The following is an excerpt from the CFTC website:
"Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge James B. Zagel of the U.S. District Court for the Northern District of Illinois entered a default judgment and permanent injunction against ForInvest Group (aka ForInvests Group LLC) (ForInvest).
The judgment, entered on June 17, 2011, finds that ForInvest solicited clients to open off-exchange leveraged foreign currency (forex) trading accounts and acted as the counterparty to its customers for all of the forex transactions in these accounts, without being registered as a retail foreign exchange dealer (RFED) with the CFTC. ForInvest has never been registered with the CFTC in any capacity.
The judgment arises from a CFTC complaint filed in the U.S. District Court for the Northern District of Illinois on January 26, 2011 against ForInvest, a Delaware limited liability company, charging it with two registration violations of the Commodity Exchange Act and CFTC regulations. ForInvest was one of 14 foreign currency firms sued by the CFTC in a nationwide sweep of firms allegedly illegally operating without registering with the CFTC (see CFTC Press Release 5974-11, January 26, 2011).
Judge Zagel’s order permanently bars ForInvest from engaging in the illegal conduct charged in the CFTC complaint and orders ForInvest to remove its forex solicitation webpages from the Internet. The order requires ForInvest to pay a $280,000 civil monetary penalty and permanently bars ForInvest from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.
This case is one of the first initiated by the CFTC to enforce new forex regulations that became effective on October 18, 2010. These new regulations require entities that wish to participate in the forex market to register with the CFTC and abide by regulations intended to protect the public.”
It looks like the CFTC is doing it’s job when it goes after 14 firms that are making illegal trades. The above is apparently only the first of many cases that the CFTC will bring forward.
This is a photo of the National Register of Historic Places listing with reference number 7000063
Tuesday, June 21, 2011
LIMITED LIABILITY COMPANY CEO CONSENTS TO JUDGMENT
The following is an excerpt from the SEC website:
"On June 13, 2011, the Honorable Reggie B. Walton of the U.S. District Court for the District of Columbia entered a final judgment against C. Gregory Earls, the former chairman and CEO of U.S. Technologies, Inc., in SEC v. U.S. Technologies, Inc. and C. Gregory Earls, C.A. No. 02-2495 (JR) (D.D.C.). Without admitting or denying the allegations in the Commission’s complaint, Earls consented to the entry of a final judgment which imposes injunctive relief and prohibits him from serving as an officer or director of a public company for a period of 20 years. The Commission agreed to forego its claims for disgorgement and civil penalties in light of the judgment against Earls in a parallel criminal case in which he was sentenced to over 10 years in prison and ordered to pay nearly $22 million in restitution.
The Commission’s complaint alleged that from June 1998 through August 2002, Earls misappropriated approximately $13.8 million from investors who believed they were giving Earls money to purchase preferred stock and warrants from U.S. Technologies, Inc. (“UST”). According to the complaint, Earls carried out this scheme through a limited liability company he created called USV Partners LLC. The complaint alleged that Earls falsely told investors in USV Partners that the entity was created solely to purchase and hold UST stock and warrants, and that he would not take any management fees. According to the complaint, Earls lured more than one hundred investors into giving him more than $20 million to purchase UST stock and warrants through USV Partners. As alleged in the complaint, although UST badly needed the capital infusion, only a portion of the $20 million received from USV Partners investors was used to purchase UST stock and warrants. The complaint alleged that Earls misappropriated $13.8 million of investors’ money by paying himself $4.7 million in management fees and $9.1 million that he falsely classified as “Legal and Accounting” expenses.
The final judgment against Earls: (i) permanently enjoins him from violating Section 17(a) of the Securities Act; Sections 10(b) and 13(b)(5) of the Securities Exchange Act and Rules 10b-5 and 13b2-1 thereunder; and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; and (ii) bars him from serving as an officer or director of a public company for a period of 20 years.
In a parallel criminal action, U.S. v. Earls, 1:03-CR-00364 (NRB) (S.D.N.Y.), Earls was previously convicted of 22 counts of criminal securities fraud, mail fraud and wire fraud, and was ordered to pay restitution of $21,971,628 and to serve a prison term of 125 months, followed by 3 years of supervised release.
