Current Industry-Related Sanctions

The list below is a record of individuals who, since 1 January 2000, are currently serving public disciplinary sanctions for violations of the CFA Institute Code of Ethics and Standards of Professional Conduct or have resigned their memberships while under investigation for industry-related misconduct.

Public sanctions for industry-related conduct may include the following:

  • Censure

  • Suspension from the CFA Program

  • Suspension of membership

  • Suspension of the right to use the CFA designation

  • Permanent prohibition/suspension from the CFA Program

  • Revocation of membership

  • Revocation of the right to use the CFA designation

  • Summary suspension

Individuals with timed suspensions only appear for the duration of the suspension and are removed at the expiration of the suspension. Individuals who have received disciplinary sanctions of private reprimand or who have been sanctioned for exam-related conduct do not appear on the list. Exam-related disciplinary actions are posted after each exam cycle.

In rare circumstances, the names of individuals with a current public sanction do not appear on the list below. To verify an individual's complete public sanction history with CFA Institute, including unpublished and/or previous public sanctions, contact the Professional Conduct Program. Please provide identifying information such as full name and CFA charter or I.D. number if available, or full name and date of birth, employer, city, state, country, and/or e-mail address.




Adebayo-Adedayo, Ibukun, Omolayo (Nigeria)
On 21 March 2017, CFA Institute imposed a Summary Suspension on Ibukun Adebayo-Adedayo (Ilorin, Nigeria), a lapsed charterholder member, automatically suspending her membership and right to use the CFA designation. Adebayo-Adedayo was suspended for her failure to cooperate in connection with a disciplinary hearing related to allegations brought by the Economic and Financial Crimes Commission of Nigeria (EFCC) and her former employer, Ventures and Trust Limited, that between 2007 to 2009, Adebayo-Adedayo stole a total of N34,801,444 in client funds, which she then used for personal expenses. As a result of her non-cooperation, Professional Conduct was unable to determine whether she violated the CFA Institute Code and Standards. Because she did not request a review, the summary suspension became a Revocation on 24 April 2017.  
Adondakis, Spyridon, G. (US)

Effective 3 August 2017, CFA Institute imposed a Revocation of membership and of the right to use the CFA designation on Spyridon G. “Sam” Adondakis (New York, New York), a lapsed charterholder member. This sanction was based on the determination that Adondakis violated the CFA Institute Code of Ethics and Standards of Professional Conduct: I(C) – Misrepresentation; I(D) – Misconduct; II(A) – Material Nonpublic Information; and IV(A) – Loyalty (2005).

In January 2012, the U.S. Attorney’s Office for the Southern District of New York announced the unsealing of a guilty plea by Adondakis, a research analyst at the hedge fund Level Global Investors, to felony criminal charges that he conspired with others to engage in insider trading. According to the government, Adondakis participated in a scheme with fund managers and research analysts at five different investment firms to share material, nonpublic information about two publicly-traded technology companies. Based on his guilty plea, Professional Conduct imposed a Summary Suspension automatically suspending Adondakis’ membership and right to use the CFA designation. Adondakis did not request a review and the Summary Suspension automatically became a revocation in March 2012.

In January 2017, Adondakis requested that the revocation be rescinded and provided documents showing that the criminal charges filed against him by the U.S. Attorney’s Office had been dismissed. The dismissal resulted from a decision issued by the U.S. Court of Appeals for the Second Circuit in a related case, that found that the transactions that were the basis for the entry of judgment against Adondakis and others did not constitute illegal insider trading. The U.S. Supreme Court subsequently denied the government’s petition for review of that decision.

In accordance with Rule 10.6 of the Rules of Procedure, Adondakis’ revocation was rescinded and a Notice of Rescission was published in CFA Institute Magazine and on the Institute’s public website. Professional Conduct then reopened its investigation into the underlying conduct and determined that Adondakis had intentionally and repeatedly used material, non-public information to assist Global Level in the trading of securities, and made false statements to cover up his misconduct, in violation of the Code and Standards.

In May 2017, Professional Conduct issued a Statement of Charges to Adondakis seeking a revocation of his membership and right to use the CFA designation. He failed to respond, so the matter was presented to a Review Panel, which accepted Professional Conduct’s conclusions as to violations and imposed the recommended sanction of a revocation.

Baldwin, Shawn D. (U.S.)

On 15 February, 2011, CFA Institute imposed a Summary Suspension on Shawn D. Baldwin (U.S.), a former affiliate member, pursuant to Rule 10.1(b) of the Rules of Procedure for Professional Conduct (2010). Under this Rule, the Designated Officer may suspend a covered person who is barred permanently, or for an indefinite period, by a self-regulatory organization (SRO) or government agency.

In this case, the Designated Officer determined that the Financial Industry Regulatory Authority (FINRA), a SRO in the U.S., revoked Baldwin’s registration in 2009 for refusing to pay a US$25,000 disciplinary fine and permanently barred him in two separate disciplinary cases for failing to cooperate, both of which became final in 2010. Baldwin subsequently requested a review of his Summary Suspension by CFA Institute, pursuant to Rule 10.3.

On 8 June 2011, a Summary Suspension Hearing Panel conducted a hearing by teleconference. In his testimony, Baldwin confirmed that his registration had been revoked, that he was permanently barred by FINRA twice, and that all three matters were now final. The Hearing Panel affirmed the Designated Officer’s decision to impose a Summary Suspension permanently prohibiting Baldwin from being a member of CFA Institute.

Baldwin, William L. (U.S.)

On 24 October 2012, the CFA Institute Designated Officer imposed a Summary Suspension upon William L. Baldwin (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. Baldwin was suspended for his failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because he did not request a review within the time provided under the Rules of Procedure, the Summary Suspension automatically became a Revocation on 23 November 2012.

Beugre, Serge N. (Canada)

On 15 March 2011, CFA Institute imposed a Summary Suspension on Serge N. Beugre (Canada), a charterholder member, which automatically suspended his CFA Institute membership and right to use the CFA designation.

On 7 March 2011, Beugre was convicted by a jury in the Québec Superior Court on 115 counts involving fraud, conspiracy, and fabricating false documents.
Beugre co-founded and was the general manager of Montreal-based Norbourg Asset Management until October 2005, when it ceased operations and filed for bankruptcy. Following a six-month trial, Beugre was found guilty of manipulating Norbourg’s financial statements to conceal that client funds were being diverted for personal use by certain Norbourg employees. It is estimated that 9,200 investors lost C$115 million after investing with Norbourg between 2002 and 2005.

Black, Hans P. (Canada)

On 19 November 2015, CFA Institute imposed a Summary Suspension on Hans Peter Black (Canada), a lapsed affiliate member, automatically suspending his right to reactivate his membership in CFA Institute. Black was suspended for failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because he did not request a review, the summary suspension became a Revocation on 20 December 2015.

Specifically, Black was named a defendant in a civil action filed on 16 June 2015 by the U.S. Securities and Exchange Commission (SEC) in the U.S. District Court of Massachusetts (Boston, USA). The SEC’s complaint accuses Black and his firm of an ongoing, fraudulent breach of fiduciary duty. The complaint states that since at least 2010, Black and his firm engaged in a scheme to funnel client assets into four financially troubled Canadian penny stock companies, which have collectively paid an entity controlled by Black approximately $1.7 million (CAD).

The SEC maintains that Black: (1) made misrepresentations concerning the character of the Canadian penny stock company investments; (2) ignored client instructions, and (3) knowingly and deceptively diverted from a conservative investment strategy that his firm promoted and the clients expected. According to the SEC, as of 11 March 2015, Black and his firm’s fraudulent conduct resulted in unrealized losses of more than $12 million (CAD) in client accounts.  The SEC’s complaint is pending in federal district court.

Bond, Stephen C. (US)
On 7 November 2013, CFA Institute imposed a Summary Suspension on Stephen C. Bond (US), a charterholder member, automatically suspending his membership and right to use the CFA designation. The sanction was reviewed and affirmed by a Summary Suspension Hearing Panel and became a Revocation on 15 April 2014.

On 19 September 2013, the SEC entered an Order barring Bond from, among other things, associating with any broker, dealer, or investment advisor, with the right to reapply after five years, subject to meeting certain conditions. The SEC found that Bond participated and assisted in a multi-million dollar fraud orchestrated by an individual named Albert Hu. According to the SEC, Bond worked closely with Hu in raising over US$5 million from investors for several bogus Silicon-Valley hedge funds known collectively as the “Asenqua funds.”

Specifically, the SEC found that Bond: held himself o
ut to potential investors as the “fund manager” of the Asenqua funds; met and communicated with potential investors about the bogus funds’ purported investment strategies; showed potential investors documents and made presentations touting the Asenqua funds’ outstanding investment performance; and, in doing these things, Bond substantially assisted Hu’s fraudulent scheme by lending an air of legitimacy and security to these non-existent investment funds. In fact, Bond did not manage any portfolios of investments for the Asenqua funds because there were no such portfolios; Bond simply relied on documents prepared by Hu without conducting any diligence of his own. Despite having no investments to manage, Bond accepted more than US$850,000 for playing his part in Hu’s fraudulent scheme, which represented nearly 20% of all the funds raised from investors in the Asenqua funds.

Boomgaardt, Richard, Steven (England)

On 2 August 2017, CFA Institute imposed a Summary Suspension on Richard Boomgaardt (Sevenoaks, England), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 31 August 2017.  

On 12 July 2017, Boomgaardt, a former Managing Director and head of the Transition Management desk for Europe, the Middle East, and Africa for State Street Corp., pleaded guilty to felony criminal charges in the United States Court for the District of Massachusetts. The charges were related to Boomgaardt’s involvement in allegedly fraudulent transition management fees that were levied on various institutional investors between February 2010 and September 2011. Prosecutors claimed that Boomgaardt and two co-conspirators engaged in a scheme to defraud the bank’s transition management clients by applying hidden commissions to securities trades made on behalf of the clients. 

Boonswang, Kasemsante Gog Guevara (US)

On 3 November 2014, CFA Institute imposed a Summary Suspension on Kasemsante Gog Guevara Boonswang (US), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Boonswang was suspended for his failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because he did not request a review, the Summary Suspension became a Revocation on 3 December 2014.

Borchard, William Patrick (U.S.)

On 15 June 2010, CFA Institute imposed a Summary Suspension on William Patrick Borchard (U.S.), a candidate in the CFA Program, pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure. Borchard failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct. Because Borchard failed to submit a request for review, the Summary Suspension automatically became a Prohibition from participation in the CFA Program on 15 June 2010.

Bornstein, Paul A. (U.S.)

A Summary Suspension Hearing Panel convened on 14 November 2006, upheld the Summary Suspension of Paul A. Bornstein.

On 26 April 2006, the United States Securities and Exchange Commission issued an Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions which imposed an indefinite bar on Mr. Bornstein. In accordance with Rule 7.2(b) of the CFA Institute Rules of Procedure, an automatic Summary Suspension shall be imposed if a Covered Person is barred permanently, or for an indefinite period of time, from registration under the securities laws or similar laws relating to the investment decision-making process. Mr. Bornstein requested a review of the Summary Suspension by a Hearing Panel. The Hearing Panel upheld the Summary Suspension. The Summary Suspension constitutes Mr. Bornstein’s removal from membership in CFA Institute and removal of the right to use the CFA designation.

Brooks, David M. III (U.S.)
On May 1, 2001, AIMR summarily suspended David M. Brooks’ AIMR membership and right to use the CFA designation, pursuant to Article 12.3(g) of AIMR's Bylaws and Rule 7.4 of AIMR's Rules of Procedure for Proceedings Related to Professional Conduct. Mr. Brooks failed to submit information requested relating to professional conduct and activities.
Brooks, Gordon D. (US)

On 30 January 2017, CFA Institute imposed a Summary Suspension on Gordon D. Brooks (Cathedral City, California), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 27 February 2017.

Brooks was summarily suspended for his failure to cooperate with a Professional Conduct investigation regarding the suitability of investments sold to a former client. Because he failed to cooperate, Professional Conduct was unable to determine whether Brooks violated the CFA Institute Code of Ethics and Standards of Professional Conduct.

Burger, Joshua David (U.S.)
On 15 April 2013, CFA Institute imposed a Summary Suspension on Joshua David Burger (U.S.), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the Summary Suspension became a Revocation on 13 June 2013.

On 6 September 2012, Burger pleaded guilty to first-degree indecent exposure, a felony. On 7 December 2012, Burger was sentenced to eight years in prison, with six years suspended, and ten years of probation. Under Rule 10.1 of the CFA Institute Rules of Procedure for Professional Conduct [2010], conviction of a crime defined as a felony or punishable by imprisonment of one year or more is grounds for Summary Suspension.
Carnes, Glen William (U.S.)
On 1 October 2013, CFA Institute imposed a Summary Suspension on Glen William Carnes (U.S.), an affiliate member, automatically suspending his membership. Because he did not request a review, the Summary Suspension became a Revocation on 31 October 2013.

