Articles Tagged with Investor Fraud


$34M Illegal Stock Scam Leads to New Charges

The US Securities and Exchange Commission has filed charges in an alleged nearly $34M illegal stock sale involving Biozoom Inc. stock that caused serious financial losses for retail investors. Biozoom was previously called Entertainment Art Inc..

It was in 2013 that the regulator was able to get a court order freezing proceeds made from the allegedly illegal stock sales. The SEC contends that from March to June 2013, ten people received over 20 million Entertainment Art shares. A number of these individuals then sold over 14 million of these shares in a month-long period. This resulted in around $34M in sales.

 

SEC Accused Investment Adviser of Profiting from Cherry Picking

The US Securities and Exchange Commission has filed a civil fraud case against Strong Investment Management, which is a California-based investment adviser, and its president/owner Joseph B. Bronson. The regulator is accusing them of running a cherry picking scam that defrauded the firm’s clients.

The Commission contends that Bronson used Strong’s omnibus account to trade securities but would wait to see how they performed during the day before distributing them to certain client accounts. Meantime, Bronson purportedly made healthy profits at cost to clients by cherry picking the trades. He is accused of giving himself trades that were profitable while sending unprofitable ones to firm clients.

The SEC’s complaint contends that in Forms ADV, Bronson and Strong misrepresented trading and allocation practices by falsely stating that every trade would be allocated according to the terms of pre-trade allocation statements with no preference granted to any account. Bronson’s brother, ex-Strong chief compliance officer John B. Engebreston, is accused of not fulfilling his job by failing to make sure that Strong’s policies and procedures for trade allocation were followed. He also is accused of “repeatedly” ignoring “red flags” when it came to Strong’s allocation practices.

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