This final judgment against Earls concludes the case. The other defendant, U.S. Technologies, Inc., previously consented to a final judgment ordering injunctive relief and, in a related administrative proceeding, a Commission order deregistering the company’s stock.”
"On June 13, 2011, the Honorable Reggie B. Walton of the U.S. District Court for the District of Columbia entered a final judgment against C. Gregory Earls, the former chairman and CEO of U.S. Technologies, Inc., in SEC v. U.S. Technologies, Inc. and C. Gregory Earls, C.A. No. 02-2495 (JR) (D.D.C.). Without admitting or denying the allegations in the Commission’s complaint, Earls consented to the entry of a final judgment which imposes injunctive relief and prohibits him from serving as an officer or director of a public company for a period of 20 years. The Commission agreed to forego its claims for disgorgement and civil penalties in light of the judgment against Earls in a parallel criminal case in which he was sentenced to over 10 years in prison and ordered to pay nearly $22 million in restitution.
The Commission’s complaint alleged that from June 1998 through August 2002, Earls misappropriated approximately $13.8 million from investors who believed they were giving Earls money to purchase preferred stock and warrants from U.S. Technologies, Inc. (“UST”). According to the complaint, Earls carried out this scheme through a limited liability company he created called USV Partners LLC. The complaint alleged that Earls falsely told investors in USV Partners that the entity was created solely to purchase and hold UST stock and warrants, and that he would not take any management fees. According to the complaint, Earls lured more than one hundred investors into giving him more than $20 million to purchase UST stock and warrants through USV Partners. As alleged in the complaint, although UST badly needed the capital infusion, only a portion of the $20 million received from USV Partners investors was used to purchase UST stock and warrants. The complaint alleged that Earls misappropriated $13.8 million of investors’ money by paying himself $4.7 million in management fees and $9.1 million that he falsely classified as “Legal and Accounting” expenses.
The final judgment against Earls: (i) permanently enjoins him from violating Section 17(a) of the Securities Act; Sections 10(b) and 13(b)(5) of the Securities Exchange Act and Rules 10b-5 and 13b2-1 thereunder; and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; and (ii) bars him from serving as an officer or director of a public company for a period of 20 years.
In a parallel criminal action, U.S. v. Earls, 1:03-CR-00364 (NRB) (S.D.N.Y.), Earls was previously convicted of 22 counts of criminal securities fraud, mail fraud and wire fraud, and was ordered to pay restitution of $21,971,628 and to serve a prison term of 125 months, followed by 3 years of supervised release.
This final judgment against Earls concludes the case. The other defendant, U.S. Technologies, Inc., previously consented to a final judgment ordering injunctive relief and, in a related administrative proceeding, a Commission order deregistering the company’s stock.”
Monday, June 20, 2011
SEC BRINGS ADDITIONAL FRAUD CHARGES AGAINST CO-FOUNDER OF CHINA VOICE HOLDING
Below is an additional release by the SEC regarding China Voice Holding. The following is and excerpt from the SEC website:
"On June 20, 2011, the Commission filed an amended complaint in the U.S. District Court for the Northern District of Texas (Dallas Division) in its case against the co-founder of China Voice Holding Corp., David Ronald Allen, and multiple other defendants. The SEC’s amended complaint charges China Voice, Allen, and William F. Burbank IV (China Voice’s former chairman and CEO) with reconstituting former subsidiaries of China Voice at Voice One Corp. without informing China Voice investors.
On April 28, 2011, the SEC filed a complaint in federal court in Texas, alleging that Allen, Burbank, and China Voice engaged in a series of false and misleading statements and material omissions to investors about China Voice’s financial condition. Today’s complaint alleges that this fraudulent behavior extended to renaming two China Voice subsidiaries and reconstituting them at Voice One and that Allen and Burbank are now involved in running Voice One.
Also as alleged in the SEC’s original complaint, Allen, with the assistance of two associates, launched what became an ongoing fraud that sought to raise at least $8.6 million from investors, telling them that their funds would be used to make loans to profitable businesses with demonstrated track records. The Commission alleged that contrary to what investors were told, proceeds were used to pay back earlier investors; to make payments to Allen and his associates; and to make payments to Allen-affiliated businesses, including China Voice. Today’s amended complaint alleges that Allen also used investor funds to make payments to Voice One, contradicting the disclosures made to investors. The amended complaint also names as a defendant yet another company used by Allen to help carry out the fraud on investors.