In May 2013, FINRA permanently barred Carnes from association with any FINRA member in any capacity. FINRA found that Carnes violated FINRA Rules 3270 and 2010 by participating in an unapproved private securities transaction in violation of his former firm’s policy. FINRA also found that Carnes violated FINRA Rules 8020 and 2010 by providing a false and misleading response to an inquiry from FINRA regarding the Form U5 his former firm filed reporting the matter.

Chasan, Michael (US)

 On 9 November 2017, Michael Chasan (Weston, Massachusetts), a charterholder member, Permanently Resigned his membership in CFA Institute and in any member societies and his right to use the CFA designation in the course of a disciplinary proceeding brought by Professional Conduct. 

The investigation arose because, in October 2015, Chasan agreed with the Securities Division of the Commonwealth of Massachusetts to a Consent Order making findings that, from 2005 to 2015, he violated state law by: failing to register as an investment adviser and investment adviser representative; failing to have proper written agreements with clients; and failing to document, or maintain a process to verify, whether clients were “qualified clients” before charging them a performance fee. 

Under the Consent Order, Chasan agreed: to register; to pay a fine of $300,000, plus $3,500 in unpaid registration fees; to offer rescission of more than $1.2 million in asset management and performance fees paid by his advisory clients; and to hire an independent consultant. In addition, his sole proprietorship was permitted to and did become registered in Massachusetts as an investment adviser under its current name, Chasan Capital Management.

Chasan accepted referrals from friends and began to advise and manage investments for others, through their retail accounts at Fidelity. Clients granted him discretionary trading authority, which he then used to make stock purchases and sales in their accounts. By 2015, Chasan managed the accounts of 22 people with total assets of over $9 million. Chasan charged his clients a fee of 1% of their assets under management, plus a performance fee that varied from 15% to 20%.

Among other things, the investigation concerned allegations about:  the receipt of illegal compensation from individuals who were not eligible to pay performance fees; and the making of trades in clients’ accounts without knowing or considering the clients’ overall financial circumstances, investment objectives, and risk tolerances. 

Chen, Ruopian (U.S.)

On 12 February 2008, CFA Institute imposed a Summary Suspension against Ruopian Chen, pursuant to Article 11.3(c) of the CFA Institute Bylaws and Rule 7.3 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Summary Suspension automatically suspends Mr. Chen’s CFA Institute membership and right to use the CFA designation. Mr. Chen pleaded guilty in the United States District Court (Southern District of New York) to one count of conspiracy to commit securities fraud and three counts of insider trading, which are felonies.

Chiang, Jeffrey (U.S.)

On 14 May 2010, CFA Institute imposed a Summary Suspension on Jeffrey Chiang (U.S.), pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Summary Suspension automatically suspends Chiang’s participation in the CFA Program. Chiang failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct.

Chin, Edwin K. (US)

On 30 August 2016, CFA Institute imposed a Summary Suspension on Edwin K. Chin (New York), a lapsed charterholder member, automatically suspending his right to reactivate his membership and use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 28 September 2016.  

On 16 August 2016, the U.S. Securities and Exchange Commission announced that it had barred Chin from the securities industry for misleading customers and causing them to pay higher prices for residential mortgage-backed securities (RMBS) from 2010 to 2012. The SEC stated that it found that Chin generated extra revenue for his firm by concealing the prices at which the firm had purchased RMBS and then reselling the RMBS at higher prices and keeping the difference. The SEC also stated that on some occasions Chin mislead buyers by suggesting to them that he was negotiating a transaction when he was actually just selling from his firm’s inventory.

Chitnis, Jay, K. (US)

On 25 July 2016, CFA Institute imposed a Summary Suspension on Jay K. Chitnis (Atlanta, Georgia), a charterholder member, automatically suspending his membership and right to use the CFA designation. The Summary Suspension was imposed because Chitnis failed to cooperate with a Professional Conduct investigation of a complaint filed against him by the Financial Industry Regulatory Authority (FINRA). Because he did not request a review, the Summary Suspension became a Revocation on 22 August 2016.

FINRA has alleged that between November 2014 and September 2015, Chitnis engaged in a fraudulent and deceptive trading scheme and illegally obtained $680,000 from his clearing firm. He then used the money to keep his firm, YieldQuest Securities, afloat and support his own lifestyle. Chitnis’s failure to cooperate prevented Professional Conduct from investigating to determine whether these allegations were true. 

Chui, Benjamin (U.S.)

On 25 March 2011, CFA Institute imposed a Summary Suspension on Benjamin Chui (U.S.), automatically suspending both his membership and right to use the CFA designation. This action resulted from an order issued by the U.S. SEC on 21 December 2010 barring him from association with any investment adviser and with the right to reapply after five years. The SEC determined that Chui, the former CEO of two registered investment advisers – American Pegasus and American Pegasus Investment Management – engaged in improper self-dealing, misused client assets, and failed to disclose conflicts of interest.

Without notifying investors, Chui used more than US$18 million in loans and advances from his American Pegasus Auto Loan Fund to acquire the fund’s sole supplier of subprime auto loans. According to the SEC, this created a “pervasive conflict of interest” as Chui had a duty to maximize the fund’s performance while at the same time generating profits for the loan supplier he secretly owned. The SEC also determined that Chui borrowed millions of dollars from the Auto Loan Fund to support other funds he managed. At one point, 40 percent of the Auto Loan Fund’s assets consisted of loans to Chui-related businesses – with fund investors being charged fees based on these undisclosed related-party transactions.

Chumbler, Joseph, Blair (US)

On 20 January 2017, CFA Institute imposed a Summary Suspension on Joseph Blair Chumbler (Cave Springs, Arkansas), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the suspension became a Revocation on 18 February 2017.  

On 15 December 2016, Chumbler pleaded guilty in the Circuit Court for the County of Benton, Arkansas, to 10 felony counts of distributing, possessing, or viewing images depicting sexually-explicit conduct involving a child. Chumbler was sentenced to twenty years in prison and he must abide by a suspended sentence agreement for 7 years following his release.

Cooper, Carla (U.S.)

On 16 November 2011, CFA Institute imposed a Summary Suspension on Carla Cooper (U.S.), a charterholder member, automatically suspending her CFA Institute membership and right to use the CFA designation. Because there was no request for review, on 16 December 2011, the summary suspension automatically became a permanent revocation.

On 25 April 2011, the Financial Industry Regulatory Authority (FINRA) permanently barred Cooper from association with any member firm in any capacity. According to FINRA, Cooper forged a letter of authorization and then used the letter to transfer securities worth approximately US$20,000 from one client account to another without permission.

Cooper, Michael R. (Canada)
Effective 19 October 2014, CFA Institute imposed a Five-Year Suspension of membership and the right to use the CFA designation upon Michael R. Cooper (Canada), a charterholder member. A Hearing Panel found that Cooper violated Standards I(B) - Independence and Objectivity, I(C) – Misrepresentation, III(D) - Performance Presentation, and VI(A) - Disclosure of Conflicts of the CFA Institute Code of Ethics and Standards of Professional Conduct (2010).

Cooper was the owner of Cooper Financial Research (a.k.a. CR Financial Research, Inc.), which prepared and published research reports on the Internet (at “CFMonitor.com”). Three small gold mining companies paid Cooper and his firm to prepare and publish favorable research reports and YouTube videos about them on the Internet.

Cooper secretly entered into written agreements with two of the companies that required that he compromise his independence and objectivity by promising to use his best efforts to serve and promote the companies’ interests whenever he wrote about them. One of the two companies explicitly required that Cooper obtain its advance approval of anything he might want to publish about it. In exchange for his flattering research coverage, the companies each compensated Cooper with $5,000 monthly payments and undisclosed stock options, which represented a direct stake in his ongoing ability to successfully promote them. Cooper had a similar, oral agreement with the third company, which also paid him $5,000 per month (but no options) as compensation for his research reports and videos, which were always highly favorable.

The Hearing Panel found that Cooper did not disclose to potential investors: that he had entered into these promotional agreements with the three companies; that his compensation was contingent on promoting their interests; or the amounts the companies paid him for his positive research coverage. Cooper’s repeated failures to disclose these conflicts of interests were egregious. Only after receiving the Professional Conduct Program’s Statement of Allegations outlining his apparent violations of the CFA Institute Standards, did Cooper finally begin to disclose his contractual obligations to favorably promote the three companies. But even then, he continued to fail to disclose the volumes, exercise prices, and expiration dates of the stock options he received as payment.

Finally, Cooper failed to make reasonable efforts to ensure that a video presentation he placed on YouTube touting his investment performance on behalf of investors was fair, accurate, and complete; and he made misleading statements in two videos suggesting to investors that he had a staff of CFA charterholders who assisted him in preparing his reports. Although Cooper had at times employed several different people to help him prepare his research reports and videos, he was the only person at the firm who was ever a CFA charterholder.

Cooper’s Five-Year Suspension of CFA Institute membership and the right to use the CFA designation expires 19 October 2019.
Daifotis, Kimon Peter (U.S.)

On 5 December 2012, the CFA Institute Designated Officer imposed a Summary Suspension on Kimon Peter Daifotis (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review within the time provided under the Rules of Procedure, the Summary Suspension automatically became a Revocation on 4 January 2013.

On 17 July 2012, the U.S. Securities and Exchange Commission barred Daifotis from association with any broker, dealer, investment advisor, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. He was also barred from participating in any offering of a penny stock, including acting as a promoter, finder, consultant, agent, or other person who engages in activities with a broker, dealer, or issuer for purposes of the issuance or trading in any penny stock or inducing or attempting to induce the purchase or sale of any penny stock. Daifotis has the right to apply for reentry after three years.

According to the SEC, Daifotis misled or failed to adequately inform investors about the risks of investing in the Schwab YieldPlus Fund. The SEC determined that Daifotis misled investors by representing the YieldPlus Fund as being only slightly riskier than a money market fund and falsely claiming that the YieldPlus Fund primarily held very short-maturity bonds.

Daniel, Gerard (UK/Canada)

On 9 October 2012, the CFA Institute Designated Officer imposed a Summary Suspension on Gerard Daniel (United Kingdom/Canada) for failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because Daniel did not request a review within the time provided under the Rules of Procedure, the Summary Suspension automatically became Prohibition from Participation in the CFA Program on 9 November 2012.

Davis, Warren A. (Bahamas)

On 6 March 2017, CFA Institute imposed a Summary Suspension on Warren A. Davis (Nassau, Bahamas), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because Davis did not request a review, the summary suspension became a Revocation on 5 April 2017. 

Davis was the president and sole shareholder of Gibraltar Global Securities, Inc., a broker-dealer in the Bahamas. In a 2015 and 2017, the United States District Court for the Southern District of New York issued default judgments against Davis and Gibraltar in two separate cases brought by the United States Securities and Exchange Commission. The lawsuits alleged that Davis and Gibraltar operated unlawfully in the United States and made misrepresentations in order to facilitate the illegal distribution of securities. The court, finding Davis and Gibraltar in default for refusing to provide relevant discovery material as required by law, held that they were liable for a total of more than $24 million in disgorgement of unlawful profits, $2.7 million in prejudgment interest, and approximately $4 million in fines. Neither Davis nor Gibraltar has satisfied these outstanding judgments. 

In December 2016, Professional Conduct requested that Davis provide certain documents and information relating to the two SEC matters, but Davis did not respond. As a result of his non-cooperation, Professional Conduct was unable to determine whether he violated the CFA Institute Code and Standards. 

de Marigny, Peter John (U.S.)

On 18 February 2011, CFA Institute imposed a Summary Suspension on Peter John de Marigny (U.S.), a Level II Candidate and a regular member of CFA Institute, which automatically suspended his participation in the CFA Program and membership in the organization. De Marigny subsequently requested a review of his suspension pursuant to Rule 10.3 of the Rules of Procedure. On 4 May 2011, the sanction was reviewed and affirmed by a Hearing Panel. As a result, de Marigny is prohibited from participating in the CFA Program or being a member of CFA Institute.

The Hearing Panel confirmed that on 1 October 2010, the securities division of the Office of the Secretary for the State of Nevada permanently barred de Marigny from any and all associations or employment with any broker/dealer, investment adviser, or issuer. The securities division found that starting in 2004, de Marigny, a sales representative and investment adviser representative at Citigroup Global Markets, and later at UBS Financial Services, facilitated unlawful withdrawals by Southwest Exchange (SWEX) from escrow accounts for which he was the account manager.

