…

SEC Announces Charges Against Unregistered Fund Manager Accused of Hiding Criminal Past

Published on Mar 8th, 2016

The Securities and Exchange Commission today announced fraud charges against an unregistered fund manager accused of hiding his checkered past while providing false and misleading data to investors and an independent research firm. “We allege that Steven Zoernack deceived investors by spreading false and misleading fund information while doing everything possible to bury his criminal history and troubling financial record,” said Antonia Chion, Associate Director of the SEC’s Enforcement Division. The SEC’s Enforcement Division alleges in an administrative proceeding against Zoernack and his firm EquityStar Capital Management: They fraudulently offered and sold at least $5.6 million of interests in a…