The SEC’s amended complaint charges Allen, Alex Dowlatshahi, Christopher Mills, and various related companies with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC’s amended complaint also charges China Voice, Burbank, and Allen for a series of fraudulent statements about China Voice’s financial condition and business prospects, as well as Gerald Patera, Ilya Drapkin, and Robert Wilson for their roles in the scheme, including violations of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. In addition to the preliminary relief, the SEC’s amended complaint seeks permanent injunctions, disgorgement, prejudgment interest, and financial penalties against all defendants, as well as penny stock bars against Allen, Burbank, Patera, Drapkin, and Wilson, and officer and director bars against Allen and Burbank.
The SEC’s investigation is ongoing."
"On June 20, 2011, the Commission filed an amended complaint in the U.S. District Court for the Northern District of Texas (Dallas Division) in its case against the co-founder of China Voice Holding Corp., David Ronald Allen, and multiple other defendants. The SEC’s amended complaint charges China Voice, Allen, and William F. Burbank IV (China Voice’s former chairman and CEO) with reconstituting former subsidiaries of China Voice at Voice One Corp. without informing China Voice investors.
On April 28, 2011, the SEC filed a complaint in federal court in Texas, alleging that Allen, Burbank, and China Voice engaged in a series of false and misleading statements and material omissions to investors about China Voice’s financial condition. Today’s complaint alleges that this fraudulent behavior extended to renaming two China Voice subsidiaries and reconstituting them at Voice One and that Allen and Burbank are now involved in running Voice One.
Also as alleged in the SEC’s original complaint, Allen, with the assistance of two associates, launched what became an ongoing fraud that sought to raise at least $8.6 million from investors, telling them that their funds would be used to make loans to profitable businesses with demonstrated track records. The Commission alleged that contrary to what investors were told, proceeds were used to pay back earlier investors; to make payments to Allen and his associates; and to make payments to Allen-affiliated businesses, including China Voice. Today’s amended complaint alleges that Allen also used investor funds to make payments to Voice One, contradicting the disclosures made to investors. The amended complaint also names as a defendant yet another company used by Allen to help carry out the fraud on investors.
The SEC’s amended complaint charges Allen, Alex Dowlatshahi, Christopher Mills, and various related companies with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC’s amended complaint also charges China Voice, Burbank, and Allen for a series of fraudulent statements about China Voice’s financial condition and business prospects, as well as Gerald Patera, Ilya Drapkin, and Robert Wilson for their roles in the scheme, including violations of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. In addition to the preliminary relief, the SEC’s amended complaint seeks permanent injunctions, disgorgement, prejudgment interest, and financial penalties against all defendants, as well as penny stock bars against Allen, Burbank, Patera, Drapkin, and Wilson, and officer and director bars against Allen and Burbank.
The SEC’s investigation is ongoing."
CFTC COMMISSIONER BART CHILTON COMMENDS SARKOZY
The following article is an excerpt from the CFTC website:
Statement on the Address by President Nicolas Sarkozy before the European Commission's Conference on Commodities and Raw Materials, Brussels
Commissioner Bart Chilton
June 14, 2011
"I commend President Sarkozy, not only for his leadership, but for his thoughtful understanding of the circumstances in which we find ourselves. The President got it exactly right when he spoke about the need for thoughtful regulations to address excessive speculation and the need to harmonize regulations. Appropriate speculative limits need to be instituted as soon as possible. I also completely agree on the need to avoid regulatory arbitrage where markets could migrate to the least regulation nation. We need to avoid a regulatory sidewalk sale and work together for harmonized rules that make markets more transparent and more competitive."
Last Updated: June 14, 2011
Statement on the Address by President Nicolas Sarkozy before the European Commission's Conference on Commodities and Raw Materials, Brussels
Commissioner Bart Chilton
June 14, 2011
"I commend President Sarkozy, not only for his leadership, but for his thoughtful understanding of the circumstances in which we find ourselves. The President got it exactly right when he spoke about the need for thoughtful regulations to address excessive speculation and the need to harmonize regulations. Appropriate speculative limits need to be instituted as soon as possible. I also completely agree on the need to avoid regulatory arbitrage where markets could migrate to the least regulation nation. We need to avoid a regulatory sidewalk sale and work together for harmonized rules that make markets more transparent and more competitive."
