On August 2, 2021, the Securities and Exchange Commission (“SEC”) announced whistleblower awards of more than $4 million to four whistleblowers who provided information and assistance to the SEC in two separate enforcement proceedings.

In the first enforcement proceeding, a whistleblower was awarded more than $2 million for providing the regulator with information that launched an investigation.  The informant also provided the SEC with ongoing assistance by participating in interviews and identifying key individuals and entities.  Another whistleblower was issued an award of $150,000 for providing the SEC with information that resulted in an expansion of the investigation.

In the second enforcement action, the SEC awarded more than $1.6 million to two whistleblowers.  The first individual provided the SEC with information that alerted the SEC to the violations and was awarded $1.1 million. The second whistleblower was awarded $500,000 for providing significant and timely information.

FINRA has suspended Aegis Capital broker Gilbert Kuta from the securities industry for ten days for exercising discretion without written authorization in customers’ accounts, in violation of NASD Rule 2510(b) and FINRA Rule 2010.

The alleged misconduct is said to have taken place from December 2017 through June 2018 while Mr. Kuta was registered with Capitol Securities Management, Inc. Mr. Kuta was also fined $5,000.

Mr. Kuta’s suspension is scheduled to begin on August 16, 2021, and end on August 27, 2021.

Iorio Altamirano LLP is investigating potential claims involving investments in L Bonds offered by GWG Holdings (Nasdaq: GWGH).

On July 26, 2021, GWG Holdings canceled its Combined 2020/2021 Annual Meeting of Stockholders originally convened and adjourned on May 28, 2021.

Prior to this cancellation, on July 7, 2021, Nasdaq warned GWG Holdings that it risked the potential delisting of its stock over the company’s failure to hold an annual meeting of shareholders and file its most recent Forms 10-K and 10-Q on time.

FINRA has suspended Fusion Analytics Securities, LLC’s former Chief Compliance Officer Luis Fernando Restrepo from the securities industry for a six-month period over compliance and supervisory failures related to, among other things, the sale of private placements. Mr. Restrepo consented to a six-month suspension from associating with any FINRA member in all principal capacities and will have to requalify as a principal prior to acting in that capacity with any FINRA member.

During his association with Fusion, Mr. Restrepo was the firm’s Chief Compliance Officer (CCO) and Anti-Money Laundering Compliance Officer (AMLCO).

Mr. Restrepo’s suspension is scheduled to begin on August 2, 2021, and end on February 1, 2022.

FINRA has barred former LPL Financial LLC broker Jason LaBelle from the securities industry. Mr. LaBelle was expelled from the brokerage industry for failing to provide information requested pursuant to FINRA Rule 8210, in connection with a FINRA investigation of Mr. LaBelle’s possible violation of a prior AWC.

Back in January 2020, FINRA accepted an AWC in which Mr. LaBelle consented to the entry of findings that, while associated with LPL, he participated in an outside business activity without having provided prior written notice to his firm. The AWC suspended Mr. LaBelle from associating with any FINRA member firm in all capacities for three months and imposed a $5,000 fine.

By refusing to produce information and documents, Mr. LaBelle violated FINRA Rules 8210 and 2010.

The Financial Industry Regulatory Authority (“FINRA”) has barred financial advisor Enoch Booth from the securities industry for refusing to cooperate with a FINRA investigation into whether Mr. Booth engaged in unauthorized private securities transactions and outside business activities.  FINRA launched the investigation after Valic Financial Advisors, Inc. terminated Mr. Booth’s employment in December 2020 and alleged that Mr. Booth failed to disclose a series of private securities transactions, failed to disclose a self-directed IRA, and provided gift cards to clients in violation of firm policy.  Mr. Booth was associated with Valic Financial Advisors, Inc. in Columbia, South Carolina, from May 2001, until December 2020.

When a financial advisor participates in a private securities transaction that is not approved by a firm, it is referred to as “selling away.”  The prohibitions on selling away are designed to protect investors by ensuring that all brokers’ activities are reasonably supervised by firms that employ them.  Further, securities that are sold away from a firm have not been vetted by the firm.

Customers of Mr. Booth or Valic Financial Advisors, Inc. that have suffered financial losses can contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of their legal rights.

On July 21, 2021, the Securities and Exchange Commission (“SEC”) announced an award of nearly $3 million to a whistleblower who alerted the SEC to previously unknown conduct that led to a successful SEC enforcement action.  According to Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower, the whistleblower “provided substantial additional assistance” to the SEC, which resulted in the SEC saving a “considerable amount of SEC resources.”

In total, the SEC has awarded over $942 million to 186 individuals since the whistleblower program became effective in August 2011. The awards are paid out of an investor protection fund established by Congress financed entirely through monetary sanctions paid to the SEC by securities law violators. Money is not taken or withheld from harmed investors to pay whistleblower awards.

Congress established the whistleblower program to incentivize whistleblowers with specific, timely, and credible information about federal securities law violations to report to the SEC.  A whistleblower may receive an award if they voluntarily provide the SEC with qualifying information, leading to successful enforcement. The award can range from 10 percent to 30 percent of the money collected due to the enforcement action.

StockCross Financial Services, Inc. (“StockCross Financial”), which was acquired by Muriel Siebert & Co., Inc. (“Muriel Siebert”), consented to a censure and $250,000 fine in connection with FINRA’s findings that between July 2009 and December 2019, StockCross Financial had no reasonable surveillance system to review solicited transactions for excessive trading and suitability.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms, such as StockCross Financial Services, Inc.

If you have lost money with StockCross Financial Services, Inc., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

On July 15, 2021, the Securities and Exchange Commission (“SEC”) announced an award of more than $1 million to a whistleblower.  According to Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower, the whistleblower “played a crucial role” by providing the SEC with valuable information and ongoing assistance.

In 2021, the SEC has now awarded over $200 million to whistleblowers. Since the whistleblower program became effective in August 2011, the SEC has awarded over $939 million to 182 individuals.  The awards are paid out of an investor protection fund established by Congress financed entirely through monetary sanctions paid to the SEC by securities law violators. Money is not taken or withheld from harmed investors to pay whistleblower awards.

Congress established the whistleblower program to incentivize whistleblowers with specific, timely, and credible information about federal securities law violations to report to the SEC.  A whistleblower may receive an award if they voluntarily provide the SEC with qualifying information, leading to successful enforcement. The award can range from 10 percent to 30 percent of the money collected due to the enforcement action.

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