SWEX operated as an “exchange intermediary” pursuant to Section 1031 of the U.S. Internal Revenue Code, which allows buyers, under carefully regulated circumstances, to sell real estate and then buy a new property without paying capital gains taxes on the sale. De Marigny assisted SWEX in unlawfully placing millions of dollars of exchanger funds with third parties without their consent. According to the division’s consent order, “De Marigny even went so far as creating his own account statements for SWEX on Citigroup letterhead in violation of firm policy.” As payment for his assistance, de Marigny and his wife were flown to the Bahamas in a private jet, and he received a US$150,000 check made payable to his wife to disguise its true purpose. As a result of the unauthorized withdrawals by SWEX facilitated by de Marigny, the intermediary was later left without sufficient funds to complete Section 1031 exchanges, and many of its clients lost funds that were supposed to have been held for them in escrow.
Diedrich, John (U.S.)

On 11 March 2010, CFA Institute imposed a Summary Suspension against John Diedrich (U.S.), a candidate in the CFA Program, pursuant to Article 11.3(c) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure. Diedrich pleaded guilty in the Circuit Court of the Sixth Judicial Circuit, Champaign County, Illinois, to the offense of unlawful possession with the intent to deliver cannabis.

Downen, Glenn H. (U.S.)

On November 6, 2003, AIMR imposed the sanction of Prohibition from Participation in the CFA Program upon Glenn H. Downen, pursuant to a Stipulation and Offer of Consent for Disciplinary Action.

AIMR found that Downen violated the AIMR Code of Ethics and Standards of Professional Conduct, Standard II(B) – Professional Misconduct and Standard IV(B.6) – Prohibition against Misrepresentation [1999].

Downen enrolled to take the 2002 Level II CFA examination. Although he was enrolled for the 2002 exam, Downen failed to take the exam – he was a “no show.” Although he did not take the Level II exam, Downen created a document, purportedly from AIMR, that represented he passed the 2002 Level II CFA exam. Downen presented this document to his supervisor and also verbally represented to his supervisor that he passed the Level II CFA exam. Downen received a compensation increase for “passing” Level II of the exam. Downen’s employer subsequently investigated the matter and his employment was terminated.

Downen has consented to this sanction and the publication of this notice.

Erb, John R. (US)

Effective 22 June 2017, CFA Institute imposed a Revocation of membership and of the right to use the CFA designation on John R. Erb (Steamboat Springs, Colorado), a charterholder member. This sanction was based on a hearing panel’s determination that, at various times from 1992 until 2011, Erb violated the CFA Institute Code of Ethics and Standards of Professional Conduct prohibiting misrepresentation, misconduct, violation of fiduciary duty, and failure to know and comply with the law.                                                                                                                           
During the relevant period, Erb operated a one-person advisory firm called De Teffé Capital Management, in Alexandria, Virginia. From 1992 to 2010, he and his firm acted as both trustee and investment advisor to two irrevocable trusts established for a wealthy family. In 2010, the family became concerned about Erb’s conduct and, after consulting an attorney, he was asked to resign.              

Erb then sued the successor trustees for allegedly unpaid deferred trustee and investment advisor fees of more than $1.4 million. The successor trustees then countersued Erb for $17 million, alleging breach of contract, breach of fiduciary duty, and fraud. After the successor trustees’ counterclaims against him had been pending for four months, Erb filed a Professional Conduct Statement with CFA Institute in which he did not disclose and misrepresented that he was not the subject of any litigation concerning his professional conduct.

After a six-day trial, a jury concluded that Erb had no valid claim for unpaid deferred fees and agreed with the successor trustees that he had violated his contract, breached his fiduciary duties, and defrauded the trusts. As a result, the jury awarded them $3 million in compensatory damages and $10 million in punitive damages. The judge later disallowed the award of punitive damages and reduced the amount of the compensatory damages to $1.5 million. The Virginia Supreme Court subsequently considered and denied Erb’s appeal.   

The CFA Institute hearing panel found that Erb: failed to register himself and De Teffé as investment advisors as required by Virginia law, thus avoiding any regulatory review or supervision of his actions as an investment advisor; intentionally chose not to file State trust tax returns as required by law because doing so would cause the trusts to pay taxes; intentionally caused the filing of false federal income tax returns by deducting from trust income investment advisor and trustee fees that were never paid, thus avoiding the payment of taxes; billed the grantors and trusts for outside legal and accounting expenses in amounts that greatly exceeded the actual charges incurred; and filed a Professional Conduct Statement that failed to disclose and misrepresented that he was not the subject of litigation concerning his professional conduct.

Ezzeldin, Maged (United Kingdom)

On 2 March 2011, the CFA Institute Designated Officer imposed the sanction of Summary Suspension on Maged Ezzeldin (United Kingdom). Ezzeldin was suspended for his failure to cooperate with a Professional Conduct Program investigation. Because he did not request a review within the time provided under the Rules of Procedure, the summary suspension automatically became a permanent prohibition.

Fevola, Simone O. (U.S.)

On 3 November 2011, the CFA Institute Designated Officer imposed a Summary Suspension on Simone O. Fevola (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. Fevola subsequently requested a review of his summary suspension, as provided under Rule 10.3 of the Rules of Procedure (2010). A Summary Suspension Hearing Panel convened, and a hearing was conducted by conference call on 30 March 2012. Fevola did not submit a pre-hearing brief or exhibits, and he did not call in to participate in the hearing. Nevertheless, the Hearing Panel reviewed the matter and affirmed the Designated Officer’s decision.

Specifically, the Hearing Panel found that on 12 March 2010, the U.S. SEC concluded that Fevola, while president and chief investment officer of Wealth Management, improperly accepted US$1.24 million in undisclosed kickbacks from certain investments made by four of the six unregistered funds the investment advisor managed, while continuing to cause clients to invest in those funds even though he knew the investments were clearly unsuitable. The SEC also found that Fevola breached his fiduciary duty and made fraudulent representations to clients regarding the safety and stability of the two largest funds managed by Wealth Management. As a result, the SEC entered an order indefinitely barring Fevola from association with any investment advisor, with an opportunity to reapply after three years. In a related civil action, the U.S. District Court for the Eastern District of Wisconsin permanently enjoined Fevola from committing further violations and ordered him to disgorge his ill-gotten gains.

Folin, O. Sam (U.S.)

On 3 August 2011, CFA Institute imposed a Summary Suspension on O. Sam Folin (U.S.), a charterholder member, automatically suspending his CFA Institute membership and right to use the CFA designation. Folin was suspended after the U.S. SEC permanently barred him from association with any broker, dealer, or investment adviser on 29 July 2011.

The SEC found that Folin misappropriated approximately US$8.7 million from advisory clients, friends, and family through material misrepresentations and omissions. According to the SEC, Folin offered and sold securities promising investors that their funds would be invested in "socially responsible" companies, but he then diverted a portion of the investors' funds to pay previous investors, the expenses of his affiliated companies, and his own salary. In addition to the permanent bar, Folin was ordered to disgorge more than US$10 million in ill-gotten gains and to pay a civil penalty of US$150,000.

Ge, Yimin (US)

On 9 February 2015, CFA Institute imposed a Summary Suspension on Yimin Ge (US), a lapsed charterholder member, automatically suspending her membership and right to use the CFA designation.  Because she did not request a review, the summary suspension became a Revocation on 20 March 2015.  

On 27 October 2014, the Financial Industry Regulatory Authority (FINRA) barred Ge from association with any FINRA member in any capacity.  FINRA determined that between 2011 and 2013, Ge entered into an agreement with counterparties at other financial institutions to engage in pre-arranged trading. These pre-arranged transactions artificially influenced the natural forces of supply and demand in the market for the relevant securities.

Gordon, Andrew S. (U.S.)

On 19 October 2015, CFA Institute imposed a Summary Suspension on Andrew S. Gordon (US), a charterholder member, automatically suspending his membership and right to use the CFA designation. The suspension was affirmed by a Summary Suspension Hearing Panel and became a Revocation on 16 February 2016.

On 27 May 2015, Gordon pleaded guilty to several charges in the Middlesex Superior Court in Woburn, Massachusetts. The most serious of these crimes related to his attempt to hire a “hit man” or contract killer – who turned out to be an undercover state trooper – to murder or maim his estranged wife so that she could not attend an upcoming hearing in family court. As a result, Gordon was sentenced to 3 to 5 years in prison, followed by 3 years of probation, and barred permanently by a regulator. 

Gordon is also the subject of federal criminal charges relating to his attempt, while being held without bail, to hire a gang member to kill the state trooper who had earlier posed as the “hit man”, and the friend who had revealed Gordon’s intentions to the police. In addition, on 23 July 2015, Gordon was permanently barred by the Financial Industry Regulatory Authority (FINRA) as a result of his failure to produce requested information.

Goyal, Sandeep (U.S.)

On 27 March 2012, the CFA Institute Designated Officer imposed a Summary Suspension on Sandeep Goyal (U.S.). Goyal is a covered person as defined by the CFA Institute Bylaws. Because Goyal did not request a review withing the time provided under the Rules of Procedure, the Summary Suspension automatically became a Permanent Prohibition on 25 May 2012.

On 18 January 2012, the U.S. Attorney’s Office for the Southern District of New York announced the unsealing of a guilty plea entered in November 2011 by Goyal, an investment analyst at the New York City-based mutual fund firm Neuberger Berman, to criminal charges that he conspired with others to engage in insider trading. According to the government, Goyal knowingly participated in a scheme with several research analysts and portfolio managers at three different hedge funds to share material, non-public information about Dell, where he had worked previously.

According to authorities, Goyal received advance information about Dell’s disappointing first- and second-quarter 2008 earnings from a source inside the company’s investor relations department. Goyal then shared that inside information with a research analyst friend with whom he had worked earlier in his career. That analyst then tipped off several others, who passed the misappropriated confidential information to the portfolio managers for whom they worked. Based largely on this inside information, confirmed again by Goyal, the three hedge funds shorted Dell in advance of the company’s earnings announcements, and together they netted illegal profits totaling approximately US$62 million. For his role in the fraudulent scheme, Goyal was paid US$175,000 in soft dollars via a sham research consulting arrangement. Goyal faces a statutory maximum sentence of 25 years in prison, but he cooperated in the government’s ongoing investigation.

Graffart, Philippe M.G. (Singapore)

On 10 August 2016, CFA Institute imposed a Summary Suspension on Philippe M.G. Graffart (Singapore), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 8 September 2016.  

On 1 August 2016, The High Court of Singapore accepted Graffart’s guilty plea to charges of culpable homicide not amounting to murder. In October 2015, he suffocated his five-year-old son during a child custody battle. On 22 August 2016, Graffart was sentenced to five years in prison after psychiatric findings showed he had “diminished responsibility.”

Gustafsson, Nicklas Keith (Sweden)

On 22 September 2009, a Hearing Panel convened and found that Nicklas Keith Gustafsson, a charterholder member, violated the CFA Institute Code of Ethics and Standard VII(A) – Conduct as Members and Candidates in the CFA Program of the CFA Institute Standards of Professional Conduct [2005]. The Hearing Panel imposed the sanction of Revocation of membership and the right to use the CFA designation.

Based on the member’s self-disclosure of a matter, the CFA Institute Professional Conduct Program sent Gustafsson a Notice of Inquiry in December 2006. Gustafsson submitted a response to the Notice of Inquiry that contained content considered to be highly unprofessional and disrespectful, and included graphic, inappropriate images. On Gustafsson’s website, where he provided a link to CFA Institute web pages and used the CFA designation, the CFA Institute Professional Conduct Program also found pornographic images. Additionally, the CFA Institute Professional Conduct Program found unprofessional commentary on internet pornographic chat sites, apparently posted by Mr. Gustafsson, where his name included the CFA designation. Gustafsson also failed to fully cooperate with the Professional Conduct Program inquiry, testify, and otherwise cooperate in the disciplinary proceedings.

CFA Institute convened a Hearing Panel. After consideration of the evidence, the Hearing Panel found that the member’s conduct was unprofessional, disrespectful, and contrary to the integrity required of CFA Institute charterholders, and compromised the reputation and integrity of CFA Institute and the CFA designation.

Hamdi, Ahmed (Spain)

On 1 April 2010, CFA Institute imposed a Summary Suspension on Ahmed Hamdi (Spain), a former charterholder member, pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure. Hamdi failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct.

Hannon, Sean Kenneth (U.S.)
On 1 October 2013, CFA Institute imposed a Summary Suspension on Sean Kenneth Hannon (U.S.), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Hannon was suspended for his failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because he did not request a review, the Summary Suspension became a Revocation on 31 October 2013.
Hanrahan, Mark A. (US)

On 3 June 2016, CFA Institute imposed a Summary Suspension on Mark A. Hanrahan (US), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 1 July 2016.

In January 2015, Hanrahan was arrested and charged with second-degree kidnapping, after ordering a person to get into his car at gunpoint. According to police, Hanrahan then demanded that the victim help him find cocaine. On 14 May 2015, Hanrahan pleaded guilty to two lesser charges of solicitation to commit a felony (a Class “D” felony under Iowa law) and carrying a firearm while intoxicated.