Last Updated: June 14, 2011
SEC STAFF RESPONDS TO QUESTIONS ABOUT MONEY MARKET FUNDS
The following is an excerpt from the SEC web site:
“Question 1
Q: Under new SEC rules, money market funds must report their portfolio holdings and other information to the SEC on Form N-MFP. Will this information be available to the public?
A: Yes, on a 60-day delayed basis. Rule 30b1-7(b) states that the "Commission will make the information filed on Form N-MFP available to the public 60 days after the end of the month to which the information pertains." For example, information reported on Form N-MFP for November 2010 will be available 60 days after November 30. Because the 60th day after November 30 (January 29, 2011) is a Saturday, the information will be available to the public the next business day (Monday, January 31, 2011). More recent but less detailed information about money market fund portfolio holdings is available on fund websites, and that information must be posted within 5 business days after the end of the month.
Question 2
Q: How do I find the publicly available information that money market funds file on Form N-MFP?
A: Information filed on Form N-MFP will be available on the Commission's Electronic Data Gathering, Analysis and Retrieval web page ("EDGAR"), which is at http://www.sec.gov/edgar.shtml. You can retrieve the information in different ways, including a readable format in which information corresponds to the items of the form, or the data format the fund used to submit the information to the Commission (eXtensible Markup Language or "XML").
Useful links on the Commission's website include "Search for Company Filings" (http://www.sec.gov/edgar/searchedgar/webusers.htm), where you can enter the fund's ticker symbol. You can also find links to this information through money market funds' websites that include portfolio holdings information. In addition, it is likely that financial publications will include some of the publicly available information filed on Form N-MFP by money market funds.
Question 3
Q: Money market funds report the "shadow price" of their net asset value ("NAV") per share on Form N-MFP (Items 18 and 25). What is a shadow price?
A: A money market fund's shadow price is the NAV per share most recently calculated using available market quotations (or an appropriate substitute that reflects current market conditions). In other words, it is the NAV that reflects the current market value of the securities the fund owns, rather than the amortized cost of those securities. SEC rules permit a money market fund to value its securities at cost and spread out (or amortize) any discounts given or premiums paid on the securities when the fund acquired them. SEC rules also permit a fund to round the cost-based NAV to the nearest penny per share. Both of these provisions, combined with the strict limits on money market fund investments under SEC rules, enable a money market fund to maintain a stable NAV, typically $1 per share.
Question 4
Q: What does it mean if a money market fund's shadow price NAV differs from the $1 per share at which the fund sells and redeems its shares?
A: Because the markets are constantly changing, a money market fund's market based (shadow price) NAV is constantly changing too. Therefore it is not uncommon for a fund's shadow price NAV per share to differ from exactly $1.0000 per share, for example due to interest rate changes that affect securities values in a fund's portfolio. As long as the fund's shadow price NAV per share is at least 99½ cents (or $0.995) and no greater than 100½ cents (or $1.005), the fund can continue to sell and redeem shares at $1 per share. If a money market fund's shadow price NAV per share goes outside these limits, the fund may need to re-price its shares at a value other than $1 per share, an event known as "breaking the buck." In the past couple of decades since money market funds began, two money market funds have broken the buck. It is also important to remember that the shadow price NAV shown on publicly available Form N-MFP information is at least 60 days old and is likely not the fund's current shadow price NAV. More recent monthly information (including portfolio holdings but not necessarily including shadow prices) is available on money market fund websites. Some money market funds post information on their websites more often than monthly.
Question 5
Q: Where can I find out more about money market funds, net asset values, etc.?
A: SEC publications you may find useful include:
Investor Bulletin: Focus on Money Market Funds (http://www.sec.gov/investor/alerts/mmf-investoralert.htm)
Mutual Funds: A Guide for Investors (http://www.sec.gov/investor/pubs/sec-guide-to-mutual-funds.pdf)
http://www.sec.gov/divisions/investment/guidance/formn-mfpqa-info.htm "
“Question 1
Q: Under new SEC rules, money market funds must report their portfolio holdings and other information to the SEC on Form N-MFP. Will this information be available to the public?
