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This is a photo of the National Register of Historic Places listing with reference number 7000063
Showing posts with label EMBEZZLEMENT. Show all posts
Showing posts with label EMBEZZLEMENT. Show all posts

Sunday, April 13, 2014

MAN CHARGED BY SEC WITH DEFRAUDING HIS ADVISORY CLIENTS

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 
SEC Charges James Y. Lee for Defrauding His Advisory Clients

On February 13, 2014, the Securities and Exchange Commission filed charges against James Y. Lee, a resident of La Jolla, California, alleging he defrauded his advisory clients.

The SEC's complaint, filed in federal district court in San Diego, alleges that Lee portrayed himself to prospective clients as a highly successful financial industry expert. According to the complaint, Lee recruited clients to open online brokerage accounts, including margin accounts in which he had discretionary authority to trade in options. He also charged his clients a management fee of as much as 50% of their monthly realized profits and promised clients that he would share equally in 50% of their realized losses. But when Lee's clients suffered large realized losses, he failed to reimburse most of them for his promised share.

The complaint alleges that Lee defrauded his clients in several ways. He charged some clients fees for the month of February 2011 based on false performance and concealed from them that they had actually incurred realized losses that month. In addition, he misled clients about his background, including failing to disclose a criminal conviction for embezzlement and an SEC cease-and-desist order for his role in illegal unregistered penny stock offerings. He also misled clients about his promise to share in realized losses and the risks of his options trading strategy. Furthermore, he traded in penny stocks in client accounts outside of his discretionary authority, and fraudulently induced one client to loan money to a penny stock company.

The complaint charges Lee with violating the antifraud provisions of the federal securities laws - Section 17(a) of the Securities Act of 1933, Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and Section 206(1) and (2) of the Investment Advisors Act of 1940. The SEC is seeking a permanent injunction as well as disgorgement, prejudgment interest and civil penalties against Lee.

The complaint names several relief defendants including Lee's girlfriend, his son and his close business associate as well as their respective companies. According to the complaint, Lee diverted investor funds to all of the relief defendants to avoid holding assets in his own name.

In a related matter, on February 12, 2014, the SEC settled administrative and cease-and-desist proceedings against Ronald E. Huxtable II, of Palm Coast Florida. (Rel. 33-9547) In those proceedings the SEC found that Huxtable, one of Lee's clients, aided, abetted and caused Lee's violations by helping Lee charge certain clients fees for the month of February 2011 based on false performance and conceal the fact that they had actually incurred net realized losses for that month.

The SEC's investigation was conducted by Jennifer Peltz and Delia Helpingstine and supervised by Paul Montoya. The SEC's litigation will be led by Michael Foster.

Wednesday, February 19, 2014

COURT ORDERS ACCUSED EMBEZZLER TO PAY $5.2 MILLION

FROM:  COMMODITY FUTURES TRADING COMMISSION 
Federal Court Orders North Carolina Resident Michael Anthony Jenkins and his Company, Harbor Light Asset Management, to Pay over $5.2 Million for Solicitation Fraud, Misappropriation, and Embezzlement in a Ponzi Scheme

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge James C. Fox of the U.S. District Court for the Eastern District of North Carolina entered an Order for a permanent injunction against Defendants Harbor Light Asset Management, LLC (HLAM) and its President and owner, Michael Anthony Jenkins, both of Raleigh, North Carolina. The Order requires HLAM and Jenkins jointly to pay restitution totaling $1,301,406.60 and a civil monetary penalty of $3,904,219.80. The Order also imposes permanent trading and registration bans against the Defendants and prohibits them from violating the Commodity Exchange Act and CFTC Regulations, as charged.

The Order stems from a CFTC Complaint filed on November 20, 2012 (see CFTC Press Release 6422-12, November 23, 2012), charging HLAM and Jenkins with operating a Ponzi scheme and fraudulently soliciting at least $1.79 million from approximately 377 persons, primarily in North Carolina, in connection with the scheme.

The Order finds that the Defendants made use of an HLAM Investment Agreement to falsely represent to HLAM Investors that their investment funds were used solely for investment in E-mini futures and that the funds would be wired to a specific trading account. To cover up and further the fraud, Jenkins sent spreadsheets and statements that reported false trades, profits, and inflated the value of HLAM’s investments. In addition, the Order finds that Jenkins acted within the scope of his employment by HLAM and committed embezzlement and failed to register with the CFTC as a Futures Commission Merchant.

The CFTC thanks the Securities Division of the North Carolina Department of the Secretary of State for its cooperation and assistance.

CFTC Division of Enforcement staff members responsible for this case are Xavier Romeu-Matta, Nathan Ploener, Christopher Giglio, Lenel Hickson, Jr., and Manal M. Sultan.