Hinch, Stephen (Thailand)
On 15 September 2014, CFA Institute imposed a Summary Suspension on Stephen Hinch (Thailand), a member, automatically suspending his membership. Hinch was suspended for his failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because he did not request a review, the Summary Suspension became a Revocation on 16 October 2014.
Hoi Yan, Yiu (Hong Kong)

On 21 February 2012, CFA Institute imposed a Summary Suspension on Yiu Hoi Yan (Hong Kong). Hoi Yan was suspended for her failure to cooperate with a Professional Conduct Program investigation. Because she did not request a review within the time provided under the Rules of Procedure, the summary suspension automatically became a permanent prohibition.

Holmes, Richard, B. (US)
Effective 23 August 2016, Richard B. Holmes (Reading, Massachusetts), an affiliate member, Permanently Resigned his membership in CFA Institute and any member societies in the course of a Professional Conduct investigation to determine whether he was properly registered in Massachusetts to trade on behalf of clients.
Horvath, Jon P. (U.S.)

On 10 October 2012, the CFA Institute Designated Officer imposed a Summary Suspension on Jon P. Horvath (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review within the time provided under the Rules of Procedure, the Summary Suspension automatically became a Revocation on 9 November 2012.

On 28 September 2012, the U.S. Attorney for the Southern District of New York announced that Horvath, a former technology industry research analyst at SAC Capital Advisors, had entered a guilty plea in federal district court in Manhattan to criminal charges that he conspired with others to engage in insider trading. The alleged scheme involved several research analysts and portfolio managers at different hedge funds who, from 2007 to 2009, exchanged material nonpublic information about publicly traded technology companies, including Dell and NVIDIA.

According to the charges, Horvath was part of a circle of research analysts who obtained inside information, both directly and indirectly, from employees who worked at public companies. The analysts then shared the inside information with each other and with the portfolio managers for whom they worked. For example, Horvath admitted receiving inside information concerning Dell and NVIDIA from other members of this circle of analysts, knowing that it came from employees in breach of their duties of loyalty to their companies. He then provided the inside information to the portfolio manager for whom he worked and caused trades in Dell and NVIDIA to be executed based on the inside information he received from the circle of analysts. In exchange, Horvath provided the circle of analysts with inside information concerning other technology stocks that he obtained directly from public company employees. Horvath faces a potential statutory maximum sentence of 45 years in prison, but he has been cooperating in the government’s ongoing investigation.

Hsu, Albert W. (U.S.)
On 16 April 2009, CFA Institute imposed a Summary Suspension against Albert Hsu, pursuant to Article 11.3(c) of the CFA Institute Bylaws and Rule 7.3 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Summary Suspension automatically suspends Hsu’s membership and right to use the CFA designation. Hsu pleaded guilty in Connecticut Superior Court to one count of attempted kidnapping and one count of trafficking in personal identification information, both which are felonies.
Huang, Sheila, Xiaotao (US)

On 29 January 2016, CFA Institute imposed a Summary Suspension on Sheila Xiaotao Huang (US), a lapsed charterholder member, automatically suspending her membership and right to use the CFA designation. A hearing panel affirmed the summary suspension, which then automatically became a Revocation on 14 July 2016.

On 22 December 2015, the U.S. Securities and Exchange Commission barred Huang from the securities business, with the right to reapply after five years. The SEC determined that in late 2011 and early 2012, Huang, then a Managing Director, trader, and portfolio manager at Morgan Stanley Investment Management Inc., entered into an agreement with a counterparty at another firm to engage in a series of six unlawful prearranged sales and “buybacks” of fixed-income securities at predetermined prices, which secretly favored certain advisory clients over others, in violation of the firm’s fiduciary duties to those clients. By cross-trading between advisory accounts and “parking” securities in this manner, the SEC found that Huang evaded her firm’s internal cross trade requirements and procedures, and willfully violated the anti-fraud provisions of the federal securities laws. In addition to the bar, Huang was ordered to pay a fine of USD$125,000.

Hung, Alfred, C.T. (Hong Kong)

On 28 September 2017, CFA Institute imposed a Summary Suspension on Alfred C.T. Hung (Hong Kong), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the Summary Suspension became a Revocation on 26 October 2017.

From 1997 until 2012, Hung was employed by the Sino-Forest Corporation, a Canadian company.  In August 2011, the Ontario Securities Commission (OSC) suspended trading of the shares of Sino-Forest, stating that the company had engaged in practices they “knew or should have known perpetuated a fraud.” That same month, the OSC filed a lawsuit in Toronto against Sino-Forest and its five senior executives, including Hung. In March 2012, Sino-Forest filed for bankruptcy protection.

The OSC trial started in 2015, and in July 2017, the Hearing Panel rendered their Decision, finding that: 1) As an officer of Sino-Forest, Hung permitted Sino-Forest to make materially misleading or untrue statements with respect to ownership of assets, revenue recognition, and internal controls, contrary to subsection 122(1)(b) of the Securities Act; 2) Hung engaged in deceitful or dishonest conduct related to Sino-Forest’s standing timber assets and revenue that he knew constituted fraud, contrary to subsection 126.1(b) of the Securities Act; and 3) Hung misled OSC staff during its investigation, contrary to subsection 122(1)(a).

Subsections 122(1)(a) and (b) state that a person who makes a materially misleading or untrue statement in information submitted to the OSC or in any required document filed under the securities laws is guilty of an offence and on conviction is liable to a fine of not more than $5 million or to imprisonment for a term of not more than five years less a day, or to both. Hung was summarily suspended because he was convicted of a crime punishable by more than one year in prison. His conviction is currently on appeal.

Jang, Yoosun (Republic of Korea)

On 1 April 2010, CFA Institute imposed a Summary Suspension on Yoosun Jang (Republic of Korea), pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Jang failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of her conduct.

Johnson, John Victor (U.S.)

On 30 April 2013, CFA Institute imposed a Summary Suspension on John Victor Johnson (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. The sanction was reviewed and affirmed by a Summary Suspension Hearing Panel on 7 August 2013. Thus, the Summary Suspension became a Revocation on 28 August 2013.

On 26 March 2013, the U.S. Attorney in Manhattan announced that Johnson pleaded guilty to one count of conspiracy to commit securities fraud and one substantive count of securities fraud, both of which are felonies. Johnson was alleged to have traded on material nonpublic information that he received from an acquaintance who worked as an analyst for an investment advisory firm to a family of hedge funds. The inside information concerned the impending acquisition of Foundry Networks by Brocade Communications Systems, another technology company, in 2008. According to the prosecutors, Johnson traded illegally on the basis of this advance information and made a profit of more than US$136,000.

 

 

Johnson, Michael R. (US)

On 23 January 2017, CFA Institute imposed a Summary Suspension on Michael R. Johnson (Berwyn, Pennsylvania), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 21 February 2017.  

On 2 November 2016, Johnson was permanently barred by the Financial Industry Regulatory Authority as a result of purchasing securities while in possession of material nonpublic information. FINRA determined that between October and November 2015, Johnson purchased 2,087 shares of a Company (not identified by FINRA) in six accounts under his trading authority, including individual accounts and those of his family, at prices between $94.95 and $97.45 per share. Johnson purchased these shares while in possession of material nonpublic information that he had improperly obtained from an employee of the Company regarding its impending acquisition by another company. When the acquisition was publicly announced, the Company’s share price increased approximately 29% over the previous day’s closing price.  

Johnson, Paul E. (U.S.)

On 4 March 2008, CFA Institute imposed the sanction of Revocation of CFA Institute Membership and Membership in Member Societies and Revocation of the Right to Use the CFA Designation upon Paul E. Johnson (“Johnson” or “Member”), pursuant to a Stipulation and Consent to Disciplinary Action.

CFA Institute found that Johnson violated the CFA Institute Code of Ethics and Standard I(A) – Fundamental Responsibilities, Standard II(B) – Professional Misconduct, Standard III(C) – Disclosure of Conflicts to Employer, Standard IV(A.1) – Reasonable Basis and Representations, Standard IV(A.3) – Independence and Objectivity, Standard IV(B.3) – Fair Dealing, Standard IV(B.4) – Priority of Transactions, and Standard IV(B.7) – Disclosure of Conflicts of CFA Institute Standards of Professional Conduct [1999].

Johnson, while employed as a managing director and senior research analyst, made private investments in two companies that were later involved in separate mergers with two publicly traded companies for which Johnson provided research report coverage. Johnson praised the mergers in his research reports and in other public comments; however, the research reports did not specifically disclose Johnson’s personal interests in the private companies. Similarly, in two media appearances, Johnson also did not disclose his personal interests.

In a separate matter, in November 1999, Johnson, personally and as part of his firm’s investment group, made personal investments in a third company. The company went public in July 2000, and Johnson began issuing research reports on the company in August 2000, rating it a “buy.”  The research reports did not disclose Johnson’s personal interests in the company. In January 2001, Johnson – according to a member of his firm’s investment committee – told the committee that the stock was a good buy at approximately half the price of the then market value. The following day, Johnson sold approximately 75% of his personal holdings in the stock. Johnson’s subsequent research report on the company did not specifically disclose his personal interests in the company or his sale of stock in the company. Three days after the research report was issued, Johnson sold additional personal shares of the stock.

In one of the instances above, Johnson did not disclose his personal ownership to his employer, in contravention of his employer’s compliance policies and Standard III(C) - Disclosure of Conflicts to Employer. Pursuant to Standard III(C), the Member was required to disclose to his employer all matters, including beneficial ownership of securities or other investments that reasonably could be expected to interfere with his ability to make unbiased and objective recommendations.

Johnson has consented to the sanction described above and to the publication of this notice.

Kailas, Duane, Karthic (Canada)

Effective 15 March 2016, CFA Institute imposed a Five-Year Suspension from Participation in the CFA Program on a Candidate who violated the Code of Ethics and Standard of Professional Conduct I(C) – Misrepresentation (2014).

In February 2015, the candidate submitted a stock presentation that he claimed to have created, as part of his application for a summer internship at a private investment firm. The prospective employer determined that the candidate had not authored the presentation and questioned him about it. In his subsequent communications with the prospective employer, authorities at the university where he is a student, and with Professional Conduct, the candidate admitted his plagiarism. Specifically, the candidate acknowledged that he had found the stock presentation online and replaced the names of its authors with his own in order to enhance his employment prospects.

Katz, Jason A. (US)

On 3 August 2017, CFA Institute imposed a Summary Suspension on Jason Alan Katz (Estero, Florida), a lapsed charterholder member, automatically suspending his right to reactivate his membership and use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 1 September 2017.  

On 19 December 2016, Katz, a former trader at Standard Bank, Barclays PLC, BNP Paribas and Australia & New Zealand Banking Group Ltd. pleaded guilty to felony criminal charges related to violations of Section One of the Sherman Antitrust Act in the United States Court for the Southern District of New York. The charges stemmed from Katz’s involvement in an alleged conspiracy to suppress and eliminate competition by fixing prices for Central and Eastern European, Middle Eastern, and African Emerging Market currencies from January 2007 until July 2013.

Keller, Christian B. (US)

On 29 June 2016, CFA Institute imposed a Summary Suspension on Christian B. Keller (US), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension automatically became a Revocation on 28 July 2016.  

On 10 November 2015, the U.S. Attorney’s Office for the Northern District of California announced that Keller had pled guilty and admitted that from 2009 until 2012 he and a friend had led an insider trading scheme in which they secretly traded on confidential merger and earnings information obtained from Keller’s employers. Conspiring with his friend, Keller arranged to use a brokerage account held in the name of a third participant in the scheme in order to keep his employers unaware of the illegal trading.

More specifically, beginning in 2009, Keller, who was a financial analyst at Applied Materials, Inc. (“Applied Materials”), used confidential information with which his employer had entrusted him to trade options in advance of Applied Materials’ acquisitions of Semitool, Inc. in 2009 and Varian Semiconductor Equipment Associates, Inc. in 2011. In 2012, after Keller became the vice president for investor relations and finance at Rovi Corporation (“Rovi”), he and his friend used material, nonpublic information that Keller learned as a company insider to trade Rovi securities ahead of its public announcements of its first and second quarter 2012 financial results. To avoid detection, Keller and his friend used disposable prepaid mobile phones to discuss the trades, and Keller’s friend made structured cash withdrawals to kick back profits to Keller. In total, the scheme reaped illegal profits totaling approximately $743,000.

Keller pled guilty to two felonies, including securities fraud, which carries a maximum sentence of 20 years in prison and up to $5 million in fines. In July 2016, Keller received a six-month prison sentence, followed by 3 years of supervised release.

Separately, in February 2015, Keller entered into a settlement agreement with the U.S. Securities and Exchange Commission in which he agreed to be permanently enjoined from violating Sections 10(b) and 14(e) of the Exchange Act and barred from serving as an officer or director of a public company for 10 years. Keller also agreed to pay disgorgement of $52,000, prejudgment interest of $4,002 and a fine of $417,468.

