Commission Settles with Former Head of Sales for the New York Affiliate of Unregistered Foreign Broker Dealer OOO CentreInvest Securities
On August 6, the Securities and Exchange Commission today filed a settled civil action in the U.S. District Court for the Southern District of New York against Vladimir Chekholko (Chekholko), the former head of sales of a registered broker-dealer, CentreInvest, Inc. (CI-New York), which was affiliated with an unregistered Russian broker-dealer, OOO CentreInvest Securities (CI-Moscow). The complaint alleges that from at least 2004 through November 2007, CI-Moscow - aided and abetted by Chekholko and others at CI-New York- solicited institutional investors in the United States to purchase and sell thinly-traded stocks of Russian companies, without registering as a broker-dealer as required by Section 15(a) of the Exchange Act, 15 U.S.C. S 78o(a), or meeting the requirements for the exemption from registration for foreign broker-dealers under Exchange Act Rule 15a-6(a), 17 CFR S 240.15a-6. As alleged in the complaint, investors who expressed interest in transactions solicited by Chekholko were referred to CI-Moscow to complete their transactions. In doing so, Chekholko knew that he was referring investors to representatives of CI-Moscow who were neither licensed and registered with the Commission or an appropriate U.S. self-regulatory organization, nor exempt from such licensing and registration requirements.
The complaint seeks as relief a final judgment directing Chekholko to disgorge his ill-gotten gains, to pay prejudgment interest, and to pay a civil monetary penalty pursuant to Section 21(d)(3) of the Exchange Act, 15 U.S.C. S 78u(d)(3). Chekholko has consented, without admitting or denying the allegations in the complaint, to the entry of a final judgment directing him to pay disgorgement of $86,421, prejudgment interest of $14,439, and a civil penalty of $20,000.
In a separate administrative proceeding, the Commission issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 15(b) and 21C of the Securities Exchange Act of 1934 as to Vladimir Chekholko (Order). The Order finds that Chekholko willfully aided and abetted and caused CI-Moscow's violation of Section 15(a) of the Exchange Act. The Order directs Chekholko to cease and desist from committing or causing violations and any future violations of Section 15(a) of the Exchange Act. Further, the Order suspends Chekholko from association with any broker or dealer for a period of six (6) months. Chekholko consented to the issuance of the Order without admitting or denying the Commission's findings, except as to the Commission's jurisdiction over him and the subject matter of the proceedings. (In the Matter of Vladimir Chekholko; Rel. 34-60450 (August 5, 2009); Admin. Proc. File No. 3-13304). [SEC v. Vladimir Chekholko, 09-CV 6937 (RJS) (SDNY)] (LR-21172)
SEC Halts Texas Financial Advisor's Fraudulent Scheme
On August 6, the United States District Court for the Northern District of Texas granted a temporary restraining order, asset freeze and other emergency relief against 2Randall Consulting Group, LLC (2Randall), and its principal, Brion Gary Randall based on a Commission complaint alleging that the defendants operated an advisory program in which clients' funds purportedly were placed through a master account in an AllianceBernstein LP mutual fund and offered the opportunity to pool funds through 2Randall for investment in a small business loan participation program. At least six investors transferred approximately $3 million to Randall and 2Randall with the understanding that Randall would invest the money for them. The complaint alleges that neither defendant has an account with AllianceBernstein, and that the defendants misappropriated the funds entrusted to them. According to the complaint, Randall distributed bogus account statements to clients showing that their investments were earning returns, and distributed fake screen shots of "online banking" activity in an the alleged AllianceBernstein master account. The Commission's complaint charges that the defendants violated Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.
[SEC v. 2Randall Consulting Group, LLC and Brion Gary Randall, Defendants, Civil Action No. 3:09-CV-1465-O, United States District Court for the Northern District of Texas (Dallas Division)] (LR-21173)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by New York Stock Exchange (SR-NYSE-2009-77) to modify certain equity transaction fees and rebates has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 10. (Rel. 34-60436)
A proposed rule change filed by New York Stock Exchange (SR-NYSE-2009-78) extending a temporary equity transaction fee for shares executed on the NYSE MatchPointSM system through Oct. 31, 2009, has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 10. (Rel. 34-60439)
A proposed rule change filed by the International Securities Exchange (SR-ISE-2009-57) relating to amending the Direct Edge ECN Fee Schedule has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 10. (Rel. 34-60442)
Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-ISE-2009-58) submitted by the International Securities Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to the amounts that Direct Edge ECN, in its capacity as an introducing broker for non-ISE Members, passes through to such non-ISE Members. Publication is expected in the Federal Register during the week of August 10. (Rel. 34-60443)
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