Texas Investment Adviser Suspend for Violating Earlier Securities Agreement
The Texas State Securities Board has suspended investment adviser John Michael McDonough for 90 days after he violated a past agreement that limited his business activities and required 212 Advisory Group to enhance its supervision of him. The undertaking agreement was a requirement for him to be approved as a registered investment adviser in Texas in 2015 while he worked with the Georgia-based firm.
At the time, the Financial Industry Regulatory Authority had already sanctioned McDonough, who used to be registered with AXA Advisors, LLC, over allegations that he engaged in “outside business activities” and a number of undisclosed private securities transactions. He was fined $10K and suspended by the self-regulatory organization.
Earlier this year, the Texas State Securities Board found that McDonough was in total violation of the undertaking agreement. Meantime, 212 Advisory was found to have failed in making sure that McDonough did not engage in any supervisory-like acts nor did it ensure that a firm principal was appointed as his direct supervisor.
Texas Lawyer Accused of Securities Fraud Must Now Pay Over $352K
The US Securities and Exchange Commission has obtained a final judgment by default in its case against Jay Mac Rust. Rust, a lawyer, saw his license suspended by the State Bar of Texas for three years because of his alleged in involvement in a securities scam.
According to the SEC, Rust and Christopher K. Brenner made undisclosed high-risk investments and even stole funds from escrow accounts of small business owners looking for commercial loans. Now, Rust must pay disgorgement and prejudgment interest of over $191K, as well as a civil monetary penalty of nearly $161K.
As for Brenner, he settled with the regulator earlier this year but without denying or admitting to the findings. He consented to suspension from practicing or appearing in front of the Commission as an attorney. Now, the SEC is pursuing disgorgement plus a civil monetary penalty against him.
Houston Man Involved in $6.4M Diamond Investment Scam Must Pay Almost $3.8M in Restitution
In Texas, Christopher Arnold Jiongo is ordered to serve 46 months in federal prison and pay more than $3.78M in restitution because of his involvement in a multi-million-dollar diamond investment scam. He pleaded guilty to wire fraud in May. Meantime, Jiongo’s co-conspirators in the scam, Jay Bruce Heimburger and Craig Allenson Otteson, recently received their federal prison terms of 97 months and 121 months, respectively, for their roles in the diamond investor scheme.
The indictment against Jiongo accused him of drafting the $50K diamond notes that he and the other two men used as investment vehicles to make money. When the three men discovered in 2011 that their original plan for the investments would not succeed, they failed to disclose what was happening to all involved, including to investors. Instead, they continued to misrepresent that investors’ money would be used to purchase and resell diamond and that all funds were fully secured. As a result, claim prosecutors, more than $6.4M was fraudulently raised from 77 investors.
SEC Obtains Judgment Against Attorney Who Defrauded Escrow Clients in Securities Fraud Scheme, SEC, November 21, 2017
Houston Man Sentenced in $6.4 Million Diamond Investment Fraud Scheme, Justice.gov, November 21, 2017
More Blog Posts:
Texas Securities Fraud: Houston Investment Advisor Gets Five Years for Defrauding Investors and Prison Sentences are Rendered in $6.4M Diamond Investor Fraud Case, Stockbroker Fraud Blog, November 10, 2017
FINRA Bars NY Broker For Excessive Trading in Blind Senior Investor’s Accounts, Stockbroker Fraud Blog, November 9, 2017
UBS to Pay $3.5M Penalty To Settle Allegations that It Disadvantaged Retirement and Charity Accounts During Mutual Fund Transactions, Institutional Investor Securities Blog, November 6, 2017