 

Kelsoe, James C. (U.S.)

On 18 July 2011, CFA Institute imposed a Summary Suspension on James C. Kelsoe (U.S.), a charterholder member, automatically suspending his CFA Institute membership and his right to use the CFA designation. On 22 June 2011, the U.S. SEC barred Kelsoe from the securities industry as part of an administrative proceeding brought against Kelsoe, Morgan Keegan & Company, Morgan Asset Management (MAM), and another Morgan Keegan employee.

According to the SEC, Kelsoe, the senior portfolio manager of five funds managed by MAM, instructed Morgan Keegan’s accounting department to make arbitrary price adjustments to the fair value of certain portfolio securities. The SEC found that these price adjustments ignored lower values for those same securities provided by outside broker/dealers as part of the pricing process and often lacked a reasonable basis. The SEC also found that Kelsoe screened and influenced the price confirmations obtained from at least one broker/dealer. Specifically, Kelsoe induced the broker/dealer to provide interim price confirmations that were lower than the values at which the funds were valuing certain bonds but higher than the initial confirmations that the broker/dealer had intended to provide. The interim price confirmations enabled the funds to avoid marking down the value of securities to reflect current fair value. On other occasions, Kelsoe induced the broker/dealer to withhold price confirmations when those price confirmations would have been significantly lower than the funds’ current valuations of the relevant bonds.

According to the SEC’s order, Kelsoe’s actions fraudulently prevented a reduction in the net asset values of the funds that would otherwise have occurred as a result of the deterioration in the subprime securities market in 2007. Accordingly, the SEC found that Kelsoe caused and willfully aided and abetted the Morgan Keegan entities’ violations of the Investment Advisers Act of 1940 directly violated several provision of the Investment Company Act of 1940. In addition to agreeing to be barred from the securities industry, Kelsoe agreed to pay US$500,000 in penalties.

Kesner, Gerald J. (U.S.)

On 21 July 2010, CFA Institute imposed a Summary Suspension on Gerald J. Kesner (U.S.), which automatically suspended his CFA Institute membership and right to use the CFA designation. Under CFA Institute Bylaws, a Member who receives a permanent bar, or a bar for an indefinite amount of time, from registration under the securities laws or similar laws related to the investment decision-making process is subject to automatic suspension.

On 15 August 2008, the Financial Industry Regulatory Authority (FINRA) barred Kesner from association with any FINRA member firm in any capacity. FINRA determined that Kesner failed to disclose material information regarding an investment recommendation and that the recommendation was unsuitable. Kesner appealed the decision and on 26 February 2010 the National Adjudicatory Council (NAC) affirmed the decision permanently barring Kesner.
Kim, Eun Jung (Republic of Korea)

On 9 July 2008, CFA Institute imposed a Summary Suspension on Eun Jung Kim from participation in the CFA Program. Ms. Kim failed to cooperate with the Professional Conduct Program in its investigation of her conduct.

Kimelman, Michael (U.S.)

On 15 June 2011, CFA Institute imposed a Summary Suspension on Michael Kimelman (U.S.), a charterholder member, automatically suspending his CFA Institute membership and right to use the CFA designation.

On 13 June 2011, Kimelman was convicted of two counts of securities fraud and one count of conspiracy to commit securities fraud in connection with the Galleon Group insider-trading case.

The charges alleged that Kimelman received material and nonpublic information related to the acquisition of 3Com through a network of paid informants, including attorneys at a prominent New York law firm. Kimelman then earned profits trading on that inside information. Kimelman faces a maximum sentence of 45 years imprisonment on the three counts.

Koch, Donald L. (US)

On 13 May 2016, CFA Institute imposed a Summary Suspension on Donald L. Koch (St. Louis), a regular member, automatically suspending his membership. This suspension was later affirmed by a Summary Suspension Hearing Panel and became a Revocation on 10 October 2016.

Koch was the owner and principal of Koch Asset Management, LLC, an investment adviser. On 16 May 2014, the U.S. Securities and Exchange Commission found that from September through December 2009, Koch violated the antifraud provisions of the federal securities laws by “marking the close” by submitting orders at the end of the trading day with the intent to manipulate the prices of three small, thinly traded, bank stocks. As a result, the SEC permanently barred Koch from associating with, among others, any broker, dealer, or investment adviser, and imposed a $75,000 fine. On 28 March 2016, the United States Supreme Court denied Koch’s request to review the decision of the United States Court of Appeals for the District of Columbia, which had reviewed and upheld the SEC’s bar.

Koval, Aleksey Petrovich (U.S.)

On 25 February 2011, CFA Institute imposed a Summary Suspension on Aleksey Petrovich Koval (U.S.), a charterholder member, which automatically suspended his CFA Institute membership and right to use the CFA designation.

On 7 January 2011, Koval entered 
a guilty plea to one count of conspiracy to commit securities fraud and three counts of securities fraud in connection with an insider-trading scheme. As part of the guilty plea, he admitted to receiving and trading on insider information related to six mergers and acquisitions being considered by certain UBS clients.

Kummer, Lawrence N. (U.S.)
On 25 June 2004, CFA Institute imposed a Summary Suspension against Lawrence N. Kummer, pursuant to Article 12.3(g) of the CFA Institute Bylaws and Rule 7.4 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Summary Suspension automatically suspends Mr. Kummer’s CFA Institute membership, membership in a member society, and right to use the CFA designation. Mr. Kummer has failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct.
LaBadia, Joseph J. (US)

On 13 October 2015, CFA Institute imposed a Summary Suspension on Joseph John LaBadia (US), a lapsed charterholder member, and automatically suspended his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 12 November 2015.

In April 2015, the U.S. Securities and Exchange Commission announced that it had entered into a settlement with LaBadia in which he agreed to be barred from the securities business for multiple violations of the federal securities laws. The SEC found that, from 2007 through 2012, he made material misrepresentations and omissions to investors in connection with unregistered offers and sales of securities. LaBadia also breached his fiduciary duty to his clients by charging them advisory fees based on inflated portfolio values.

Specifically, LaBadia, an unregistered investment advisor, raised over $1.9 million from sixteen investors who were told they were making short-term, principal-protected investments in Raintree Racing LLC, an entity that purchased and sold thoroughbred racehorses. LaBadia represented to the investors that the annual rate of return was 20% and that their investments, which he characterized as “loans”, were “extremely low risk.” In fact, Raintree Racing lacked cash flow, could not pay the promised return, and was dependent on the infusion of funds from investors to continue its operations. LaBadia also knew at certain times that Raintree Racing funds were being diverted to pay for the day-to-day operations of Raintree Thoroughbred Farm, which was contrary to representations made to investors.

Approximately $1.1 million of the $1.9 million invested in Raintree Racing securities came from LaBadia’s unauthorized and undisclosed investment of funds of Atlanta Rehab Capital, LLC, a real estate company in which he was the managing principal. The five Atlanta Rehab investors, who were also advisory clients of LaBadia, were led to believe that their money was invested in local real estate, when in fact, a substantial portion of their funds were invested by LaBadia in Raintree Racing.

Lam, Daniel Ka-Kuen (Hong Kong)
On 5 December 2013, CFA Institute imposed a Summary Suspension on Daniel Ka-Kuen Lam (Hong Kong), an affiliate member, automatically suspending his membership. Because he did not request a review, the Summary Suspension became a Revocation on 6 January 2014. 

In July 2013, the Securities and Futures Commission of Hong Kong revoked Lam’s securities license after finding that he masterminded “window dressing” activities at the firm where he served as a responsible officer and managing director. Specifically, firm funds were transferred to a company wholly-owned by Lam, leading to a drop in his firm’s liquid capital to a level below the amount it was required to maintain under the SFC’s Financial Resources Rules. At the end of the month, before Lam’s firm submitted its financial filings to the SFC, a similar amount of funds would be returned to the firm either by Lam’s wholly-owned company or his relatives and friends. The SFC found that the purpose of these repeated intentional and fraudulent transfers was to inflate artificially the firm’s liquid assets in violation of the SFC’s Financial Resources Rules.
Lam, Leng Hung (Republic of Singapore)

On 12 November 2015, CFA Institute imposed a Summary Suspension on Leng Hung Lam (Republic of Singapore), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because Lam did not request a review, the Summary Suspension became a Revocation on 12 December 2015.

On 21 October 2015, Lam was found guilty of three counts of criminal breach of trust, stemming from his participation as a member of the management board of City Harvest Church (CHC) in a scheme to divert funds allocated to the church’s building fund to support the singing career of the wife of CHC’s founder. Lam and others funneled donor funds explicitly earmarked for building projects and investments into purchases of bonds issued by an entertainment management company created and controlled by CHC’s founder. The proceeds from the bond offering were then spent to advance the singing career of the founder’s wife. When church auditors raised questions about the bond investment, Mr. Lam and his co-conspirators engaged in round trip transactions in an attempt to conceal the illicit nature of the investments.

Lamprecht, Chris John (South Africa)

On 25 March 2009, CFA Institute imposed a Summary Suspension on Chris Lamprecht, pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Summary Suspension automatically suspends Lamprecht’s participation in the CFA Program. Lamprecht failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct.

Lee, Jong Wook (Republic of Korea)

On 30 March 2010, CFA Institute imposed a Summary Suspension on Jong Wook Lee (Republic of Korea), a candidate in the CFA Program, pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure.  Lee failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct.

Lee, Richard Choo-Beng (U.S.)

On 17 May 2010, CFA Institute imposed a Summary Suspension against Choo-Beng Lee (U.S.), which automatically suspended his CFA Institute membership and right to use the CFA designation pursuant to Article 11.3(c) of the CFA Institute Bylaws and Rule 7 of the Rules of Procedure. Lee was co-founder and president of Spherix Capital and a managing member of Far & Lee. On 13 October 2009, Lee pleaded guilty to securities fraud, and conspiracy to commit securities fraud and wire fraud in the U.S. District Court for the Southern District of New York. The criminal information to which Lee pleaded guilty alleged that he conspired to obtain and trade on inside information regarding several technology companies. The trades at issue generated more than US$5 million in illicit profits (or avoided losses) in brokerage accounts associated with Far & Lee and Spherix Capital.

On 2 February 2010, the U.S. Securities and Exchange Commission (SEC) obtained a final judgment permanently enjoining Lee from future violations of the federal antifraud provisions. The complaint, SEC v. Galleon Management., alleged that in July 2007, Lee obtained material nonpublic information concerning Google, which he passed to a business partner. The two men then traded on the basis of that information and generated more than US$450,000 in illicit profits. The complaint also alleged that in December 2008 and February 2009, Lee traded on inside information obtained by his business partner about Atheros Communications. These trades generated more than US$870,000 in illegal profits (or avoided losses). On 12 May 2010, the SEC issued an administrative order permanently barring Lee from associating with an investment advisor. Because Lee failed to submit a request for review, the Summary Suspension automatically became a Revocation of his CFA Institute membership and right to use the CFA designation on 17 June 2010.

Leung, Chi Keung (Hong Kong)

On 11 October 2012, a Review Panel imposed a Revocation of CFA Institute membership and the right to use the CFA designation upon Chi Keung "Edmond" Leung (Hong Kong), a charterholder member. The panel found that Leung violated Standards I – Fundamental Responsibilities and V(A) – Prohibition against Use of Material Nonpublic Information of the CFA Institute Code of Ethics and Standards of Professional Conduct (1999).

In August 2009, the Hong Kong Market Misconduct Tribunal found that Leung engaged in insider dealing based on material nonpublic information he received from an equity salesman at another firm. The tribunal found that Leung was told in confidence by the salesman that his firm's investment bankers were negotiating a below-market-price private placement for China Overseas Land and Investment (COLI), a company listed on the Hong Kong Stock Exchange. Based on this inside information, Leung sold more than 4 million shares of COLI held by the funds he managed to avoid a substantial loss from what he anticipated would be a fall in the market price following public disclosure of the private placement. The tribunal concluded that Leung knowingly traded on the basis of material nonpublic information. As a result, it barred Leung for eight months from managing investment funds or dealing in securities. Leung appealed, and in April 2012, the Court of Appeal affirmed the decision of the tribunal.

The CFA Institute Review Panel similarly determined that Leung violated Standard V(A) because he traded COLI on the basis of material nonpublic information that was disclosed to him in confidence and that he knew or should have known was misappropriated by the salesman at the other firm. In addition, by violating the laws in Hong Kong relating to insider dealing, Leung violated Standard I, which requires that members know and comply with all applicable laws and rules.