A: Yes, on a 60-day delayed basis. Rule 30b1-7(b) states that the "Commission will make the information filed on Form N-MFP available to the public 60 days after the end of the month to which the information pertains." For example, information reported on Form N-MFP for November 2010 will be available 60 days after November 30. Because the 60th day after November 30 (January 29, 2011) is a Saturday, the information will be available to the public the next business day (Monday, January 31, 2011). More recent but less detailed information about money market fund portfolio holdings is available on fund websites, and that information must be posted within 5 business days after the end of the month.
Question 2
Q: How do I find the publicly available information that money market funds file on Form N-MFP?
A: Information filed on Form N-MFP will be available on the Commission's Electronic Data Gathering, Analysis and Retrieval web page ("EDGAR"), which is at http://www.sec.gov/edgar.shtml. You can retrieve the information in different ways, including a readable format in which information corresponds to the items of the form, or the data format the fund used to submit the information to the Commission (eXtensible Markup Language or "XML").
Useful links on the Commission's website include "Search for Company Filings" (http://www.sec.gov/edgar/searchedgar/webusers.htm), where you can enter the fund's ticker symbol. You can also find links to this information through money market funds' websites that include portfolio holdings information. In addition, it is likely that financial publications will include some of the publicly available information filed on Form N-MFP by money market funds.
Question 3
Q: Money market funds report the "shadow price" of their net asset value ("NAV") per share on Form N-MFP (Items 18 and 25). What is a shadow price?
A: A money market fund's shadow price is the NAV per share most recently calculated using available market quotations (or an appropriate substitute that reflects current market conditions). In other words, it is the NAV that reflects the current market value of the securities the fund owns, rather than the amortized cost of those securities. SEC rules permit a money market fund to value its securities at cost and spread out (or amortize) any discounts given or premiums paid on the securities when the fund acquired them. SEC rules also permit a fund to round the cost-based NAV to the nearest penny per share. Both of these provisions, combined with the strict limits on money market fund investments under SEC rules, enable a money market fund to maintain a stable NAV, typically $1 per share.
Question 4
Q: What does it mean if a money market fund's shadow price NAV differs from the $1 per share at which the fund sells and redeems its shares?
A: Because the markets are constantly changing, a money market fund's market based (shadow price) NAV is constantly changing too. Therefore it is not uncommon for a fund's shadow price NAV per share to differ from exactly $1.0000 per share, for example due to interest rate changes that affect securities values in a fund's portfolio. As long as the fund's shadow price NAV per share is at least 99½ cents (or $0.995) and no greater than 100½ cents (or $1.005), the fund can continue to sell and redeem shares at $1 per share. If a money market fund's shadow price NAV per share goes outside these limits, the fund may need to re-price its shares at a value other than $1 per share, an event known as "breaking the buck." In the past couple of decades since money market funds began, two money market funds have broken the buck. It is also important to remember that the shadow price NAV shown on publicly available Form N-MFP information is at least 60 days old and is likely not the fund's current shadow price NAV. More recent monthly information (including portfolio holdings but not necessarily including shadow prices) is available on money market fund websites. Some money market funds post information on their websites more often than monthly.
Question 5
Q: Where can I find out more about money market funds, net asset values, etc.?
A: SEC publications you may find useful include:
Investor Bulletin: Focus on Money Market Funds (http://www.sec.gov/investor/alerts/mmf-investoralert.htm)
Mutual Funds: A Guide for Investors (http://www.sec.gov/investor/pubs/sec-guide-to-mutual-funds.pdf)
http://www.sec.gov/divisions/investment/guidance/formn-mfpqa-info.htm "
Sunday, June 19, 2011
SEC ALLEGES JUPITER GROUP CAPITAL ADVISORS MADE FALSE STATEMENTS TO SEC
The following case is an excerpt from the SEC web site:
“Litigation Release No. 21961 / May 10, 2011
SEC CHARGES INVESTMENT FIRM AND ITS PRESIDENT WITH FALSE STATEMENTS
Firm and President Refused to Comply with SEC Requests to Examine Records
The Securities and Exchange Commission today announced it has obtained a court order against an investment firm purportedly located in Kirkland, Wash., and its president, who lives in Honolulu, for making false statements in a report to the SEC and refusing to allow the Commission’s staff to review the firm’s books and records.
U.S. District Court Judge Leslie E. Kobayashi issued a temporary restraining order on May 9 requiring the firm to produce the firm’s books and records for examination and providing additional equitable relief.
