Securities Fraud Cases: Wedbush to Pay $813K Over Investment Fraud Allegations, SEC Files Pump-and-Dump Charges in Marley Coffee Case, and CFTC Accuses IB Capital of Soliciting $50M for Forex Trading While Unregistered

Wedbush to Pay Trusts, Family Members Over $813,000
A Financial Industry Regulatory Authority Panel says that Wedbush securities and investment advisor Kevin Thomas Scarpelli must jointly and severally pay several investors over $813,000 to resolve allegations of professional negligence and failure to supervise related to investments made in Natural Resources USA Corp. The respondents denied the allegations and asked that the claims be thrown own.

After considering the pleadings, evidence, and testimony, the panel decided that Wedbush and Scarpelli must pay claimants: Mary L. Riscornia TTEE nearly $263,000, Jennifer Tiscornia over $252,313, Nicolas E. Toussaint over $55,300, Nicolas E. Toussaint TTEE over $1800, Michael J. Nicolai over $18,4000, Michael Nicolai TTEE over $156,221, Jeffrey M. Nicolai over $22,154, Katherine M. Nicolai over $22,000 and Alexandria P. Nicolai over $22,000 in damages, interest, legal fees, and costs. The FINRA panel denied Scarpelli’s request to have his record expunged of this securities case.

SEC Files Charges in $78M Pump-and-Dump Scam Involving Jammin’ Java Stock, Marley Trademark
The Securities and Exchange Commission is accusing ex-Jammin’ Java CEO Shane Whittle of masterminding a $78 million pump-and-dump scam involving the company’s shares. Jammin’ Java operates Marley Coffee, which uses the late reggae legend Bob Marley’s trademark to sell products.

According to the regulator, Whittle used a reverse merger to-in secret-get control of millions of Jammin’ Java shares, which he then spread to offshore entities under the control of Michael Sun, Wayne Weaver, and René Berlinger. The shares were dumped on the public after their price rose in the wake of bogus promotional campaigns. Whittle purportedly hid the scam by making misleading omissions and statements in reports submitted to the SEC.

Meantime, Kevin Miller and Stephen Wheatley and Mohammed Al-Barwani of Oman are charged with using their offshore entities to facilitate the illegal offering. Twins Thomas and Alexander Hunter are charged with fraudulently marketing Jammin’ Java stock to investors. They purportedly published bogus stock newsletters and took other actions to cause the stocks to rise dramatically. The SEC says that the defendants made millions of dollars in illicit profits at the invested public’s expense while dumping 45 million inflated Jammin’ Java stock shares on the public without registering the transactions.

IB Capital FX Faces CFTC Charges for Soliciting at Least $50M While Unregistered
The U.S. Commodity Futures Trading Commission is accusing IB Capital FX, Michael Geurkik, and Emad Echadi with soliciting at least $50 million from at least 960 clients for off-exchange margined retail foreign currency (forex) trading. The firm purportedly did this while unregistered with the regulator, even though registration is a requirement. The CFTC says that from 1/1/12 through 9/18/12, the defendants took part in the offering of transactions, contracts, and agreements in forex to retail customers that were not eligible participants.

The CFTC wants rescission, restitution, civil monetary penalties, disgorgement, registration bans, trading bans, and permanent injunctions from future violations of CFTC and CEA regulations. The regulator recently warned investors that there has been a sharp increase in Forex trading scams.

Read the complaint in the SEC Pump and Dump Case (PDF)

CFTC Charges IB Capital FX, LLC, Michel Geurkink, and Emad Echadi with Soliciting at Least $50 Million from Members of the Public for Forex Trading, without Being Registered with the CFTC, CFTC, November 16, 2015