FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
China Natural Gas and Executive Settle Fraud Charges
The Securities and Exchange Commission today announced that on June 5, 2013, the U.S. District Court for the Southern District of New York entered settled final judgments as to defendants China-based China Natural Gas Inc. and its chairman and former CEO Qinan Ji. The defendants have agreed to pay penalties to settle fraud charges the SEC brought against them last year for secretly loaning company funds to benefit Ji's son and nephew while failing to disclose the true nature of the loans.
As alleged in the SEC's complaint filed on May 14, 2012, China Natural Gas failed to disclose in 2010 the related-party nature of two loans totaling $14.3 million, which were made to benefit a real estate company that was 90 percent owned by Ji's son and 10 percent owned by Ji's nephew. Ji approved both loans without obtaining prior authorization from the board or informing the CFO, and he repeatedly lied to the board, the auditors, investors, and the company's internal investigators to conceal the related-party nature of the loans. The SEC also alleged that in the fourth quarter of 2008, China Natural Gas paid $19.6 million to acquire a natural gas company, but did not timely and properly report the transaction in its SEC filings.
To settle the SEC's charges, China Natural Gas agreed to pay a penalty of $815,000, and Ji agreed to pay a penalty of $100,000. Ji also agreed to reimburse China Natural Gas his trading profit of $77,479. China Natural Gas consented to the entry of a final judgment enjoining it from violating Section 17(a)(2) of the Securities Act of 1933, Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) and 14(a) of the Securities Exchange Act of 1934 and Exchange Act Rules 12b-20, 13a-1, 13a-11, 13a-13 and 14a-9. Ji consented to the entry of a final judgment enjoining him from violating Section 17(a) of the Securities Act, Sections 10(b), 13(b)(5) and 14(a) of the Exchange Act and Exchange Act Rules 10b-5, 13a-14, 13b2-1, 13b2-2 and 14a-9, and Section 304 of the Sarbanes-Oxley Act of 2002, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, 13a-11 and 13a-13, barring him from serving as an officer or director of a public company for 10 years.
Saturday, June 15, 2013
Friday, June 14, 2013
SEC CHARGES COMPANY WITH ILLEGALLY SELLING BINARY OPTIONS
FROM: SECURITIES AND EXCHANGE COMMISSION
SEC Charges Cyprus-Based Company with Illegally Selling Binary Options in the U.S.
The Securities and Exchange Commission filed a civil injunctive action on June 5, 2013, in the United States District Court for the District of Nevada charging a Cyprus-based company with selling binary options illegally to U.S. investors.
Binary options are securities in the form of options contracts whose payout depends on whether the underlying asset - for instance a company's stock - increases or decreases in value. In such an all-or nothing payout structure, investors betting on a stock price increase face two possible outcomes when the contract expires: they either receive a pre-determined amount of money if the value of the asset increased over the fixed period, or no money at all if it decreased.
The SEC alleges that Banc de Binary Ltd. has been offering and selling binary options to investors across the U.S. without first registering the securities as required under the federal securities laws. The company has broadly solicited U.S customers by advertising through YouTube videos, spam e-mails, and other Internet-based advertising; and Banc de Binary representatives have communicated with investors directly by phone, e-mail, and instant messenger chats. Banc de Binary also has been acting as a broker when offering and selling these securities, but failed to register with the SEC as a broker as required under U.S. law.
According to the SEC's complaint against Banc de Binary, the company began offering and selling binary options to U.S. investors in 2010. Banc de Binary induced investors to create accounts with the company, deposit money into those accounts, and then purchase binary options whose underlying assets include stock and stock indices. The SEC's complaint alleges that Banc de Binary's solicitation of U.S. investors has been quite successful and attracted some customers with very modest means. For example, one investor had a monthly income of $300 and a net worth of less than $25,000, and another customer was encouraged to deposit additional funds into his Banc de Binary trading account even after he informed the Banc de Binary representative that he was unemployed with less than $1,000 in his checking account.
