All information in this report on penny stock violations was compiled from public records maintained by the SEC.
Financial Gain for City Trauma
Joseph M. Kirkland, 57, of Carpinteria, California, on April 4 entered an offer of settlement for an SEC Order. Kirkland pled guilty to one count of conspiracy to commit wire fraud before the United States District Court for the District of Puerto Rico, in United States v. Joseph Kirkland, et al. He awaits sentencing.
Kirkland was a registered representative at UnionBanc Investment Services in Santa Barbara, California, from January 2015 through May 2017 and at LPL Financial in Carpinteria, California, from May 2017 through April 2018, dually registered as a broker-dealer and investment adviser with the SEC. LPL terminated Kirkland in April 2018.
In his guilty plea, Kirkland admitted that from about March 2016 to June 2018, he conspired with others to defraud the Municipality of Mayagüez, Puerto Rico, and its municipal enterprise, Mayagüez Economic Development, to obtain money and property by making false and misleading statements involving the entities’ funds.
Kirkland was a registered representative responsible for the Mayagüez Economic Development’s brokerage account at UnionBanc, which held $9 million of city funds for improving a local trauma center. The defendant made false statements through electronic messages that the money in principal was invested at a high rate of return, while Kirkland caused financial transactions that depleted the funds and converted a portion of them for his personal use.
The SEC barred Kirkland from association with any broker, dealer, transfer agent, statistical rating organization, municipal security dealer, or municipal advisor and from participating in any offering of a penny stock.
Tapping in on the Elderly
Mario E. Rivero, 39, of Red Bank, New Jersey, on March 28 entered an Offer of Settlement for an SEC Order. The SEC’s complaint alleged between July 2018 and November 2020, Rivero convinced at least five of his clients to transfer funds from their accounts to organizations with which he was associated. Rivero falsely told his victims that these fund transfers were to make investments on their behalf but he misappropriated $680,000 from these clients.
According to the SEC complaint, Rivero siphoned the money from the entities that received the investor funds for his own behalf, and some of the clients were elderly or suffering from memory loss. In a parallel action in March, the United States Attorney’s Office for the District of New Jersey announced criminal charges against Rivero.
The SEC barred Rivero from association with any broker, dealer, transfer agent, statistical rating organization, municipal security dealer, or municipal advisor and from participating in any offering of a penny stock.
Stay tuned for more SEC penny stock violations as they happen.