The SEC alleges that Jupiter Group Capital Advisors LLC and Rick Cho falsely reported that the advisory firm managed $153 million in 38 investor accounts. The false statements were made on Jupiter Group’s Form ADV filing – the public form used by investment advisers to register with the SEC or state securities authorities. When SEC staff sought to conduct an examination of Jupiter Group after the filing was made, Cho initially failed to respond and then later claimed that the filing referred to estimated future assets and stated that Jupiter Group has no client accounts.
According to the SEC’s complaint, Cho refused to provide any evidence for his claim that the assets identified on Jupiter Group’s March 2010 Form ADV filing with the SEC belong to an unrelated business venture. He also failed to explain why the document originally filed in October 2009 was amended to show an increased number of clients and assets under management, when in reality there weren’t any client accounts. The SEC alleges that Jupiter Group did not manage $25 million or more of client assets for any reporting period, and therefore was not eligible for SEC registration. In addition, from December 2010 to the present, Jupiter Group and Cho have refused to submit to an examination.
The SEC alleges that Jupiter Group violated Sections 203A, 204, and 207 of the Investment Advisers Act, and that Cho violated Section 207 of the Advisers Act and aided and abetted Jupiter Group’s violations of Sections 203A and 204 of the Advisers Act. The parties stipulated to the terms of the May 9 temporary restraining order prohibiting Jupiter Group from making false statements in Commission filings, and orders requiring Jupiter Group to submit to an examination of its books and records, requiring withdrawal of Jupiter Group’s Form ADV, prohibiting Jupiter Group and Cho from destroying documents, requiring accountings, and granting expedited discovery. The Commission also requested a preliminary injunction, permanent injunction, and civil penalties. The court set a hearing regarding the preliminary injunction for May 31, 2011 at 9:45 a.m.”
“Litigation Release No. 21961 / May 10, 2011
SEC CHARGES INVESTMENT FIRM AND ITS PRESIDENT WITH FALSE STATEMENTS
Firm and President Refused to Comply with SEC Requests to Examine Records
The Securities and Exchange Commission today announced it has obtained a court order against an investment firm purportedly located in Kirkland, Wash., and its president, who lives in Honolulu, for making false statements in a report to the SEC and refusing to allow the Commission’s staff to review the firm’s books and records.
U.S. District Court Judge Leslie E. Kobayashi issued a temporary restraining order on May 9 requiring the firm to produce the firm’s books and records for examination and providing additional equitable relief.
The SEC alleges that Jupiter Group Capital Advisors LLC and Rick Cho falsely reported that the advisory firm managed $153 million in 38 investor accounts. The false statements were made on Jupiter Group’s Form ADV filing – the public form used by investment advisers to register with the SEC or state securities authorities. When SEC staff sought to conduct an examination of Jupiter Group after the filing was made, Cho initially failed to respond and then later claimed that the filing referred to estimated future assets and stated that Jupiter Group has no client accounts.
According to the SEC’s complaint, Cho refused to provide any evidence for his claim that the assets identified on Jupiter Group’s March 2010 Form ADV filing with the SEC belong to an unrelated business venture. He also failed to explain why the document originally filed in October 2009 was amended to show an increased number of clients and assets under management, when in reality there weren’t any client accounts. The SEC alleges that Jupiter Group did not manage $25 million or more of client assets for any reporting period, and therefore was not eligible for SEC registration. In addition, from December 2010 to the present, Jupiter Group and Cho have refused to submit to an examination.
The SEC alleges that Jupiter Group violated Sections 203A, 204, and 207 of the Investment Advisers Act, and that Cho violated Section 207 of the Advisers Act and aided and abetted Jupiter Group’s violations of Sections 203A and 204 of the Advisers Act. The parties stipulated to the terms of the May 9 temporary restraining order prohibiting Jupiter Group from making false statements in Commission filings, and orders requiring Jupiter Group to submit to an examination of its books and records, requiring withdrawal of Jupiter Group’s Form ADV, prohibiting Jupiter Group and Cho from destroying documents, requiring accountings, and granting expedited discovery. The Commission also requested a preliminary injunction, permanent injunction, and civil penalties. The court set a hearing regarding the preliminary injunction for May 31, 2011 at 9:45 a.m.”
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