The SEC's complaint seeks disgorgement plus prejudgment interest, financial penalties, and preliminary and permanent injunctions against Banc de Binary among other relief. The CFTC today announced a parallel action against Banc de Binary. The SEC's investigation was conducted by Leslie A. Hakala and C. Dabney O'Riordan of the Los Angeles Regional Office. The SEC's litigation will be led by John W. Berry and Ms. Hakala. The SEC acknowledges the assistance of the CFTC in this matter.
SEC Charges Cyprus-Based Company with Illegally Selling Binary Options in the U.S.
The Securities and Exchange Commission filed a civil injunctive action on June 5, 2013, in the United States District Court for the District of Nevada charging a Cyprus-based company with selling binary options illegally to U.S. investors.
Binary options are securities in the form of options contracts whose payout depends on whether the underlying asset - for instance a company's stock - increases or decreases in value. In such an all-or nothing payout structure, investors betting on a stock price increase face two possible outcomes when the contract expires: they either receive a pre-determined amount of money if the value of the asset increased over the fixed period, or no money at all if it decreased.
The SEC alleges that Banc de Binary Ltd. has been offering and selling binary options to investors across the U.S. without first registering the securities as required under the federal securities laws. The company has broadly solicited U.S customers by advertising through YouTube videos, spam e-mails, and other Internet-based advertising; and Banc de Binary representatives have communicated with investors directly by phone, e-mail, and instant messenger chats. Banc de Binary also has been acting as a broker when offering and selling these securities, but failed to register with the SEC as a broker as required under U.S. law.
According to the SEC's complaint against Banc de Binary, the company began offering and selling binary options to U.S. investors in 2010. Banc de Binary induced investors to create accounts with the company, deposit money into those accounts, and then purchase binary options whose underlying assets include stock and stock indices. The SEC's complaint alleges that Banc de Binary's solicitation of U.S. investors has been quite successful and attracted some customers with very modest means. For example, one investor had a monthly income of $300 and a net worth of less than $25,000, and another customer was encouraged to deposit additional funds into his Banc de Binary trading account even after he informed the Banc de Binary representative that he was unemployed with less than $1,000 in his checking account.
The SEC's complaint seeks disgorgement plus prejudgment interest, financial penalties, and preliminary and permanent injunctions against Banc de Binary among other relief. The CFTC today announced a parallel action against Banc de Binary. The SEC's investigation was conducted by Leslie A. Hakala and C. Dabney O'Riordan of the Los Angeles Regional Office. The SEC's litigation will be led by John W. Berry and Ms. Hakala. The SEC acknowledges the assistance of the CFTC in this matter.
Wednesday, June 12, 2013
EMPLOYEE WRONGFUL DISCHARGE CHARGES SETTLED BY PLASTIC SURGERY CENTER
FROM: U.S. DEPARTMENT OF LABOR
A plastic surgery center in Dallas has agreed to pay more than $300,000 to settle charges that it unlawfully fired two employees and then sued one of them in state court after she sought help from the NLRB's Fort Worth office.
The center, Advanced Facial Plastic Surgery Center, PA, also agreed to drop the state lawsuit, to rescind a rule prohibiting wage discussions by employees, and to cease paying its attorney to unlawfully and coercively represent its employees. The National Labor Relations Board issued an order on May 29, 2013 approving the terms of the formal settlement.
The case began in December 2010, when a medical technologist at the center was fired for discussing bonuses with other employees. Under the National Labor Relations Act, employees are guaranteed the right to discuss wages and other terms and conditions of employment with co-workers. The technologist filed a charge with the NLRB office in Fort Worth and, following an investigation, the Regional Director issued a complaint and scheduled a trial before an Administrative Law Judge.
The plastic surgery center then fired another employee, a surgical consultant, after she defended her co-workers in a meeting and engaged in other protected concerted activity. That employee filed a charge with the Fort Worth office, which issued a second complaint and consolidated the two cases.
