CRIMINAL CAPITALI$M THE AMERICAN WAY
Glendale Man, Companies Ordered To Pay Restitution For Ponzi Sheme
The Arizona Corporation Commission ordered Tony Spooner of Glendale, First Federal Security, Inc., and Rokay Unlimited, LLC to pay $774,158 in restitution and a $50,000 administrative penalty for defrauding investors.
The Commission found the respondents offered and sold unregistered securities and notes issued by companies controlled by EquiAlt, LLC to at least 47 investors, the majority of whom were senior citizens investing a significant portion of their life savings. However, the respondents were not registered to offer or sell securities in Arizona.
The Commission found the respondents, during the offer or sale of EquiAlt securities, made material misrepresentations and omissions to the investors regarding the securities’ risk and liquidity.
The Corporation Commission found Spooner and his affiliated companies represented to investors that EquiAlt, LLC was raising capital to purchase, improve, lease, and dispose of distressed real property. In actuality, EquiAlt, LLC was operating as a nationwide Ponzi scheme.
Paradise Valley Serial Securities Violator Ordered To Pay $733,606 In Restitution
The Arizona Corporation Commission has ordered Michael Barry Eckerman of Paradise Valley, Luxury Management Group and MTE 2013 Trust to pay restitution and administrative penalties for defrauding investors with an investment involving real estate and luxury automobile rentals.
The Commission ordered the respondents to pay $733,606 in restitution. The Commission ordered Eckerman to pay an administrative penalty of $100,000 and Luxury Management Group to pay a $70,000 penalty.
The Commission found Luxury Management Group, LLC was a short-term real estate and automobile rental company that sold unregistered promissory notes to three investors, two of whom also were sold future options in company stock and one of whom was also sold investment contracts. One investor placed her life’s savings with respondents.
The Commission found the respondents titled their contracts as “commercial paper loans” when they were actually securities subject to the Commission’s jurisdiction. None of the respondents were authorized to offer or sell securities in Arizona.
The Commission found Michael Eckerman was the subject of prior temporary cease and desist orders filed by the Corporation Commission, Michael Eckerman’s prior companies failed to pay investors and Luxury Management Group’s house rentals were threatened by injunction litigation initiated by a Paradise Valley homeowner’s association.
Sellers Penalized For Unlawful $114 Million Investment In Social Media Business
The Arizona Corporation Commission ordered Voice of Guo Media, Inc. (VGM) and Lihong Wei Lafrenz of Tucson to pay a $100,000 administrative penalty for defrauding investors in connection with a social media business.
The Commission found Lafrenz, also known as Sara Wei, offered and sold securities issued by GTV Media Group, Inc. (GTV), an entity controlled by Guo Wengui, also known as Miles Kwok or Miles Guo. Investors were told they would receive a return related to GTV’s social media business. However, Lafrenz and Voice of Guo Media, Inc. were not registered to offer or sell securities in Arizona.
The Commission found the respondents sold approximately $114 million in GTV stock to more than 4,500 investors from 39 countries, including U.S. investors from at least 37 states.
The Commission found the respondents promoted the stock offering in online chatrooms and through emails to investors, some of whom were accredited and non-accredited. There was no minimum investment amount to invest in the stock offering through VGM and investment amounts were generally in the amount of $100 or more.
The U.S. Securities and Exchange Commission (SEC) also filed an action against Voice of Guo Media, Inc. and Lihong Wei Lafrenz, and has already ordered VGM to pay disgorgement to the SEC in its action.
Happy Tuesday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line.
Today’s Big Deal: The Federal Trade Commission (FTC) and Department of Justice's antitrust division have launched a new inquiry aimed at updating guidelines to block illegal mergers. We’ll also look at the Supreme Court’s recent rejection of a request to block a federal mask mandate for air travel.
But first, check out the massive asteroid passing by Earth today.
For The Hill, we’re Sylvan Lane (slane@thehill.com), Aris Folley (afolley@thehill.com) and Karl Evers-Hillstrom (kevers@thehill.com).
Let’s get to it.
Feds launch inquiry amid surge in mergers
The FTC and Department of Justice's antitrust division on Tuesday launched a new inquiry aimed at updating guidelines to block illegal mergers.
The agencies are seeking public input to update guidelines over the next 60 days.
“Illegal mergers can inflict a host of harms, from higher prices and lower wages to diminished opportunity, reduced innovation and less resiliency,” FTC Chair Lina Khan said in a statement.
- The inquiry comes amid a surge in new mergers, filings for which doubled between 2020 and 2021.
- The two agencies tasked with antitrust enforcement spent 18 months reviewing their joint guidance on vertical mergers during the Trump administration. The FTC voted last fall to withdraw those guidelines on a party-line vote.
- The Department of Justice separately said it intends to review guidelines for both vertical mergers — referring to acquisitions within the same supply chain — and horizontal ones, which deal with competitors.
The announcement Tuesday is one of the first major collaborations between Khan and Kanter, two nominees of President Biden who were strongly backed by progressives.
The Hill’s Chris Mills Rodrigo has more here.
TRADING TROUBLES
Two-thirds of Americans support banning lawmakers from trading stocks: poll
Sixty-seven percent of Americans support banning lawmakers from trading stocks, according to a new poll from progressive firm Data for Progress.
The poll, released on Tuesday, found that figure increased to 74 percent when respondents were given arguments for and against a ban.
Seventy-five percent of Democrats said they strongly or somewhat support a ban on lawmaker stock trading alongside 76 percent of independents and 70 percent of Republicans.
- It follows another poll from the Trafalgar Group and conservative advocacy group Convention of States Action finding that 76 percent of voters believe that lawmakers and their spouses have an “unfair advantage” when trading stocks.
- Speaker Nancy Pelosi (D-Calif.) has said that lawmakers have the right to make private investments, but she recently announced that Congress may need stricter penalties for those who violate stock trading rules.
Several lawmakers, including Sens. Jon Ossoff (D-Ga.), Mark Kelly (D-Ariz.) and Josh Hawley (R-Mo.) recently introduced bills to prevent members of Congress from trading stocks.
Read more here from The Hill’s Olafimihan Oshin.
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