Levack, Robert (Canada)

On August 8, 2011, CFA Institute imposed a Revocation of CFA Institute membership and the right to use the CFA designation on Robert Levack (Canada), a charterholder member. CFA Institute found that Levack violated Standards I(A) – Knowledge of the Law, I(D) – Misconduct, III(A) – Loyalty, Prudence, and Care, IV(C) – Responsibilities of Supervisors, and VII(A) – Conduct as Members and Candidates in the CFA Program of the CFA Code of Ethics and Standards of Professional Conduct (2005).

In 2007 and 2008, Levack was the chief compliance officer and portfolio manager for Sextant Capital Management (SCMI), the registered investment adviser for the Sextant Strategic Opportunities Hedge Fund. SCMI and the fund were created and controlled by a former dentist turned money manager named Otto Spork. The fund had about 250 investors and C$30 million in assets under management.

In May 2011, the Ontario Securities Commission (OSC) determined that SCMI and Spork had perpetrated a major fraud on investors by: (1) selling investment fund units with falsely inflated values, (2) taking almost C$7 million in performance and management fees based on the inflated values; and (3) misappropriating more than C$4 million in the form of advances from investment funds. The fraud was tied to a small company called Iceland Glacier Products (IGP) that held indirect rights to a glacier, which it intended to use as its source for selling bottled water. The OSC found that from July 2007 to December 2008, Spork arbitrarily increased the value assigned to the fund’s position in IGP by 1,340 persent despite the fact that IGP’s business was not operational and had never generated any revenue. At times, the fund was more than 90 percent invested in IGP even though the private placement memorandum provided to investors had stipulated that no single position would ever exceed 20 percent.

Levack was one of three respondents who had worked with Spork at SCMI named in the OSC’s complaint. Prior to an administrative hearing before the OSC, Levack entered into a settlement and agreed to testify against Spork. As part of the agreement with the OSC, Levack admitted that he breached his management duties under the Ontario Securities Act to the detriment of investors. Specifically, he: (1) failed to report working capital deficiencies to the OSC and failed to take steps necessary to ensure that the noncompliance was remedied; (2) failed to ensure SCMI complied with requirements relating to the concentration of investments within the fund; (3) failed to prevent SCMI and Spork from making prohibited investments; and (4) failed to supervise the trades made and advice provided by SCMI. Levack also agreed to the termination of his registration under the Ontario securities laws, a 10-year prohibition from becoming registered again, and a C$15,000 administrative penalty.

Li, Zhenyu (Canada)

Effective 11 October 2016, CFA Institute imposed a One-Year Suspension of membership and of the right to use the CFA designation on Zhenyu Li (Ontario, Canada), a lapsed charterholder member. Professional Conduct found that Li violated the Code of Ethics and Standards of Professional Conduct:  I(A) – Knowledge of the Law; I(D) – Misconduct; and II(B) – Market Manipulation (2010).

While Li was a proprietary trader at a bank in Canada, he was the subject of a disciplinary action by the Investment Industry Regulatory Organization of Canada (IIROC), which investigated and identified twenty instances between August 2012 and November 2012 where Li entered non-bona fide, pre-opening orders. This pattern of order entry, a practice known as “spoofing,” misrepresented the supply, demand, and/or price for the securities.

As part of the settlement with IIROC, Li admitted that he entered orders that he ought reasonably to have known would create, or could reasonably be expected to create, a false or misleading appearance of trading activity in, or interest in the purchase or sale of, certain securities or an artificial sale price for the securities. Li agreed to a $10,000 fine, plus administrative costs, and a one-month suspension of access to IIROC-regulated marketplaces.

Lim, Kee Chong (Singapore)

On 19 October 2010, a Hearing Panel imposed the sanction of Revocation CFA Institute membership and the right to use the CFA Designation upon Kee Chong Lim (Singapore), a charterholder member. The Panel found that Lim violated Standards I – Fundamental Responsibilities, II(B) – Professional Misconduct, III(E) – Responsibilities of Supervisors, and V(A) – Prohibition Against Use of Material Nonpublic Information of the CFA Institute Code of Ethics and Standards of Professional Conduct (1999). The violations were based on Lim’s receipt of nonpublic, material and price-sensitive information; disclosure of such information to two subordinates; and subsequent trading based on the information received. The Hearing Panel’s decision and sanction determination were affirmed by a Review Panel on 2 February 2011.

In 2003, through the course and scope of his employment, Lim came to possess material, nonpublic information concerning a proposed offering by a company of preferred shares. Immediately after receiving such information, Lim disclosed it to two of his direct subordinates. Lim and the subordinates then immediately sold shares of the company in the respective client accounts that they managed. Lim’s actions violated Sections 219(2)(a), 219(2)(b) and 219(3) of the Securities and Futures Act of Singapore. Lim disclosed the matter to CFA Institute and fully cooperated with the investigation and review of the incident.

Liu, Hsiang-Wen (Taiwan)

On 4 February 2016, CFA Institute imposed a Summary Suspension on Hsiang-Wen Liu (Taiwan), a charterholder member, suspending her membership and right to use the CFA designation. A Hearing Panel affirmed the Summary Suspension, which then automatically became a Revocation on 16 June 2016.  

Liu was employed by the Bank of East Asia (BEA) in Hong Kong from 2012 to 2014. On 26 January 2016, the Securities and Futures Commission (SFC) announced that it had banned Liu for eight months because she failed to disclose an earlier criminal conviction in Taiwan. 

Specifically, in 2010, Liu pleaded guilty to a charge of contravention of Article 16 of Taiwan’s Securities Investment Trust and Consulting Act and was sentenced by the District Court in Taipei to four months’ imprisonment for illegally promoting and selling offshore funds to Taiwanese investors without regulatory approval. Liu never disclosed this conviction to the SFC, to her future employer, or to CFA Institute in her annual Professional Conduct Statements. Professional Conduct learned of Liu’s conviction from the SFC’s disciplinary action, and imposed a summary suspension because Liu had pleaded guilty in Taiwan to a crime punishable by more than one year in prison.

Luk, Ka Cheung Steve (Hong Kong)

On 8 July 2010, CFA Institute imposed a Summary Suspension on Ka Cheung Steve Luk (Hong Kong), which automatically suspended his CFA Institute membership and right to use the CFA designation. Under CFA Institute Bylaws, a Member who receives a permanent bar, or a bar for an indefinite amount of time, from association or affiliation with a governmental or judicial agency or by a public or private self-regulatory organization with jurisdiction over the investment decision-making process is subject to automatic suspension.

On 1 April 2010, the Securities and Futures Commission permanently banned Ka Cheung Steve Luk from re-entering the securities industry after a Market Misconduct Tribunal determined that he had engaged in insider trading in shares of China Overseas Land and Investment.
Lukasser, Jurgen (Austria)

On June 20, 2001, AIMR summarily suspended Jurgen Lukasser’s participation in the CFA Program, pursuant to Article 12.3(g) of AIMR's Bylaws and Rule 7.4 of AIMR's Rules of Procedure for Proceedings Related to Professional Conduct. Mr. Lukasser failed to submit information requested relating to professional conduct and activities.

Lumiere, Stefan, Lorca (US)

On 20 January 2017, CFA Institute imposed a Summary Suspension on Stefan Lorca Lumiere (New York City), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 20 February 2017.  

On 19 January 2017, a jury in federal court found Lumiere guilty of conspiracy, securities fraud, and wire fraud. Specifically, from June 2011 through September 2013, Lumiere, a former portfolio manager with Visium Asset Management, participated in a plan to defraud Visium’s credit fund’s investors by intentionally mismarking the value of certain securities held by the fund. 

In order to effect this plan, Lumiere and others obtained fraudulent price quotes from broker-dealers in order to improperly override prices calculated by the credit fund’s administrator and artificially inflate the fund’s net asset value each month. Lumiere also purchased additional quantities of certain securities already held by the credit fund at a deceptively inflated price. The inflated price was then reported to Visium’s accounting department for purposes of calculating the fund’s NAV. As a result of Lumiere’s misconduct, the credit fund overstated its NAV and misled investors about the liquidity of its holdings. 

Lumiere’s conviction for conspiracy carries a maximum sentence of five years in prison, while his convictions for securities fraud and wire fraud each carry a maximum sentence of 20 years.  He is also subject to a maximum fine of $5 million, or twice the gross gain or loss avoided from his wrongdoing.

Ly, Peter (Canada)

On 17 July 2009, Peter Ly, a Level III candidate in the CFA Program, pleaded guilty in the Ontario Court of Justice in Kitchener, Ontario, Canada to criminal charges of possession of marijuana for the purpose of trafficking, and possession of the drug ecstasy. As a result, Ly received a conditional sentence of imprisonment of 18 months, to be served in the community, for the marijuana trafficking charge and a three-month conditional sentence for possession of ecstasy, to be served concurrently. These are “indictable offences” under Canada’s Controlled Drugs and Substances Act, punishable by more than one year in prison.

On 9 October 2009, the CFA Institute Designated Officer imposed a Summary Suspension prohibiting Ly from any further participation in the CFA Program based on his having pleaded guilty to crimes that are punishable by more than one year in prison, in accordance with CFA Institute Rule of Procedure 7.2(a). Ly requested a review of the Summary Suspension, so the matter was referred to a Hearing Panel.

On 5 January 2010, a Hearing Panel conducted a formal hearing by telephone conference call to review Ly’s Summary Suspension. Ly did not dispute that he was guilty of the underlying criminal charges, but he argued that the Summary Suspension was unfair in that it would permanently prevent him from completing the CFA Program and becoming a CFA charterholder. The Hearing Panel confirmed that Ly pleaded guilty to criminal offences that are punishable by more than one year in prison, and affirmed the Designated Officer’s decision to impose a Summary Suspension permanently prohibiting Ly from further participation in the CFA Program.
Lyttleton, Mark, A. (UK)
On 26 October 2015, CFA Institute imposed a Summary Suspension on Mark A. Lyttleton (United Kingdom), a lapsed member, automatically suspending his right to reactivate his membership. Lyttleton was suspended for his failure to cooperate in an investigation by the Professional Conduct Program.  The Professional Conduct Program’s inquiry was related to an investigation of Lyttleton conducted by the Financial Conduct Authority on suspicion of insider trading. Lyttleton was sentenced to 12 months in prison. Because Lyttleton did not request a review, the summary suspension became a Revocation on 25 November 2015.
Ma, An-Ping (U.S.)
On June 20, 2001, AIMR summarily suspended An-Ping Ma’s participation in the CFA Program, pursuant to Article 12.3(g) of AIMR's Bylaws and Rule 7.4 of AIMR's Rules of Procedure for Proceedings Related to Professional Conduct. Miss Ma failed to submit information requested relating to professional conduct and activities.
Madian, Shant (Canada)

 Effective 14 April 2016, CFA Institute imposed a Censure on Shant R. Madian (Canada), a lapsed charterholder member. Professional Conduct found that Madian violated the CFA Institute Code of Ethics and Standard of Professional Conduct V(A) – Diligence and Reasonable Basis (2005).

Specifically, while working as a registered representative of TDS Securities in New York City in 2009, Madian shared with approximately 30 individuals and clients a rumor he heard of a possible acquisition of one Canadian oil and gas company by another.  The rumor turned out to be false.

Professional Conduct found that Madian negligently failed to know and follow TDS’s internal procedures designed to prevent insider trading, which required that he disclose the rumor to the firm’s compliance department. He also negligently failed to exercise diligence and have an adequate and reasonable basis, supported by appropriate investigation, to determine whether the rumor was based on material, non-public information improperly obtained from the company.

 

Mahaffey, Clayton R. Jr. (U.S.)

Effective 24 July 2015, CFA Institute imposed a Revocation of membership and of the right to use the CFA designation on Clayton R. Mahaffey, Jr. (US), a charterholder member. This sanction was imposed by a hearing panel following its determination that Mahaffey had violated the CFA Institute Code of Ethics and Standards of Professional Conduct:  l(A) - Knowledge of the Law, l(B) - Independence and Objectivity, l(C) – Misrepresentation, I(D) – Misconduct, III(D) - Performance Presentation, and V(A) - Diligence and Reasonable Basis (2005 and 2010 Editions).

 Mahaffey was the owner and president of Venture Research, LLC, which also did business as 2d Opinion Research. On websites run by these entities and others, Mahaffey published research reports about highly speculative microcap securities. Issuers and other interested third parties paid Mahaffey to publish these reports. From at least 2013, Mahaffey also maintained a website called Micro Dynamic Portfolio (MDP), which touted his claimed success as a stock picker.

 In his research reports, Mahaffey intentionally or recklessly made substantial, short-term price predictions for the speculative securities that he recommended, in violation of the anti-fraud provisions of federal securities laws, specifically, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Also in violation of the federal anti-fraud provisions, Mahaffey intentionally or recklessly omitted material negative information from many of the research reports that he published. In addition, Mahaffey’s reports made many unsupported, overly optimistic assumptions about the covered companies’ future prospects. Although negative information subsequently surfaced about many of the stocks that he recommended, Mahaffey failed to update, correct, or withdraw his earlier research reports.