Throughout the NLRB investigations, the center's attorney claimed to represent center employees, requiring all contact with the employees to go through his office. In her charge, the surgical consultant alleged she had been coerced into being represented by the company attorney.
After the surgical consultant filed NLRB charges, the company attorney filed a lawsuit in state court against her, alleging she had been negligent and breached certain fiduciary duties. The NLRB's investigation and analysis determined that the lawsuit was baseless in fact, unsupported in the law, and retaliatory.
The parties presented their cases to Associate Chief Administrative Law Judge Gerald M. Etchingham during a three-day trial in late October 2012. Before a decision issued, the Company, the discharged employees, and Counsel for the Acting General Counsel entered into a settlement agreement that was approved by Judge Etchingham and forwarded to the Board for final approval.
The $315,000 settlement covers lost wages and benefits for the employees, who waived their right to reinstatement to their former positions, as well as attorneys' fees incurred in defending the retaliatory lawsuit in state court. The agreement also called for the Company to withdraw the state court lawsuit, terminate the representation of employees by its attorney, and post, read, and mail a Notice informing current and former employees of their rights.
A plastic surgery center in Dallas has agreed to pay more than $300,000 to settle charges that it unlawfully fired two employees and then sued one of them in state court after she sought help from the NLRB's Fort Worth office.
The center, Advanced Facial Plastic Surgery Center, PA, also agreed to drop the state lawsuit, to rescind a rule prohibiting wage discussions by employees, and to cease paying its attorney to unlawfully and coercively represent its employees. The National Labor Relations Board issued an order on May 29, 2013 approving the terms of the formal settlement.
The case began in December 2010, when a medical technologist at the center was fired for discussing bonuses with other employees. Under the National Labor Relations Act, employees are guaranteed the right to discuss wages and other terms and conditions of employment with co-workers. The technologist filed a charge with the NLRB office in Fort Worth and, following an investigation, the Regional Director issued a complaint and scheduled a trial before an Administrative Law Judge.
The plastic surgery center then fired another employee, a surgical consultant, after she defended her co-workers in a meeting and engaged in other protected concerted activity. That employee filed a charge with the Fort Worth office, which issued a second complaint and consolidated the two cases.
Throughout the NLRB investigations, the center's attorney claimed to represent center employees, requiring all contact with the employees to go through his office. In her charge, the surgical consultant alleged she had been coerced into being represented by the company attorney.
After the surgical consultant filed NLRB charges, the company attorney filed a lawsuit in state court against her, alleging she had been negligent and breached certain fiduciary duties. The NLRB's investigation and analysis determined that the lawsuit was baseless in fact, unsupported in the law, and retaliatory.
The parties presented their cases to Associate Chief Administrative Law Judge Gerald M. Etchingham during a three-day trial in late October 2012. Before a decision issued, the Company, the discharged employees, and Counsel for the Acting General Counsel entered into a settlement agreement that was approved by Judge Etchingham and forwarded to the Board for final approval.
The $315,000 settlement covers lost wages and benefits for the employees, who waived their right to reinstatement to their former positions, as well as attorneys' fees incurred in defending the retaliatory lawsuit in state court. The agreement also called for the Company to withdraw the state court lawsuit, terminate the representation of employees by its attorney, and post, read, and mail a Notice informing current and former employees of their rights.
Monday, June 10, 2013
CFTC CHARGES BANC de BINARY, LTD., WITH VIOLATING OFF-EXCHANGE OPTIONS TRADING BAN
FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Charges "Prediction Market" Proprietor Banc de Binary with Violating the CFTC’s Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed on June 5, 2013 a civil complaint in federal district court in Nevada charging Banc de Binary, Ltd. (Banc de Binary), a foreign company that held itself out as being headquartered on Wall Street, with violating the CFTC’s ban on off-exchange options trading by offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. customers. The CFTC’s complaint also charges Banc de Binary with operating as an unregistered Futures Commission Merchant (FCM).
