Saturday, September 10, 2011

SEC ALLEGES BROOKE CAPITAL CORP. FAILED TO DISCLOSE FINANCIAL CONDITION TO FRANCHISEES

The following is an excerpt from the SEC website:
“The Securities and Exchange Commission announced today that the United States District Court for the District of Kansas entered a judgment, dated September 8, 2011, against Kyle L. Garst, the former chief executive officer of Kansas-based Brooke Capital Corporation (“Brooke Capital”). Brooke Capital was an insurance agency franchisor and a subsidiary of Brooke Corporation, a Kansas company founded by Robert Orr. Garst, without admitting or denying the Commission’s allegations, consented to a judgment enjoining him from future violations of the federal securities laws.
According to the SEC’s Complaint, in SEC filings signed by Garst, Brooke Capital’s former management inflated the number of reported insurance agency franchise locations by including failed and abandoned locations in totals set forth in SEC filings for year-end 2007 and the first quarter of 2008. The Complaint also alleges that Brooke Capital’s former management, among other things, concealed the nature and extent of Brooke Capital’s financial assistance to its franchisees, which included making franchise loan payments on behalf of struggling franchisees, and failed to disclose the company’s dire liquidity and financial condition.
Specifically, the judgment enjoins Garst from violating Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933, and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 13b2-1, 13b2-2, and 13a-14 thereunder, and from aiding and abetting violations Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. In addition to the injunction, the judgment bars Garst from serving as an officer or director of a public company and imposes a $130,000 civil penalty.”

Tuesday, September 6, 2011

NEW GOLDEN INVESTMENT GROUP, LLC AND PRINCIPALS ARE JUDGED

July 28, 2011

The following is an excerpt from the SEC website:
"Washington, DC
The judgments arise from a CFTC complaint filed in the U.S. District Court for the Central District of California, Western Division, on May 20, 2010, charging NGI, Gonzalez, and Naranjo with fraud and misappropriation in connection with a multi-million dollar Ponzi scheme (see CFTC Press Release 5828-10, May 2011). The CFTC’s complaint charged that the defendants fraudulently solicited and accepted approximately $3.65 million from at least 165 members of the Los Angeles-area Spanish speaking community for various investments, including commodity futures trading. Gonzalez and Naranjo were also charged with misappropriating hundreds of thousands of dollars of investor funds for their personal use.
The judgments against Gonzales, NGI, and Naranjo, entered on July 20, 2011, July 19, 2011, and February 15, 2011, respectively, impose permanent trading and registration bans on them. The orders require NGI and Naranjo each to pay $2,220,771.49 in restitution, NGI and Naranjo to pay disgorgement of $558,000 and 267,000, respectively, and civil monetary penalties of $1,674,000 and $801,000, respectively. Naranjo, a Mexican National, is believed to have fled the United States.
The judge ordered Gonzales to disgorge $249,000 and pay a $748,500 civil monetary penalty. Gonzalez was sentenced in December 2010 to more than 11 years imprisonment, after pleading guilty to fraud charges in a related criminal proceeding filed on the same day as the CFTC action (see United States v. Ruben Juan-Gonzalez, No. CR-10-0509-PA [C.D.Cal. filed May 20, 2010]). The criminal court ordered Gonzales to pay $2,220,771.49 in restitution to defrauded NGI pool participants for the same misconduct charged in the CFTC’s civil complaint.
The court’s judgments find that NGI, Gonzalez, and Naranjo solicited the Spanish speaking public in and around West Covina, Calif., to trade commodity futures and retail off-exchange foreign currency and falsely claimed that they would double their money within a year. In reality, NGI, Gonzalez, and Naranjo misappropriated over $1 million of customer funds to purchase a Mercedes-Benz, airline tickets, and to make house payments. The orders also find that NGI, Gonzalez, and Naranjo ran a Ponzi scheme using new investor money to pay phony profits to some existing investors.
The CFTC appreciates the assistance of the United States Attorney’s Office for the Central District of California and the Federal Bureau of Investigation.”

NOTE FROM CFTC: Gonzalez sentenced to more than 11 years imprisonment in a criminal proceeding for the same fraudulent scheme.
— The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Otis D. Wright II of the U.S. District Court for the Central District of California, Western Division, entered orders for default judgment and permanent injunction against defendants New Golden Investment Group, LLC (NGI) of West Covina, Calif., and its principals, Ruben Gonzalez also of West Covina, and Jose Naranjo, formerly of La Mirada, Calif.

Monday, September 5, 2011

VA HAS ADDED MORE DISEASES TO LIST OF DISEASES CAUSED BY AGENT ORANGE

The following is an excerpt from the VA website:

"Last year, VA added ischemic heart disease, hairy cell leukemia and other chronic B-cell leukemias, and Parkinson’s disease to the list of diseases presumed to be related to exposure to Agent Orange in Vietnam. It was a long time coming for Veterans who have been debilitated by diseases they may have contracted as a result of their combat deployment. So far, over $2.2 billion has been paid to 89,000 Vietnam Vets and survivors who have filed claims.
Today, VA is recognizing many Vets who may have been exposed to Agent Orange by contact from operations on and off their Naval and Coast Guard vessels. An updated list of ships that navigated inland waterways, docked on shore, or had crewmembers sent ashore in Vietnam between January 9, 1962, and May 7, 1975 are listed alphabetically here.
If you served aboard any of those ships and have a disease linked to Agent Orange, you should file a claim immediately. You can file online through eBenefits after setting up a premium account. "

Sunday, September 4, 2011

FEDERAL COURT FREEZES ASSETS OF FINANCIAL ROBOTICS INC., OF HOUSTON TEXAS

July 7, 2011
The following is an excerpt from the SEC website:
“Washington, DC
The order arises out of a CFTC civil complaint filed under seal on June 29, 2011 in the U.S. District Court for the Southern District of Texas. The complaint charges Rice and FinRob with fraudulently soliciting millions of dollars from at least one individual to trade off-exchange foreign currency (forex) through accounts that they managed. In their solicitations, the defendants allegedly falsely claimed that their investments were insured against loss. The defendants also falsely guaranteed the return of the principal amount invested, according to the complaint.”
- The U.S. Commodity Futures Trading Commission (CFTC) announced that a federal court in Houston entered an order freezing the assets of Mark E. Rice of Sugar Land, Texas, and his company, Financial Robotics, Inc. (FinRob) of Houston, Texas. The order, entered by Judge Lee H. Rosenthal, also prohibits the destruction of books and records and appoints a temporary receiver. The judge ordered Rice and FinRob to appear in court on July 28, 2011 for a preliminary injunction hearing.