The Securities and Exchange Commission announced today that on June 28, 2011, The Honorable Jed S. Rakoff of the United States District Court for the Southern District of New York entered a judgment against David Plate in SEC v. Galleon Management, LP, et al., 09-CV-8811, an insider trading case the SEC filed on October 16, 2009. The SEC charged Plate, who was a registered representative and a proprietary trader at the broker-dealer Schottenfeld Group, LLC, during the relevant time period, with using inside information to trade ahead of an impending acquisition announcement.
In its action, the SEC alleged that, in March 2007, Plate was tipped inside information that Kronos Inc. would be acquired in about a week for a substantial premium. On the basis of the material non-public information he received, Plate traded in a Schottenfeld account he managed.
To settle the SEC's charges, Plate consented to the entry of a judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $43,876.37, plus prejudgment interest of $9,415.54. The judgment further provides that the Court later will determine issues relating to a civil penalty. Plate previously pled guilty to charges of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. David Plate, 10-CR-0056 (S.D.N.Y.).
Thursday, June 30, 2011
Wednesday, June 29, 2011
Raymond James Settles ARS Case and Agrees to $300 million Buyback
As part of a settlement with eight states and the Securities and Exchange Commission, Raymond James Financial Inc. will buy back $300 million in auction-rate securities from clients and pay a fine of $1.7 million.
The states in charge of the settlement are Florida and Texas. Other states involved were Indiana, Missouri, New York, North Carolina, Pennsylvania and South Carolina.
Raymond James has 30 days to extend an offer to repurchase the securities, and the offer must be open for 75 days after that initial bid.
The states in charge of the settlement are Florida and Texas. Other states involved were Indiana, Missouri, New York, North Carolina, Pennsylvania and South Carolina.
Raymond James has 30 days to extend an offer to repurchase the securities, and the offer must be open for 75 days after that initial bid.
Monday, June 6, 2011
FINRA Files Complaint Against David Lerner Associates, Inc.
David Lerner Associates Inc. has been accused of targeting unsophisticated seniors while selling real estate investment trust shares without considering whether the illiquid securities were suitable for its clients.
The brokerage firm misled investors who bought more than $300 million of shares in the $2 billion Apple REIT Ten offering this year, the Financial Industry Regulatory Authority Inc. said last week in a disciplinary complaint posted on its website. The firm denies the allegations, according to a statement.
In soliciting customers for Apple REIT Ten, the firm provided misleading information about distribution rates for a series of predecessor securities that now are closed to investors, Finra said.
The firm has sold almost $6.8 billion of Apple REIT shares to more than 122,000 customers since 1992, according to Finra. Those sales have generated more than $600 million, accounting for more than 60% of the firm's business since 1996, Finra said.
The complaint is the first step in a formal proceeding, Finra said. It isn't filed in court, and the firm can request a hearing before a disciplinary panel, the regulator said in its statement.
The brokerage firm misled investors who bought more than $300 million of shares in the $2 billion Apple REIT Ten offering this year, the Financial Industry Regulatory Authority Inc. said last week in a disciplinary complaint posted on its website. The firm denies the allegations, according to a statement.
In soliciting customers for Apple REIT Ten, the firm provided misleading information about distribution rates for a series of predecessor securities that now are closed to investors, Finra said.
The firm has sold almost $6.8 billion of Apple REIT shares to more than 122,000 customers since 1992, according to Finra. Those sales have generated more than $600 million, accounting for more than 60% of the firm's business since 1996, Finra said.
The complaint is the first step in a formal proceeding, Finra said. It isn't filed in court, and the firm can request a hearing before a disciplinary panel, the regulator said in its statement.
Omni Brokerage, Inc. Closes
Another small, independent broker-dealer that faces mounting legal claims is exiting the business, this time after selling real estate deals by a bankrupt syndicator.
Omni Brokerage Inc. of South Jordan, Utah, said at the end of April that it would withdraw its registration with the Financial Industry Regulatory Authority Inc., according to its profile on BrokerCheck.
Omni reported a loss of $356,000 last year on revenue of $3 million.
In its annual Focus report filed in March with the Securities and Exchange Commission, the firm said that it had been named in several arbitration claims before Finra. The firm said that investors were seeking $2.8 million in compensatory damages.
Omni, which specialized in real estate investments, had net capital of $142,000, according to the SEC filing.
Omni Brokerage Inc. of South Jordan, Utah, said at the end of April that it would withdraw its registration with the Financial Industry Regulatory Authority Inc., according to its profile on BrokerCheck.
Omni reported a loss of $356,000 last year on revenue of $3 million.
In its annual Focus report filed in March with the Securities and Exchange Commission, the firm said that it had been named in several arbitration claims before Finra. The firm said that investors were seeking $2.8 million in compensatory damages.
Omni, which specialized in real estate investments, had net capital of $142,000, according to the SEC filing.
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