According to the CFTC’s complaint, Banc de Binary operates an online trading website through which customers can buy or sell binary ("call" or "put") options, predicting whether the price of a certain commodity will increase or decrease in a given time period.
Specifically, from May 2011 through March 2013, Banc de Binary operated an online trading website which allowed U.S. customers to trade options products prohibited by the CFTC’s ban on off-exchange options trading. Through its website, Banc de Binary allegedly unlawfully solicited and permitted U.S. customers to buy and sell options betting on the prices of wheat, oil, platinum, sugar, coffee, corn, foreign currency pairs, and stock indices.
The CFTC’s complaint also charges Banc de Binary with operating as an unregistered FCM from July 2011 through March 2013. Finally, the complaint alleges the company did not limit its options offerings to eligible contract participants, allowing U.S. customers to trade without requiring any information about their trading history or net worth.
David Meister, the Director of the CFTC’s Division of Enforcement, stated: "If a company wants to offer U.S. persons the opportunity to buy and sell predictions on the direction of commodity prices, the company must play by the rules or suffer the consequences. The applicable rules are on the books for good reason – to protect market participants and promote market integrity – and we will serve the public by enforcing them."
The CFTC seeks civil monetary penalties, an injunction preventing Banc de Binary from engaging in certain commodity options activity with U.S. customers, and other remedial ancillary relief, including restitution, disgorgement, and rescission.
The CFTC acknowledges the Securities and Exchange Commission, the United Kingdom Financial Conduct Authority, and the Cyprus Securities and Exchange Commission for their assistance in the investigation of Banc de Binary.
CFTC Division of Enforcement staff members responsible for this case are David S. Slovick, Margaret Aisenbrey, Jessica Harris, Mary Lutz, Kathleen Banar, Rick Glaser, and Richard Wagner
CFTC Charges "Prediction Market" Proprietor Banc de Binary with Violating the CFTC’s Off-Exchange Options Trading Ban and Operating as an Unregistered Futures Commission Merchant
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed on June 5, 2013 a civil complaint in federal district court in Nevada charging Banc de Binary, Ltd. (Banc de Binary), a foreign company that held itself out as being headquartered on Wall Street, with violating the CFTC’s ban on off-exchange options trading by offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. customers. The CFTC’s complaint also charges Banc de Binary with operating as an unregistered Futures Commission Merchant (FCM).
According to the CFTC’s complaint, Banc de Binary operates an online trading website through which customers can buy or sell binary ("call" or "put") options, predicting whether the price of a certain commodity will increase or decrease in a given time period.
Specifically, from May 2011 through March 2013, Banc de Binary operated an online trading website which allowed U.S. customers to trade options products prohibited by the CFTC’s ban on off-exchange options trading. Through its website, Banc de Binary allegedly unlawfully solicited and permitted U.S. customers to buy and sell options betting on the prices of wheat, oil, platinum, sugar, coffee, corn, foreign currency pairs, and stock indices.
The CFTC’s complaint also charges Banc de Binary with operating as an unregistered FCM from July 2011 through March 2013. Finally, the complaint alleges the company did not limit its options offerings to eligible contract participants, allowing U.S. customers to trade without requiring any information about their trading history or net worth.
David Meister, the Director of the CFTC’s Division of Enforcement, stated: "If a company wants to offer U.S. persons the opportunity to buy and sell predictions on the direction of commodity prices, the company must play by the rules or suffer the consequences. The applicable rules are on the books for good reason – to protect market participants and promote market integrity – and we will serve the public by enforcing them."
The CFTC seeks civil monetary penalties, an injunction preventing Banc de Binary from engaging in certain commodity options activity with U.S. customers, and other remedial ancillary relief, including restitution, disgorgement, and rescission.
The CFTC acknowledges the Securities and Exchange Commission, the United Kingdom Financial Conduct Authority, and the Cyprus Securities and Exchange Commission for their assistance in the investigation of Banc de Binary.
