As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, John Stuart Kuhn Sr. of Callao, Missouri has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 30 days. The fine must be paid either immediately upon Kuhn’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.

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On April 26, 2012 U.S. Commodity Futures Trading Commission (CFTC) announced that the commission obtained a federal court supplemental consent order requiring defendants Peter Son of Danville, Calif., and his companies, SNC Asset Management, Inc., and SNC Investments, Inc., to pay a $5 million civil monetary penalty. The court also ordered Son’s wife, relief defendant Ann Lee, to disgorge $300,000 of ill-gotten gains. The court’s supplemental consent order, entered on April 19, 2012, by Judge Maxine M. Chesney of the U.S. District Court for the Northern District of California, resolves a CFTC complaint that charged the defendants with operating an $85 million fraudulent foreign currency scam (see CFTC Press Release 5666-09, June 9, 2009). The CFTC complaint named Lee as a relief defendant because she received monthly funds as purported wages, although she performed no services for SNC.

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On April 26, 2012 U.S. Commodity Futures Trading Commission (CFTC) announced that the commission issued an order settling charges that PassThrough Investments, LLC (aka PassThrough Investments Group, LLC), and its principals, Stephen Brantley and Dwayne Bryant Dawson, all of Spring, Texas, fraudulently solicited and accepted at least $2.6 million from at least 60 members of the public to participate in an off-exchange foreign currency pool that traded on a leveraged or margined basis. The CFTC order requires PTI, Brantley, and Dawson to each pay a $140,000 civil monetary penalty and to pay, jointly and severally, restitution of $701,617. The order also imposes permanent trading and registration bans against the three respondents and requires them to cease and desist from further violations of the Commodity Exchange Act, as charged.

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On April 26, 2012 U.S. Commodity Futures Trading Commission (CFTC) announced that the comission filed and simultaneously settled charges that Ghassan Tawachi of Coral Gables, Fla., defrauded customers through sales of his software trading systems by falsely claiming expertise as a successful professional trader and by misappropriating $40,000 from one customer. Tawachi is a registered Commodity Trading Advisor. The CFTC order requires Tawachi to pay a $140,000 civil monetary penalty and restitution of $140,839.70. The order also imposes permanent trading and registration bans against Tawachi.

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On April 26, 2012 Hong Kong Securities & Futures Commission (SFC) published that the Eastern Magistrates Court today fined seven investors a total of $71,000, ranging from $2,000 to $30,000 each, after they had pleaded guilty to 11 charges of illegal short selling shares of Imagi International Holdings Limited (Imagi) in May 2010. Acting Principal Magistrate Mr. David Dufton also ordered the defendants – Kung Ping Cheung, Chan Ki, Siu Kam Fung, Siu Kam Mei, Siu Hung Keung, Ma Siu Fan and Yau Ka Yiu – to pay the Securities and Futures Commission’s (SFC) investigation costs of $21,820. The SFC told the court that, on 7 May 2010 and/or 11 May 2010, the defendants placed various orders to sell 31,000 to 16,855,600 shares of Imagi when they did not and could not have reasonable grounds to believe that they had a presently exercisable and unconditional right to sell the shares, thus constituting illegal short selling.

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As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, David Austin Kembel of Roanoke, Virginia has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $10,000, suspended from association with any FINRA member in any capacity for seven months, and ordered to pay $30,000, plus interest, in restitution to customers. The fine and restitution ordered must be paid either immediately upon Kembel’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.

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As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, Mikal Keahey Johnson of Richardson, Texas has submitted an Offer of Settlement in which he was suspended from association with any FINRA member in any capacity for 18 months. Without admitting or denying the allegations, Johnson consented to the described sanction and to the entry of findings that he exercised discretion in the securities accounts of his member firm customers without their written authorization to effect discretionary trades in their firm accounts, or his firm’s prior written acceptance of the accounts as discretionary.

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As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, Ronald Adam Hollinger of Greenwood, Indiana has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 10 business days. The fine must be paid either immediately upon Hollinger’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.

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As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, William Edward Herlihy of Deltona, Florida has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $50,000 and suspended from association with any FINRA member in any capacity for six months. The fine must be paid either immediately upon Herlihy’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.

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As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, Steven Vincent Hazard of Sequim, Washington was barred from association with any FINRA member in any capacity and ordered to pay $47,500, plus interest, in restitution to a customer. The sanctions were based on findings that Hazard borrowed $67,500 total from customers contrary to his member firm’s written policy, repaid $20,000 but has not repaid the remaining $47,500. The findings stated that Hazard borrowed $100,000 from another firm customer when he was the customer’s financial advisor.

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As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, Chad Eugene Hanson of Eagle, Idaho has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 30 days. Without admitting or denying the findings, Hanson consented to the described sanctions and to the entry of findings that he improperly distributed a study guide, answer key and exam to a state long-term care (LTC) insurance continuing education (CE) examination to registered representatives at his member firm and to others not associated with the firm.

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As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for April 2012, Janet Lynne Gentry of Bluff Dale, Texas has submitted a Letter of Acceptance, Waiver and Consent in which she was fined $5,000 and suspended from association with any FINRA member in any principal capacity for two months. Without admitting or denying the findings, Gentry consented to the described sanctions and to the entry of findings that, as her member firm’s AML compliance officer, CCO and designated principal responsible for firm supervisory controls, she failed to establish and implement policies and procedures reasonably designed to detect and cause the reporting of suspicious activity occurring at a branch of her member firm, and failed to conduct due diligence and obtain the required certification for a foreign correspondent account opened at the branch.

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On April 25, 2012 U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Richard W. Story of the U.S. District Court for the Northern District of Georgia, on April 19, 2012 entered an emergency order freezing the assets of defendants Robert A. Christy of Milton, Ga., and his company Crabapple Capital Group LLC of Alpharetta, Ga. The order also prohibits the defendants from destroying or altering books and records. The judge set a hearing date for May 1, 2012. The order stems from the filing of a federal court action on April 19, 2012, against the defendants, charging them with foreign currency fraud, misappropriation, and making false statements to the National Futures Association (NFA). Both Christy and Crabapple are registered with the CFTC and are NFA members.

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On April 25, 2012 Hong Kong Securities & Futures Commission (SFC) published that the court of First Instance today refused an application by Mr Chan Chun Wai, the director of Billion Global Asset Management Limited, for leave to appeal to the Court of Final Appeal. On 6 September 2011, Chan was convicted of two charges of holding out he was carrying on an asset management business and also issuing a related advertisement, both without a licence. Chan’s convictions were upheld by the Court of First Instance on 14 March 2012.

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On April 25, 2012 U.S. Securities and Exchange Commission (SEC) published that the commission issued an Order Instituting Proceedings on March 7, 2012, pursuant to Section 15(b) of the Securities Exchange Act of 1934. The OIP alleges that Aaron M. Glasser (Glasser) was enjoined from future violations of the registration and antifraud provisions of the Securities Act of 1933 and the Exchange Act in SEC v. Aubrey, 8:11-cv-01564-JVS-RNB (C.D. Cal. Feb. 3, 2012), and questions what remedial action is appropriate in the public interest pursuant to Section 15(b) if this allegation is true. The OIP requires that Glasser file an Answer within twenty days of service of the OIP. OIP at 3; 17 C.F.R. § 201.220(b).

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