Broker-Dealer Litigation - Greenberg Traurig LLP

thousands of dollars to finance his lavish lifestyle which included a $2 million dollar home and
luxury vehicles.
Under Section 10(b) of the Exchange Act and Rule 10b-5, Finger and Black Diamond are
charged for their fraudulent behavior in connection with the purchase or sale of securities. Black
Diamond is charged under 15(c)(1)(A) as broker and Finger is charged under Section
15(c)(1)(A) for aiding and abetting the fraudulent activity of the brokerage firm. The SEC seeks
permanent injunctions, disgorgement of ill-gotten gains, civil penalties, prejudgment interest, an
asset freeze, an accounting, and orders allowing for expedited discovery and prevention of any
destruction of accounting records, ledgers, and other business instrumentalities.
In re Richard Goble, 2011 SEC LEXIS 3492, SEC Initial Decision Release No. 435 (October 5,
2011)
On October 5, 2011, administrative law judge Cameron Elliot granted the SEC’s Motion
for Summary Disposition affirming the April 27, 2011 district court decision holding Richard L.
Goble liable for committing fraud and aiding and abetting his clearing firm’s violations of
sections 10(b), 15(c)(3), and 17(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and
Exchange Act Rules 10b-5, 15c3-3, and 17a-3. Goble was the founder, sole owner, former board
member, and a director of North American Clearing, Inc (“North American”). North American
was a clearing firm for approximately 40 correspondent firms and more than 10,000 customer
accounts. In response to financial trouble arising in late 2007, Goble and his financial team
falsified final records in an effort to obtain operating funds through consumer funds maintained
in a special reserve account (“Account”). Based on this false documentation, Goble illegally
transferred $3.4 million from the Account. Goble was permanently enjoined from violating SEC
laws and from attempting to obtain a security license and/or engage in the securities business.
Goble also had to pay a $7,500 civil penalty.
On May 14, 2008, to comply with Exchange Act 15(c)(3) and Rule 15c3-3 weekly
reserve requirements, Goble instructed Timothy Ward, former financial and operations principal,
to record a sham purchase of approximately $5 million in money market funds and to fabricate
North American’s money market statement to show a customer credit balance of $5 million less
than its actual balance. Since these falsified documents showed customer debits exceeded
customer credits, Wade was seemingly able to lawfully withdraw $3.4 million from the Account
to meet legitimate operational expenses. On May 15, 2008, FINRA examiners discovered the
sham exchange and immediately directed North American to return the $3.4 million to the
Account. Using the proper financial data, FINRA also determined that North American actually
owed the Account $1.8 million. Unable to meet the deposit requirement, North American was
forced into bankruptcy and charges were brought against North American officials.
The SEC investigation began on May 27, 2008 when Goble, Bruce Blatman, former
North American president, and Ward were charged with violations of 10(b), 15(c)(3), and 17(a)
of the Exchange Act and Exchange Act Rules 10b-5, 15c3-3, and 17a-3. Blatman and Ward
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