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The US Securities and Exchange Commission has filed fraud charges against investment adviser Amrit J.S. Chahal, who founded Kane Capital investment Group, LLC. Chahal is accused of using his company to solicit about $1.4M from about 50 people, some of them friends and family members. Now, the regulator wants a permanent injunction, penalties, and disgorgement.

According to the SEC’s securities fraud complaint, from at least 2/2015, Chahal targeted prospective investor by telling him he was a seasoned trader who could make clients “above-market returns” by employing a trading strategy whose risks were low. In truth, contends the Commission, Chahal had no previous substantive experience in the securities industry or in trading securities for others.

Investors gave Chahal their money with the understanding that he would use the funds to buy and sell futures, options, and commodities. He told them they would have to pay a $2.5% yearly fee and a performance-based fee that was 10% of an investor’s returns that went beyond a yearly 30% return rate. Chahal also falsely claimed that Kane Capital employed the most current software to help it garner the “highest possible profit” from every investment, with a focus on choosing investments that were high-yield and low-risk. In truth, said the Commission, Chahal “traded risky options and margins,” as well as sold and purchased commodities and futures.

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The criminal trial of former UBS Group AG (UBS) trader Andre Flotron is underway. Flotron is accused of engaging in spoofing in the gold market, including making orders for precious metals futures contracts not to actually execute them but to manipulate futures contracts prices. Flotron also is accused of training a more junior UBS trader on how to spoof orders. During opening arguments, US prosecutor Avi Perry explained to jurors that while Flotron may be accused of “spoofing,” this is still “fraud.” As in, it is no joke. The 2010 Dodd-Frank Act declared spoofing illegal in 2010.

Flotron is accused of colluding with others on the UBS precious metals desk to make fake orders so that others in the market, including high-speed trading algorithms, would change their prices. They allegedly made big orders for precious metals futures with no plans to see the trades through. Instead, they sought to profit from the price changes that resulted through the placement of smaller trades on the other side of the market. Meantime, Flotron and his alleged co-conspirators are accused of making it seem as if there was a certain supply or demand at play, which caused other market participants to respond accordingly. Flotron is accused of spoofing a number of times between 2008 and 2013.

In a parallel Commodity Future Trading Commission case announced earlier this year, Flotron was charged with spoofing and taking part in a “manipulative and deceptive scheme.”

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Last month, the Federal Energy Regulatory Commission announced plans to stop oil and gas pipelines from being able to structure themselves as Master Limited Partnerships (MLPs) in order to get an income tax allowance for rates that are cost-of-service. Under the existing model, MLP customers pay a price that is regulated, part of which takes care of corporate tax charges.

MLPs aren’t required to pay corporate taxes since they pass through entities that distribute pre-tax earnings to unit holders. The latter are the ones that pay the taxes.

Any new rule related to this matter would likely not go into effect until 2020. Still, the government agency’s news affected trading on a number of MLPs, including the Alerian MLP ETF (exchange traded fund), Energy Transfer Partners, TC PipeLines, Williams Partners, Crossamerica Partners, and several others.

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According to the New York Times, even though Morgan Stanley (MS) executives have known for years about the domestic violence allegations against Douglas E. Greenberg, who was one of their leading brokers, the firm continued to allow him to stay employed in its wealth management division. However, after the NY Times tried to contact the firm about him, Greenberg was finally suspended, pending review. Now, the media is reporting that Greenberg has been fired. Still, a number of the former-Morgan Stanley broker’s exes have retained their own lawyers in light of the fact that he wasn’t let go until now.

Four women have come forward accusing him of domestic abuse. Court filings indicate that not only did Greenberg’s accusers go to the police seeking protection against the now former Morgan Stanley financial adviser, but also, according to one of the women’s attorneys, the firm was issued a federal subpoena notifying it about at least one of the allegations. Morgan Stanley was also aware that Greenberg was charged for allegedly violating a restraining order.

Still, no action was taken against Greenberg, who belonged Morgan Stanley’s exclusive Chairman’s Club as one of the firm’s highest earning brokers. Ironically, the members of this club are expected to maintain certain standards when it comes to “conduct and compliance.” Greenberg is considered one of the leading wealth managers in Oregon. Firmwide, he was among Morgan Stanley’s top 2% of brokers when it came to bringing in revenue.

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The US Securities and Exchange Commission has filed charges against Two Texas companies and their principals accusing them of senior financial fraud and running a $2.4M Ponzi scam. The regulator brought its complaint in the US District Court for the Southern District of Houston Division.

The SEC contends that from ’10 to ’17, Clifton E. Stanley and his The Lifepay Group, LLC allegedly persuaded at least 30 older people to invest about $2.4M in retirement savings—approximately $1.3M of which he is accused of spending on his own country club memberships, travel, general living expenses, and entertainment bills. Stanley and Lifepay purportedly did this by making empty promises and touting significant investment returns of up to 36% annually. Many of Stanley’s alleged targets were investors in their 80’s and 90’s who lived in Texas and Louisiana.

