Securities Fraud Lawyer Blog

On August 25, 2015 the Securities and Exchange announced that James R. Glover, a former registered representative with Signator Investors, Inc. submitted an Offer of Settlement which the SEC accepted. Solely for the purpose of the SEC’s proceedings and without admitting or denying the findings herein, James R. Glover agreed to the findings that he engaged in a fraudulent offering scheme and investment advisory fraud.

The complaint alleged that from approximately January 1999 through May 2012, Glover raised over $13,000,000 from over 100 customers by soliciting them to invest in Colonial Tidewater. The complaint alleged that Glover solicited investments in Colonial Tidewater through materially false and misleading statements regarding the financial health of Colonial Tidewater, the expected returns and risk of investing, and his personal financial stake in the unregistered offerings.

The complaint further alleged that Glover misappropriated substantial sums from investors.

On  September 8, 2015 the SEC barred Marc Mandel of Boulder, CO who called himself  the “Wizard of Wall Street” from selling stocks, and ordered him to pay fines to the Commission.

Mandel, CEO of Wall Street Radio Inc. and host of the radio show “Winning on Wall Street” accepted the cease-and-desist order without admitting or denying the findings.

According to the SEC’s AWC, Mandel partnered with Ditto Holdings Inc. the owner of FINRA broker dealer Ditto Trade, in order to introduce his newsletter subscribers to Ditto Trades’ securities offerings.

On September 9, 2015 the Securities and Exchange announced administrative and cease and desist proceedings against Dawn J. Bennett a former registered representative with Western International Securities in Washington, D.C.

The SEC’s complaint alleges that from 2009 through February 2011, Bennett Group Financial and Bennett, made material misstatements and omissions regarding assets that were purportedly “managed” for investors and regarding investment returns for the purpose of retaining existing customers and attracting new customers. Then, during the investigation of this matter, Bennett and Bennett Group made additional misstatements in an effort to obstruct the investigation and to “cover up” their alleged prior fraud.

The SEC claims that Bennett and Bennett Group grossly overstated the amount of assets they managed in a calculated effort to inflate their profile and prestige. They made the false and fraudulent claims to a national financial advisor ranking service knowing that the ranking service would publish the misstatements. They also made the misstatements on a Washington, D.C.–area radio program hosted by Bennett, and in a variety of other advertisements and communications with existing and prospective customers and clients. The purpose of these overstatements was to create the impression that Bennett and Bennett Group were larger and more successful players in the industry than they were.

On January 6, 2016 the SEC charged Sheik Khan (aka Abida Khan,) a registered representative formerly with Ameritas Investment Corp. out of Murrieta, CA with violations of Section 10 of the Exchange Act and Rule 10(b)(5) and Section 206 of the Advisors Act.

The complaint against Sheik Khan arises from a claim the SEC brought against Edward Durante, who is accused of defrauding at least 50 unsophisticated investors of $11 million through the sale of securities of VGTel, Inc., a shell company he controlled.

According to the SEC’s complaint Edward Durante defrauded investors by selling approximately six million shares of VGTel stock to investors using a fictitious name to hide his criminal past and lying to investors regarding the use of stock sale proceeds.  Durante also bribed investment advisers, who advised their clients to purchase VGTel stock without disclosing to their clients that they had been bribed. Durante also engaged in matched trading of VGTel stock with a stockbroker to artificially control the stock’s market price.

On January 6, 2016 the SEC charged Larry Werbel, a registered representative formerly with Summit Brokerage Services of Chagrin Falls, OH with violations of Section 10 of the Exchange Act and Rule 10(b)(5) and Section 206 of the Advisors Act.

The complaint against Larry Werbel arises from a claim the SEC brought against Edward Durante, who is accused of defrauding at least 50 unsophisticated investors of $11 million through the sale of securities of VGTel, Inc., a shell company he controlled.

According to the SEC’s complaint Edward Durante defrauded investors by selling approximately six million shares of VGTel stock to investors using a fictitious name to hide his criminal past and lying to investors regarding the use of stock sale proceeds.  Durante also bribed investment advisers, who advised their clients to purchase VGTel stock without disclosing to their clients that they had been bribed. Durante also engaged in matched trading of VGTel stock with a stockbroker to artificially control the stock’s market price.

On September 30, 2015 the Securities and Exchange announced that Edward Borg submitted an Offer of Settlement. Solely for the purpose of the SEC’s proceedings and without admitting or denying the findings herein, Edward Borg consented to the findings that he periodically manipulated the market for Natural Alternatives International, Inc.’s (“NAII”) common stock between 2003 through 2011.

Edward Borg engaged in manipulative trading to support the price of NAII stock and to give the false appearance of investor interest. He directed trading in several of his customers’ accounts, personally invested heavily in NAII and had several of his customers invest heavily in NAII, often in high concentrations (more than 90% of the account’s total value) and frequently on margin.

In connection with one All Funds customer, Borg recommended that she invest in NAII almost exclusively, which was not suitable in light of her investment objectives. During this period, Borg personally owned as much as 22.5 percent of NAII’s outstanding stock, and customers at All Funds, combined with Borg’s personal holdings, owned as much as 55 percent of the outstanding shares of NAII.