 On the MDP website, Mahaffey claimed that he produced a 450% gain within 28 months, and that by following his advice, investors could “clobber” the market averages and quadruple their money in a short time. Mahaffey failed to make reasonable efforts to ensure that his presentations were fair, accurate, and complete. Finally, in a video presentation on the MDP website, Mahaffey made a substantial return prediction for a speculative security and failed to make reasonable efforts to ensure that his statements regarding his investment performance were fair, accurate, and complete.

 

 

Marske, John W. (U.S.)

A Hearing Panel and subsequent Review Panel found that John W. Marske, a member of AIMR and a holder of the CFA designation, violated AIMR’s Code of Ethics and Standard II(B) (Professional Misconduct) of AIMR’s Standards of Professional Conduct.

Marske and an AIMR member were co-workers until the AIMR member accepted a position elsewhere. Shortly after the AIMR member accepted this new position, Marske copied AIMR stationery and utilized it to prepare a fictitious document titled “Money Manager Alert!” purportedly from AIMR regarding the AIMR member. The “Money Manager Alert!” claimed to be authored by a fictitious Senior Vice President of AIMR and claimed to be a new service provided by AIMR. The fictitious document provided false information about the AIMR member’s professional experiences and made accusations about his professional conduct. The fictitious document was sent to the AIMR member’s new employer, three existing clients of the new employer, and two public funds, one of which was a prospective client of the new employer.

At the request of Mr. Marske, AIMR convened a Hearing Panel to determine whether his conduct constituted a violation of AIMR’s Code of Ethics and Standards of Professional Conduct. After consideration of the evidence and arguments, the Hearing Panel found that Mr. Marske violated AIMR’s Code of Ethics and Standard II(B) – Professional Misconduct, of AIMR’s Standards of Professional Conduct [1999]. The Hearing Panel imposed the sanction of Revocation of AIMR Membership and Membership in Member Societies and/or Member Chapters and Revocation of the right to use the CFA charter.

Pursuant to AIMR’s Rules of Procedure, Mr. Marske requested a Review Panel. The Review Panel upheld the Hearing Panel’s decision.
Matsumoto, Yugo (Japan)

On 29 August 2016, CFA Institute imposed a Summary Suspension on Yugo Matsumoto (Tokyo, Japan), a lapsed charterholder member, automatically suspending his right to reactivate his membership and use the CFA designation.  Matsumoto was suspended for his failure to cooperate with a Professional Conduct investigation. A Hearing Panel affirmed the summary suspension, which then automatically became a Revocation on 13 January 2017.   

Matsumoto disclosed to CFA Institute that he was involved in an internal investigation by his former employer, UBS Securities Japan Co., Ltd., related to his possible involvement in Libor and Tibor rate rigging. Later, media reports also suggested that Matsumoto may have been involved in misconduct relating to the rigging of interest rate benchmarks. Because of his failure to cooperate, Professional Conduct was unable to investigate the matter and determine whether Matsumoto had violated the CFA Institute Code of Ethics and Standards of Professional Conduct.

Mayberry, Jeffrey M. (U.S.)

On 23 March 2012, CFA Institute imposed a Summary Suspension on Jeffrey Mayberry (U.S.), a charterholder member. Mayberry was suspended for his failure to cooperate with a Professional Conduct Program investigation. Because he did not request a review, the summary suspension automatically became a permanent revocation of his membership and right to use the CFA designation.

Article 11.3(c) of the CFA Institute Bylaws and Rule 10 of the CFA Institute Rules of Procedure for Professional Conduct allows for the imposition of a Summary Suspension on a covered person if the covered person fails to cooperate with a CFA Institute Professional Conduct Program investigation. Unless a timely request for review is received, a Summary Suspension automatically becomes a revocation of membership in CFA Institute and permanent prohibition from participation in the CFA Program.

McRay, Laurie Ann (U.S.)
On 7 March 2016, CFA Institute imposed a Summary Suspension on Laurie Ann McRay (US), a regular member, automatically suspending her membership. McRay was suspended for her failure to cooperate with Professional Conduct in an investigation of an industry-related matter that resulted in a civil lawsuit and arbitration being filed against her. Because she did not request a review, the Summary Suspension became a Revocation on 14 April 2016.
Michaud, Francois (Canada)
On 18 January 2012, CFA Institute imposed a Summary Suspension on Francois Michaud (Canada), automatically suspending his membership in CFA Institute and right to use the CFA designation.

In May 2011, the Alberta Securities Commission permanently barred Michaud after finding him guilty of illegally trading in and distributing securities without registration and a prospectus. He was also ordered to disgorge over C$3.5 million and pay an administrative penalty of C$1 million. Because Michaud did not request a review of the summary suspension imposed by CFA Institute, it automatically became a revocation.

According to the ASC, between April 2007 and November 2008, 30 investors placed a total of C$7 million with Planned Legacies Inc. (PLI), to be invested in limited partnership interests in the Righthedge Fund, which was directed by Michaud. The fund represented that it was actively engaged in foreign currency trading carried out by Michaud as portfolio manager. PLI received payments, presumably from the Righthedge Fund, until June 2009 when all payments ceased. The ASC found that no financial statements, quarterly summaries, or other reports were ever provided to PLI, and there was no evidence that Michaud or the Righthedge Fund had ever engaged in any foreign currency trading. The Commission added that the location of Michaud and the investors’ money was unknown, and there was no realistic hope of recovering any of the money they had invested.
Mirman, Alvin S. (U.S.)

On 8 October 2015, CFA Institute imposed a Summary Suspension on Alvin S. Mirman (US), a lapsed charterholder, automatically suspending his right to reactivate his membership and use the CFA designation. Because Mirman did not request a review, the summary suspension became a Revocation on 8 November 2015.

In 2006, Mirman, then a CFA charterholder, failed to cooperate and appear for an on-the-record investigative interview requested by FINRA concerning his actions as the Chief Compliance Officer of a member firm. As a result, in 2007, Mirman was permanently barred by FINRA. He did not, however, disclose this investigation and disciplinary action to CFA Institute in his annual Professional Conduct Statements as required. In 2010, Mirman allowed his membership in CFA Institute to lapse. 

In October 2015, the Professional Conduct Program learned that FINRA had barred Mirman back in 2007, when the U.S. Securities and Exchange Commission announced that he had been charged with participating in a $6 million fraudulent scheme to create and sell undisclosed “blank check” companies (having no operations or value) to be used in reverse mergers with publicly-traded shell companies and sold to public investors as penny stocks in “pump and dump” scams. The SEC’s complaint is pending in federal district court in Florida.

Mohamed, Roy Farouk (United Kingdom)

On 5 December 2012, the CFA Institute Designated Officer imposed a Summary Suspension on Roy Farouk Mohamed (United Kingdom). Mohamed was suspended for his failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because he did not request a review within the time provided under the Rules of Procedure, the Summary Suspension automatically became a Prohibition from Participation in the CFA Program on 4 January 2013.

Moloto, Thabo Ted (South Africa)

On 30 July 2012, CFA Institute imposed a Summary Suspension upon Thabo Ted Moloto (South Africa) for failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Moloto is a covered person as defined by CFA Institute Bylaws. Because he did not request a review within the time provided under the Rules of Procedure, the Summary Suspension automatically became a Permanent Prohibition on 30 August 2012.

Monteiro, Guilherme Bethlem (Brazil)
On 4 June 2013, a Hearing Panel imposed a Revocation of membership and the right to use the CFA designation on Guilherme Bethlem Monteiro (Brazil), a charterholder member. The Panel found that Monteiro violated Standards I(A) – Knowledge of the Law, I(D) – Misconduct, IV(A) – Loyalty, VI(A) – Disclosure of Conflicts, and VI(B) – Priority of Transactions of the CFA Institute Code of Ethics and Standards of Professional Conduct (2005). This result was subsequently reviewed and affirmed by an Appeal Panel on 9 October 2013.

The Chicago Mercantile Exchange (CME) found that from January through October 2009, Monteiro, then a trader at a financial adviser in Brazil, violated the CME’s rules prohibiting fraud, bad faith, conduct inconsistent with just and equitable principles of trade, and the prearrangement of noncompetitive purchases and sales of index options. As a result, Monteiro was suspended by the CME from trading for six months and fined US$110,000, including restitution.

The Hearing Panel similarly found that Monteiro had executed numerous trades in E-mini options on the S&P 500 index directly between his personal account and a firm trading account that he controlled. These trades typically were done within just minutes of each other, and Monteiro directly bought from and sold to the firm’s account. Monteiro admitted these trades were designed to move money, totaling about US$18,400, from his employer’s account to his personal account, for his own benefit.

The Hearing Panel also found that through a series of 39 noncompetitive trades involving his employer’s account, Monteiro attempted to capture more favorable spreads in the open market for his own options trades. These trades resulted in a total gain of approximately US$73,379 for Monteiro and a corresponding loss of about US$47,514 for his employer.


Munro, C. Clive (U.S.)

On 17 March 2005, CFA Institute imposed a Summary Suspension against C. Clive Munro, pursuant to Article 12.3(c) of the CFA Institute Bylaws and Rule 7.3 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Summary Suspension automatically suspends Mr. Munro’s CFA Institute membership and right to use the CFA designation. Mr. Munro pleaded guilty in the United States District Court, Eastern District of Missouri to a violation of Title 18, U.S.C. §875(d), which is a felony. The elements of a Section 875(d) crime include transmission of a communication in interstate or foreign commerce with the intent to extort money and containing a threat to injure the property or reputation of the addressee or another.

Naeh, Daniel Moshe (Israel)

On 13 March 2012, CFA Institute imposed a Summary Suspension on Daniel Moshe “Dani” Naeh (Israel), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension automatically became a permanent revocation.

On 24 February 2010 in federal district court in New York City, Naeh pleaded guilty to charges that he engaged in separate conspiracies to rig bids for investment agreements and to defraud municipal issuers. According to the U.S. Department of Justice, from approximately 1998 through 2006, Naeh was an employee of CDR Financial Products, a financial services firm based in Beverly Hills, California. State and local governments and agencies hired CDR to act as their broker and conduct a competitive bidding process for contracts to invest the proceeds of municipal bonds issued to pay for public projects. Naeh and others, however, decided in advance which providers would be the winning bidders for certain investment agreements, in return for kickbacks to CDR in the form of unearned or inflated fees. As part of their fraudulent scheme, Naeh and others also gave certain co-conspirator providers “last look” information about the prices and conditions in their competitors’ bids, which enabled the providers to win contracts at artificially determined price levels. In exchange, CDR received kickbacks and relied on the co-conspirator providers to submit intentionally losing bids when requested on other contracts.

O’Brien, Raymond C. (U.S.)

A Hearing Panel convened on 13 July 2006, found that Raymond C. O’Brien, a CFA charterholder, violated the CFA Institute Code of Ethics and Standard IV(B.7) – Disclosure of Conflicts to Clients and Prospects; Standard IV(A.3) – Independence and Objectivity; Standard I – Fundamental Responsibilities; Standard II(B) – Professional Misconduct; and Standard III(E) – Responsibilities of Supervisors of the CFA Institute Standards of Professional Conduct [1996]. The Hearing Panel imposed the sanction of Revocation of CFA Institute Membership and Membership in Member Societies and Revocation of the CFA charter.

Mr. O’Brien failed to exercise reasonable judgment to achieve and maintain independence and objectivity and failed to adequately disclose conflicts of interest in the preparation and issuance of press releases, a financial analysis report, and public statements about Green Oasis, Inc. Specifically, Mr. O’Brien formed a company, RecOil, to generate purchase orders for Green Oasis; issued a financial analysis report on Green Oasis through another owned company, Tecumseh Asset Management; and issued press releases for Green Oasis through another owned company, MicroCap Consulting and Communications, while failing to disclose the material conflicts of interest including his ownership of Green Oasis stock, his client’s ownership of Green Oasis stock, and his ownership of the three companies. Mr. O’Brien also failed to exercise adequate supervision of MicroCap employees, thereby perpetuating the disclosure failures.

At the request of Mr. O’Brien, CFA Institute convened a Hearing Panel to determine whether his conduct violated the CFA Institute Code of Ethics and/or Standards of Professional Conduct. After consideration of the evidence and testimony, the Hearing Panel found that Mr. O’Brien’s conduct violated the above-mentioned Standards and imposed a Revocation of CFA Institute membership and membership in member societies and Revocation of the CFA charter.
O'Reilly, Matthew, M. (US)

Effective 12 September 2016, CFA Institute imposed a Revocation of membership and of the right to use the CFA designation on Matthew Michael O’Reilly (San Antonio, Texas), a charterholder member. A Hearing Panel found that O’Reilly violated the Code of Ethics and Standards of Professional Conduct:  I (A) - Knowledge of the Law; I(B) - Independence and Objectivity; I(C) - Misrepresentation; I(D) - Misconduct; III(A) - Loyalty, Prudence, and Care; VI(A) - Disclosure of Conflicts; and VI(C) - Referral Fees (2005). This result was subsequently reviewed and affirmed by an Appeal Panel.

