Securities: USA's SEC goes hyperactive

- John Clement and Edgefund Capital: the SEC has obtained an emergency injunction and asset freezing order to halt "a fraudulent scheme being conducted by John Clement of Encinitas, Calif., and his company Edgefund Capital LLC.

- Francisco Illarramendi, Highview Point Partners, LLC and Michael Kenwood Capital Management, LLC, as Defendants, and Highview Point Master Fund, Ltd., Highview Point Offshore, Ltd., Highview Point LP, Michael Kenwood Asset Management, LLC, Michael Kenwood Energy and Infrastructure LLC, and MKEI Solar, LP, as Relief Defendants. On 10 May, 2011, the Securities and Exchange Commission issued civil proceedings against Highview Point Partners, LLC, a Connecticut-based investment adviser, alleging that they engaged in a multi-year Ponzi scheme involving hundreds of millions of dollars. Highview was added as a defendant to a case the SEC previously filed in January 2011, and three hedge funds managed by Highview were named as relief defendants because, according to the SEC’s complaint, they are in possession of funds tainted by the Ponzi scheme. After a hearing, the Honourable Janet Bond Arterton, U.S. District Judge for the District of Connecticut, entered a consented-to order on 13 May, 2011 temporarily freezing the assets of Highview and the three hedge funds it advises.

But it is in new proceedings that the SEC has become spectacularly active.

- Heath M Biddlecome, 41, Carpenteria, California : founder and president of California Wealth Management Group trading as IFC Advisory, a registered investment adviser. Allegations, inter alia, diverted investors' funds into unauthorised high risk investments. Penalty: Banned from industry for minimum three years

- Robert C Butler, Bermuda Dunes, California. "The Securities and Exchange Commission obtained an emergency asset freeze and court order to halt an ongoing securities fraud being orchestrated by Robert C. Butler."

- Jupiter Group Capital Advisors, LLC, and Rick Cho. "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. " (dated 10 May, released 16 May)

- Thor Industries, Inc., and Mark C. Schwartzhoff. Alleged to have breached "cease and desist order." Settled on payment of a civil penalty.

- Lloyd V. Barriger (that's a name, not "versus") On 13 May, 2011, the Securities and Exchange Commission filed a civil injunctive action charging Monticello, New York investment adviser Lloyd V. Barriger with fraud in connection with two upstate New York real estate funds he managed – the Gaffken & Barriger Fund, LLC (the G&B Fund or the Fund), and Campus Capital Corp. (Campus). According to the complaint, the G&B Fund raised approximately $20 million from January 1998 until March 2008, and Campus raised approximately $12 million from October 2001 until July 2008. The Commission charged Barriger with defrauding the funds and their investors and prospective investors to whom he offered and sold interests in these funds.

- Advanced Optics Electronics, Inc., Leslie S. Robins, JDC Swan, Inc. and Jason Claffey . In an action brought in federal district court, the Securities and Exchange Commission on 25 February, 2011, alleged that Advanced Optics Electronics, Inc. (ADOT), its former Chairman Leslie S. Robins, JDC Swan, Inc. and its former President, Jason Claffey engaged in an unlawful public offering of the securities of ADOT, a development stage Nevada corporation located in New Mexico. The Commission also instituted related cease-and-desist and administrative proceedings against registered broker-dealer Divine Capital Markets, LLC (Divine Capital), its CEO and President Danielle Hughes, and Divine Capital employee, Michael Buonomo.

- North American Clearing, Inc., Richard L Goble, Bruce Blatman, Timothy Ward. Fraud, breaches of the customer protection rule, filing requirements. Goble is a former member of the board of FINRA. Injunctions and civil penalties on a "without admitting or denying the allegations" basis.

- Allen E. Weintraub and AWMS Acquisitions, Inc., d/b/a Sterling Global Holdings (4 May, released 13 May) The Securities and Exchange Commission announced today that it filed a Complaint alleging fraud and violations of a tender offer rule against AWMS Acquisition, Inc., d/b/a Sterling Global Holdings (Sterling Global), a shell company, and Allen E. Weintraub, Sterling Global’s sole owner, officer, director, and employee. Facts: stunned markets with audacious bids to buy Eastman Kodak and American Airlines' holding company, boasted of great personal experience. "however, completion of either deal was impossible —Weintraub knew that neither he nor Sterling Global had any assets and that there were no agreements in place to finance the purported acquisitions."