In Ponzi scam fashion, investors received $1.1M of “returns” on their investments, which were actually funds that came from later investors and not returns at all. Meantime, investments were touted as “safe” and were supposedly to go toward real estate projects that would make money.

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If you are an investor that suffered financial losses from investing in either the Triloma EIG Energy Income Fund – Term 1 or the Triloma EIG Energy Income Fund, you may have grounds for a securities fraud claim to try to recoup your money. At Shepherd Smith Edwards and Kantas, LTD LLP we have been speaking with Triloma Fund investors to help them explore their legal options. Contact our investor fraud law firm today to request your free case consultation.

According to their website, the Triloma Funds are unlisted investment companies that have mostly an international portfolio of “privately originated energy company and project debt.” Investors included individual investors and institutional investors.

However, late last month, the Triloma Funds’ Board of Trustees approved a liquidation plan for each of the funds, so as to facilitate their dissolution. The Funds will refrain from any business activities besides those having to do with shutting down operations. Meantime, monthly distributions and reinvestment plans for both funds have ended. An initial cash distribution related to liquidation is scheduled, as is a second one.

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Santander Securities LLC has notified its Puerto Rico clients by letter that its San Juan branch will shutter its doors to the public on May 25. Santander Securities (SAN) is Banco Santander’s investment division. The move is part of the investment wing’s plan to move to a service-only model rather than its model that involves offering investment advice and soliciting sales. A scaled down staff will stay on at the branch after it closes.

Santander Securities in Puerto Rico has come under close scrutiny over the last five years. It is one of the investment firms that came under fire beginning in 2013 when Puerto Rico bonds and bond funds saw a steep drop in value and tens of thousands of investors sustained huge investment losses. Many of these investors should never have even purchased such volatile securities, which were always too risky for their portfolios and not in line with their investment goals. Yet Santander Securities brokers, as well as brokers from UBS Puerto Rico (UBS-PR), Banco Popular, and other investment firms, pushed them on clients, often in very high concentrations.

According to Bloomberg, between late 2012 and 2013, Santander Securities marketed and sold more than $280 million in Puerto Rico closed-end funds and municipal bonds, even as it shed its own holdings of these same securities. In 2015, the investment bank resolved allegations brought by the Financial Industry Regulatory Authority (FINRA) accusing the firm of deficiencies involving its structured product business, including its handling of reverse-convertible securities sales to retail customers in Puerto Rico.

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The US Securities and Exchange Commission has announced another whistleblower award, this one for over $2.2M. The whistleblower, an ex-insider of a company, had initially reported the information resulting in a successful SEC enforcement action to another federal agency before going to the SEC.

Under the Exchange Act Rule 21F-4(b)(7), the SEC will treat information that a whistleblower has given to another agency first as if it were submitted to the regulator at the same time, as long as the information is provided to the Commission within 120 days. When initially, the whistleblower voluntarily gave the information to the other federal agency, the latter “referred the matter” to the SEC, which conducted a probe. The whistleblower then gave the SEC the same information that was shared with the other agency.

SEC Office Whistleblower Chief Jane Norberg noted how this latest award is a prime example of how when even if a whistleblower provides the information to another agency first, he/she may still be eligible for an SEC whistleblower award as long as that same information is shared with the Commission within the safe harbor period and satisfies the other requirements for qualifying for the award. To date, the regulator has awarded 54 whistleblowers over $264M.

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In a Commodity Futures Trading Commission case, a judge has ordered former church Pastor Wesley Allen Brown, Edwards Rubin, and their Maverick International Inc. to pay approximately $8.6M combined in civil penalties and restitution. The defendants are accused of commodity pool fraud, commodity futures fraud, and federal commodity law violations.

A summary judgment order was also issued against Brown, who is serving time in prison for securities fraud and other offenses. Rubin is his brother-in-law and the president of Maverick.

According to the CFTC’s Complaint, issued in 2015, the defendants took part in a scam to solicit money for a supposed commodity pool trading futures contracts and precious metals. Brown is accused of abusing his position as pastor to influence church members to invest. Many of his targets were older investors/churchgoers. The regulator claims that the defendants misappropriated over $2M by soliciting the public for commodity futures contract trading.

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The US Securities and Exchange Commission has filed senior investor fraud-related charges against Houston pastor Kirbyjon Caldwell of the Windsor Village United Methodist Church and financial planner Gregory Alan Smith. The regulator is accusing them of defrauding older investors of over $1M through the sale of pre-Revolutionary Chinese bond interests.

Smith runs the Smith Financial Group. The SEC permanently barred him from associating with brokerage-firms in 2010 after he was accused of misappropriating investor money. Caldwell is senior pastor at reportedly one of the biggest Protestant churches in the US.

According to the regulator, in 2013 and 2014, the two men solicited older investors in an attempt to sell them bonds that they claimed were valued at billions of dollars when, in truth, the bonds were “collectible memorabilia” that lacked any “meaningful investment value.”

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