From 2003 to 2009, O’Reilly was a principal partner and the Chief Compliance Officer at Aldus Equity Partners/Aldus Capital Corp. (“Aldus”), a private equity advisor in Dallas, Texas. Aldus was founded in 2003 by O’Reilly and a partner named Saul Meyer.

In 2009 and 2010, the Attorney General of New York brought criminal charges against several former State officials and Meyer, alleging that, beginning in 2003 or 2004, Aldus had obtained the business of the New York State Common Retirement Fund (a pension fund for the State’s police officers and firefighters) by corruptly paying “placement fees” or “kickbacks” to an entity controlled by those government officials. Based on the same allegations, the New York State Comptroller brought civil cases against Aldus, O’Reilly, Meyer, and others.

The New York State officials and Meyer pleaded guilty to criminal offenses. Aldus and O’Reilly subsequently settled the State’s civil case by agreeing to forfeit all interests in the investment funds involved, and pay $1 million in damages. O’Reilly paid $412,500 of this by forfeiting unpaid management fees.

In 2010, the New Mexico Educational Retirement Fund (a pension fund for the State’s teachers and school administrators) sued Aldus, O’Reilly, and others alleging a similar “pay to play” kickback scheme to obtain business from the Fund and to make false statements regarding the firm’s use of placement agents. That matter is pending. 

In 2011, the New Mexico State Investment Council (the trustee for two sovereign wealth funds designed to benefit the State’s schools and taxpayers) also sued Aldus and Meyer alleging that Aldus paid kickbacks to obtain business from the Council. To settle the Council’s lawsuit:  Aldus paid $500,000; O’Reilly and another partner paid $120,000; and Meyer paid $150,000.

The CFA Institute Hearing Panel found that, starting as early as 2003, and continuing into 2004 and 2005, O’Reilly saw several “red flags” and had a “heightened awareness” about the possible wrongdoings by his partner, Saul Meyer, including that a person close to the governor of New Mexico had paid Meyer $10,000 in cash, and that Meyer’s contacts in New Mexico claimed they had significant influence over the New Mexico Educational Retirement Fund. 

By September 2006, O’Reilly and his partners had become so suspicious of Meyer’s conduct that O’Reilly secretly recorded a telephone call with him, and an executive team meeting that Meyer and the other Aldus partners attended. In those recorded conversations, Meyer admitted that he was involved in unethical behavior to get business in New Mexico and that Aldus had sometimes recommended investments that were not good funds. Subsequently, the Aldus partners decided to terminate Meyer.

However, Aldus, with O’Reilly’s knowledge and consent, subsequently reversed the decision to terminate Meyer. The firm’s partners, including O’Reilly, chose to keep secret the damaging information they had gathered against Meyer and, instead, attempted to restrain his powers and conduct going forward.

After Meyer had admitted to unethical behavior in New Mexico, O’Reilly knew, or clearly should have known, that Aldus had been engaging in similar misconduct in New York.  But O’Reilly took no action to inform or protect Aldus’s clients or their beneficiaries. As a result, from 2006 to 2009, O’Reilly shared in Aldus’s receipt of millions of dollars in fees after he knew or should have known that the firm may have unethically obtained some, if not all, of that business.  O'Reilly’s failure to put the interests of the retirement funds’ and trusts’ beneficiaries above his own interests, and those of the firm, violated his fiduciary duties.

O'Rourke, Kevin J. (US)
On 27 September 2013, CFA Institute imposed a Summary Suspension on Kevin J. O’Rourke (US), a charterholder member, automatically suspending his membership and right to use the CFA designation. The Summary Suspension was affirmed by a Summary Suspension Hearing Panel and became a Revocation on 19 February 2014.

O’Rourke served as the President, sole owner, and principal of Western Pacific Capital Management (WPCM), and controlled the Lighthouse Fund (Lighthouse), an unregistered investment pool. On 19 September 2012, the SEC entered an Order barring O’Rourke from, among other things, associating with any broker, dealer, or investment adviser, with a right to reapply after two years subject to the conditions specified in the Order. The SEC found that O’Rourke: (i) solicited his clients to invest in an unregistered stock offering by Ameranth, without disclosing that WPCM would earn a 10% success fee for the capital it raised, (ii) solicited his clients to invest in Lighthouse without disclosing that Lighthouse would initially invest primarily in the Ameranth offering (for which WPCM would receive a success fee), (iii) misused Lighthouse assets by causing Lighthouse to purchase a WPCM client’s Ameranth shares in settlement of a dispute, and (iv) repeatedly misrepresented Lighthouse’s liquidity to investors. In addition to the industry bar, O’Rourke and WPCM agreed to pay disgorgement of US$482,745, prejudgment interest of US$169,195, and a civil penalty of US$130,000.


Parietti, Timothy (US)

On 21 November 2016, CFA Institute imposed a Summary Suspension on Timothy Aloysius Parietti (Basking Ridge, New Jersey), a lapsed charterholder member, automatically suspending his right to membership in CFA Institute and use of the CFA designation. Because he did not request a review, the summary suspension automatically became a Revocation.  

On 26 May 2016 in Manhattan federal court, Parietti admitted that between 2006 and 2008, while employed as a trader with Deutsche Bank U.S. Financial Markets, he participated in a scheme to manipulate the London Interbank Offered Rate (LIBOR). He pleaded guilty to felony charges of conspiring to commit wire fraud and bank fraud.  

Perleberg, Caley Bruce (US)

On 10 December 2014, CFA Institute imposed a Five-Year Suspension of membership and of the right to use the CFA designation on Caley B. Perleberg (US), a charterholder member. A Hearing Panel found that Perleberg violated the CFA Institute Code of Ethics and Standards of Professional Conduct I(C) – Misrepresentation, I(D) – Misconduct, and III(D) – Performance Presentation (2010).

In 2011, Perleberg was an affiliate member of CFA Institute and candidate in the CFA Program.  He was employed as a portfolio manager in the Trust Department of Home Federal Bank in Sioux Falls, South Dakota. Perleberg became a CFA charterholder in 2013.

At Home Federal, it was well-known that changes to asset allocations for customer trust accounts could be made only with the advance review and approval of the Bank’s Trust Investment Committee (or TIC). In December 2011, Perleberg recommended to the TIC that the Bank increase its allocations to alternative investments by 3% (to 15%), but the TIC did not approve this request.

Shortly thereafter, Home Federal employees began to suspect that, without telling anyone, Perleberg had begun purchasing securities to increase the alternative-investment allocations before the TIC meeting. When Perleberg’s co-workers and supervisors at the Bank questioned him about this, he repeatedly denied that he had changed the allocations without permission. In fact, Perleberg made purchases changing the allocations both before and after the TIC meeting at which his recommendation was discussed, but not approved. Home Federal terminated Perleberg’s employment in January 2012.

The Hearing Panel also found that, while he was employed at Home Federal, Perleberg failed to make every reasonable effort to investigate, report, and remedy a suspected problem with the Bank’s reported performance results, despite repeated requests by his colleagues that he do so. As a result, Perleberg caused inaccurate, inflated performance figures for the accounts that he managed to be communicated to Home Federal’s customers and Trust Committee.

Finally, after Home Federal terminated him, Perleberg claimed that he was entitled to unemployment compensation by making false and misleading representations to the South Dakota Department of Labor and Regulation that he was not fired for intentional misconduct. During the Professional Conduct Program’s investigation, Perleberg continued to make false and misleading statements regarding his changes to the Bank’s trust account asset allocations.

Perleberg’s Five-Year Suspension of membership and of the right to use the CFA designation expires 10 December 2019.

Perry, Craig James (U.S.)
On 9 May 2013, CFA Institute imposed a Summary Suspension on Craig James Perry (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. The sanction was reviewed and affirmed by a Summary Suspension Hearing Panel on 17 September 2013. Thus, the Summary Suspension became a Revocation on 19 September 2013.

In October 2011, Perry pleaded guilty to the felony offense of Enticing a Minor in violation of Iowa Code Section 710.10(2).
Pflaum, Jason P. (U.S.)

On 28 April 2011, CFA Institute imposed a Summary Suspension on Jason P. Pflaum (U.S.), a charterholder member, which automatically suspended his CFA Institute membership and right to use the CFA designation.

On 17 December 2010, Pflaum agreed to enter a guilty plea in the U.S. District Court for the Southern District of New York to felony charges of securities fraud and conspiracy to commit securities fraud relating to insider trading. He cooperated with federal prosecutors, testified against others at trial, and is awaiting sentencing by the court. The combined statutory maximum sentence on these two charges is 25 years.

Beginning in 2008, Pflaum, a technology analyst at a New York-based hedge fund, obtained inside information from the expert networking firm Primary Global Research (PGR). PGR, like other expert networking firms, linked investors with industry experts, including current employees of publicly traded companies, for a fee. Through these PGR experts, Pflaum received material nonpublic information regarding earnings, revenues, gross margins, and other confidential and material business developments for a number of publicly traded technology companies. Based on this information, Pflaum executed trades on behalf of his employer in the securities of these companies for which he had received inside information, earning substantial sums in unlawful profits.

Pitts, Larry, Keith (US)

Effective 24 September 2016, CFA Institute imposed a Two-Year Suspension of membership and of the right to use the CFA designation on Larry Keith Pitts (Indianapolis, Indiana), a charterholder member. A Hearing Panel found that Pitts violated the CFA Institute Code of Ethics and Standards of Professional Conduct:  I(A) – Knowledge of the Law; I(C) – Misrepresentation; I(D) – Misconduct; and III(D) – Performance Presentation (2005 and 2010).

Pitts was and is CEO, Portfolio Manager, and sole owner of Trust & Investment Advisors, Inc. (TIA), a registered investment adviser based in Indianapolis, Indiana. During the relevant period, Pitts managed and supervised TIA’s staff and had primary responsibility for meetings with clients and prospective clients. He also was responsible for, and personally appeared on, a local public-access television show for TIA called “Investing Today.”

In May 2015, Pitts entered into a settlement agreement with the U.S. Securities and Exchange Commission in which he agreed to remedial sanctions, monetary penalties, and a cease-and-desist order for misconduct that took place between 2005 and 2012.  During that period, the SEC’s Office of Compliance Inspection and Examinations (OCIE) conducted three separate on-site examinations of TIA:  the first in 2005; a second in 2007; and a third in 2011. These exams revealed repeated, unaddressed deficiencies in the areas of performance advertising and compliance generally.  Pitts was heavily involved in all three of the OCIE examinations.

During OCIE’s 2005 exam, the staff discovered that TIA had failed to develop a compliance program and Compliance Manual, as required by Rule 206(4)-7 of the Advisers Act. TIA promised to remedy the deficiency. During OCIE’s 2007 exam of TIA, the staff discovered that, notwithstanding the firm’s earlier promises to remedy its compliance deficiency, TIA still had not yet completed its Compliance Manual; TIA had not conducted an “Annual Compliance Review”; and TIA’s designated Chief Compliance Officer did not have appropriate knowledge of the Advisers Act, including being unaware of the requirement to conduct an annual review of TIA’s compliance program.

In response to the 2007 exam, TIA again assured OCIE that it would remedy its compliance deficiencies and engage a compliance consulting firm to complete the development of the firm’s Compliance Manual. However, when OCIE returned for its 2011 exam, the staff found that TIA still had made no progress in resolving its compliance deficiencies, despite having had three additional years in which to do so.

In its 2005 and 2007 exams, OCIE also found several instances in which TIA provided misleading performance information in marketing materials. Specifically, TIA’s performance presentations to clients included gross of fee performance returns over an extended period; yet, the same presentations did not explain the impact that advisory fees could have on the value of a client’s portfolio. Following the 2007 exam, TIA represented to OCIE that it had corrected the problem. But when the staff returned for its 2011 exam, they found that the firm was still using misleading marketing materials with cumulative returns that did not account for the impact of advisory fees and did not include appropriate disclosures.

In its 2011 exam, OCIE also discovered that TIA had distributed misleading performance information in weekly summary marketing emails from at least 2009 through 2012. In particular, TIA distributed a table on a weekly basis to some of its clients and to its solicitors -- individuals who are responsible for soliciting new investment advisory business -- that compared percentage increases in the S&P 500 Index to percentage increases in TIA’s portfolios, yet the table materially overstated the performance of the TIA portfolios compared with the S&P 500 Index because only the former included the reinvestment of dividends.

Pizelo, Philip Anthony ("Tony") (U.S.)

On 15 November 2013, CFA Institute imposed a Summary Suspension on Philip Anthony (“Tony”) Pizelo (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. