Broker-Dealer Litigation - Greenberg Traurig LLP

Q.1.b
In re Wells Fargo Sec. LLC, Release No. 64182, 2011 SEC LEXIS 1202 (Apr. 5, 2011).
The Commission accepted an offer of settlement from Wells Fargo Securities LLC (the “Firm”),
a registered broker-dealer. The Commission alleged that during late 2006 and early 2007, the
Firm’s predecessor structured and marketed two collateralized debt obligations tied to mortgagebacked
securities in violation of the antifraud provisions of the Securities Act of 1933. The
Commission alleged that the Firm’s predecessor charged an undisclosed excessive markup in
connection with certain sales of one of the securities, and that it knew or should have known that
the prices it charged were excessive. It further alleged that the Firm’s predecessor represented to
investors in the other security that it acquired assets from affiliates in an arm’s-length transaction
and at fair market prices when certain assets were transferred from an affiliate at approximately
$4.6 million above market value. The Commission ordered the Firm to cease and desist from
violating Sections 17(a)(2) and (3) of the Securities Act and to pay $6.75 million in
disgorgement and a $4.45 million civil penalty.
In re Rodriguez, Release No. 66056, 2011 SEC LEXIS 4546 (Dec. 23, 2011).
Q.1.b
The Commission accepted an offer of settlement from Rodriguez, a former registered
representative and trader of a registered broker-dealer and investment adviser. The Commission
alleged that Rodriguez violated the antifraud provisions of the federal securities laws by
needlessly interposing a Mexican brokerage firm into securities transactions between his firm
and a Mexican investment adviser’s institutional clients. As a result, four Mexican pension
funds paid approximately $65 million more for certain notes than they would have otherwise
paid, and Rodriguez received more than $6 million in additional markups. The Commission
ordered Rodriguez to cease and desist from violating the antifraud provisions of the federal
securities laws and to pay disgorgement of $6,041,810 and prejudgment interest of $613,667.
The Commission also barred Rodriguez from association and from participating in any offering
of penny stock, and prohibited him from serving as an employee, officer, director, board
member, investment adviser, depositor or principal underwriter for a registered investment
company.
c. Other Fraudulent Practices
(i)
Misappropriation
Q.1.c.(i)
In re Awan, Release No. 65961, 2011 SEC LEXIS 4410 (Dec. 15, 2011); SEC v. OCC Holdings,
Ltd., Litig. Release No. 22200, 2011 SEC LEXIS 4442 (S.D.N.Y. Dec. 16, 2011).
A federal district court entered judgments by consent against Awan and Koppel, the
remaining defendants in a case arising out of allegedly fraudulent offerings of securities. The
Commission previously obtained summary judgment or default judgment, as the case may be,
against certain other defendants, and voluntarily dismissed its claims against another defendant.
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