All information in this report was compiled from public records maintained by the SEC.
Getting the Premium Point
Amin Majidi, 56, of Armonk, New York, on April 14 entered an offer of settlement for an SEC Order. Majidi pled guilty to deceptively mismarking the values of certain securities and fraudulently inflating the net asset values of the funds in a civil action titled Securities and Exchange Commission v. Premium Point Investments LP, et al., 18 Civ. 4145 (JPC), in the United States District Court for the Southern District of New York.
Majidi worked at Premium Point Investments from November 2008 to June 2016, initially as its chief risk officer, then as the portfolio manager of one of its funds beginning in 2014. Before, during, and after this time, he was also associated with several SEC-registered broker-dealers. The SEC’s amended complaint alleged Majidi was part of a fraudulent scheme to inflate securities’ value held by private investment funds that Premium Point managed. He also tried to hide the funds’ poor performance to stem redemptions and get investors to invest in a new fund.
Majidi pled guilty to securities fraud, conspiracy to commit securities fraud, wire fraud, and conspiracy to commit wire fraud on Oct. 31, 2018 in United States v. Ahuja et al.
The SEC barred Majidi from association with any broker, dealer, statistical rating organization, municipal advisor, municipal security dealer, or transfer agent and from participating in any offering of a penny stock.
Down to the Wire
Jerome Austin, 59, of Otisville, New York, on April 13 entered an offer of settlement for an SEC Order. Austin pled guilty to defrauding investors through false and misleading statements via wire and other communications before the United States District Court for the Southern District of New York in United States v. Jerome Austin.
Austin was associated with one or more unregistered foreign-based broker-dealers from 2016 through approximately August 2021. He admitted to conspiracy to commit securities fraud, conspiracy to commit wire fraud, and making false statements to federal agents
A judgment in the criminal case was entered against Austin on Sept. 30, 2022. He was sentenced to a 60-month prison term followed by three years of supervised release and ordered to make restitution of more than $2 million in addition to forfeiture of $66,166. Austin is currently incarcerated in Otisville, New York.
The SEC barred Austin from association with any dealer, broker, transfer agent, statistical rating organization, municipal security dealer, or municipal advisor and from participating in any offering of a penny stock.
Insurance Scheme and Money Laundering
George A. Schmidt, Jr., 60, of East Islip, New York, on April 13 entered an offer of settlement for an SEC Order. Schmidt pled guilty to four counts of wire fraud, two counts of mail fraud, and two counts of money laundering before the United States District Court for the Eastern District of New York.
A judgment was entered against Schmidt on Jan. 30, sentencing him to 42 months in prison, followed by two years of supervised release. He admitted to submitting fraudulent and false paperwork to insurance companies as part of a scheme and stealing over $1 million. Schmidt was ordered to pay $1,038,927 in restitution.
The SEC barred Schmidt from association with any dealer, broker, municipal advisor, municipal security dealer, transfer agent, or statistical rating organization and from participating in any offering of a penny stock.
The INSO and Outs
Michael K. Molen, 66, of Berkeley Lake, Georgia, on April 12 entered an offer of settlement for an SEC Order. Molen was found guilty of preparing and posting false and misleading financial reports and unaudited financial statements in a civil action before the United States District Court for the Northern District of Georgia, Atlanta Division in Securities and Exchange Commission v. Michael K. Molen, et al.
Molen was the sole officer, director, and controlling shareholder of Enviro Impact Resources, formerly known as Industry Source Consulting (INSO), a public company that posts reports on the OTC Markets Group website. From 2014 to 2022, Molen prepared and posted INSO’s reports as its principal financial officer and executive officer and signed and certified these reports, although he was not licensed as a CPA.
The SEC determined Molen did not accurately disclose INSO’s financial condition, cash flows, and results of operation and reported a $500,000 license as its principal asset with insufficient support for its valuation and made false and misleading statements to brokerage firms, INSO’s transfer agent, and others to make fraudulent transactions in INSO stock and convertible promissory notes, mostly for Molen’s benefit.
The judgment entered against Molen on March 30 prohibited him from future violations, and ordered an officer and director bar as well as a penny stock bar. Molen will also pay disgorgement of ill-gotten gains plus prejudgment interest and a civil penalty, in amounts to be determined at a later date. He was also suspended from appearing or practicing before the SEC as an accountant.