CFTC Division of Enforcement staff members responsible for this case are David S. Slovick, Margaret Aisenbrey, Jessica Harris, Mary Lutz, Kathleen Banar, Rick Glaser, and Richard Wagner
Sunday, June 9, 2013
DOCTOR CONVICTED OF RECEIVING KICKBACKS FROM HOSPICE COMPANY
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, June 3, 2013
Doctor Convicted in Kickback Scheme Involving a Philadelphia Hospice
A federal jury sitting in the Eastern District of Pennsylvania convicted Eugene Goldman, M.D., 55, of Philadelphia, of one count of conspiring to violate the anti-kickback statute and four counts of violating the anti-kickback statute in relation to his role in a kickback scheme arising from his employment as the Medical Director at Home Care Hospice Inc. (HCH), announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.
The evidence at trial proved that from approximately December 2000 until approximately July 2011, Goldman served as the medical director for HCH and regularly referred Medicare or Medicaid patient beneficiaries to HCH. HCH was a for-profit business in Philadelphia that provided hospice services for patients at nursing homes, hospitals and private residences.
In December 2000, Goldman and one of the co-owners of HCH entered into a written contract to create the false appearance that all payments to Goldman from HCH were for services rendered in Goldman’s capacity as medical director for HCH, when in fact the large majority of payments from HCH to Goldman were illegal payments for the referral of Medicare and/or Medicaid patients to HCH. From January 2003 to October 2008, Goldman received approximately $263,000 in illegal payments for patient referrals. In January, February and March 2009, Goldman was captured on tape receiving kickbacks for patient referrals.
Goldman faces a maximum penalty of five years in prison for each count of conviction when he is sentenced on Sept. 9, 2013, by U.S. District Judge Eduardo Robreno. The conviction will result in the mandatory exclusion of Goldman from participation in any federal health care program, and he also faces the possible loss of his medical license.
The case was investigated by the FBI and the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Suzanne B. Ercole and Trial Attorney Margaret Vierbuchen of the Organized Crime and Gang Section in the Justice Department’s Criminal Division prosecuted the case on behalf of the United States.
Monday, June 3, 2013
Doctor Convicted in Kickback Scheme Involving a Philadelphia Hospice
A federal jury sitting in the Eastern District of Pennsylvania convicted Eugene Goldman, M.D., 55, of Philadelphia, of one count of conspiring to violate the anti-kickback statute and four counts of violating the anti-kickback statute in relation to his role in a kickback scheme arising from his employment as the Medical Director at Home Care Hospice Inc. (HCH), announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.
The evidence at trial proved that from approximately December 2000 until approximately July 2011, Goldman served as the medical director for HCH and regularly referred Medicare or Medicaid patient beneficiaries to HCH. HCH was a for-profit business in Philadelphia that provided hospice services for patients at nursing homes, hospitals and private residences.
In December 2000, Goldman and one of the co-owners of HCH entered into a written contract to create the false appearance that all payments to Goldman from HCH were for services rendered in Goldman’s capacity as medical director for HCH, when in fact the large majority of payments from HCH to Goldman were illegal payments for the referral of Medicare and/or Medicaid patients to HCH. From January 2003 to October 2008, Goldman received approximately $263,000 in illegal payments for patient referrals. In January, February and March 2009, Goldman was captured on tape receiving kickbacks for patient referrals.
Goldman faces a maximum penalty of five years in prison for each count of conviction when he is sentenced on Sept. 9, 2013, by U.S. District Judge Eduardo Robreno. The conviction will result in the mandatory exclusion of Goldman from participation in any federal health care program, and he also faces the possible loss of his medical license.
The case was investigated by the FBI and the Department of Health and Human Services, Office of Inspector General. Assistant U.S. Attorney Suzanne B. Ercole and Trial Attorney Margaret Vierbuchen of the Organized Crime and Gang Section in the Justice Department’s Criminal Division prosecuted the case on behalf of the United States.
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