- Charles C. Slowey, Jr., et al. (22 April, released 16 May) "The Securities and Exchange Commission announced that on 20 April, 2011, the Honourable Leonard D. Wexler of the United States District Court for the Eastern District of New York entered a final judgment on consent against Defendant Gregory L. Oldham, a former registered representative of Advanced Planning Securities, Inc., a former registered broker-dealer. The judgment (i) permanently enjoins Oldham from violating Section 5 of the Securities Act of 1933 and (ii) finds Oldham liable for disgorgement and prejudgment interest of $673,989, but waives payment of that amount and imposes no civil penalty based on Oldham’s sworn statement of financial condition and other documents. Oldham consented to the entry of the judgment without admitting or denying any of the allegations of the Commission’s complaint."

- ICP Asset Management, LLC, ICP Securities, LLC, Institutional Credit Partners, LLC, and Thomas C. Priore (5 May, released 16 May) "The Securities and Exchange Commission today announced that it is seeking leave to file additional claims in its case against investment advisory firm ICP Asset Management, LLC (ICP) and its founder, owner and president, Thomas C. Priore. The additional claims seek to rescind Priore’s transfer of assets to ensure that they would be within the reach of the Court in the event the Commission is successful in a pending case in Priore, ICP, and related entities."

- Jay L. LeBoeuf and New Castle Energy. The SEC describes LeBeoef as "a recidivist." "On 11 May, 2011The Securities and Exchange Commission alleged that Jay L. LeBoeuf and New Castle Energy, LLC conducted six fraudulent oil and gas-related offerings . Subject to the Court’s approval, LeBoeuf and New Castle consented to permanent injunctions against future violations and to administrative bars from participating in the securities industry. In a related criminal case, (U.S. v. Jay L. LeBoeuf d/b/a New Castle Energy, LLC, 11 CR 37 (D. WY.), LeBoeuf entered a plea of guilty to one count of wire fraud."

- Michael Baker Corporation, John Scullin and Dennis Higgins "The Securities and Exchange Commission today charged Michael Baker Corporation, a company headquartered in Moon Township, Pennsylvania, and John Scullin, a former Manager of Project Accounting in the company’s former energy business segment, with falsifying the company’s accounting records which inflated the revenue and income reported to shareholders. The Commission’s complaint alleges that the company’s material financial misstatements were primarily caused by the fraudulent conduct of Scullin who prepared and caused false manual journal entries to be entered into the company’s general ledger. Scullin’s misconduct occurred against a backdrop of Michael Baker’s failure to maintain adequate internal controls over its former energy business segment’s books, records and accounts. "

- George Garcy et al. "The Securities and Exchange Commission today charged the co-founders of a New York-based beverage and food carrier company with orchestrating an $8 million securities fraud and spending at least half of investor money for their personal use.

The SEC alleges that Angelo Cuomo of Staten Island and George Garcy of Aventura, Fla., fraudulently obtained investments in E-Z Media Inc. while falsely telling investors that their company owned several patents for beverage and food carriers and had contracts to sell its carriers to such major companies as Heineken, Anheuser Busch, and Aramark Corporation. They also misrepresented their plans to conduct an initial public offering (IPO), their use of offering proceeds, and the projected share price. E-Z Media never actually had any contracts or other agreements to sell its carriers to any major company, including the brand-name companies that Cuomo and Garcy touted to investors. E-Z Media never took even the basic steps to prepare for a purported IPO."

- Robert D. Orr, Leland G. Orr, Michael S. Lowry, Michael S. Hess, Kyle L. Garst, and Travis W. Vrbas (4 May, released 16 May) "The Securities and Exchange Commission today charged six former senior executives of Kansas-based Brooke Corporation and its other, publicly-traded subsidiaries, Brooke Capital Corporation, an insurance agency franchisor, and Aleritas Capital Corporation, a lender to insurance agency franchises and other businesses, with conducting an extensive financial and disclosure fraud. The Complaint alleges that in SEC filings and other public statements for year-end 2007 and the first and second quarters of 2008, senior executives at the Brooke companies misrepresented, among other things, the number of Brooke Capital franchisees and their financial health, the deterioration of Aleritas’ corresponding loan portfolio, and the increasingly dire liquidity and financial condition of the Brooke companies."

- AIC, Inc., et al. (18 April, released 16 May) "The Securities and Exchange Commission announced today that it filed a civil action in the United States District Court for the Eastern District of Tennessee against AIC, Inc., a financial services holding company for three broker-dealers and an investment adviser based in Richmond, Virginia, and its President and CEO, Nicholas D. Skaltsounis. The Complaint alleges that Skaltsounis devised and orchestrated an offering fraud and Ponzi scheme by offering and selling more than $7.7 million in AIC promissory notes and stock. Also named in the Complaint are AIC’s subsidiary, Community Bankers Securities, LLC (“CB Securities”), a broker-dealer, along with associated stockbrokers John B. Guyette, of Greeley, Colorado, and John R. Graves, of Pensacola, Florida, who was also an investment adviser."

More listings tomorrow.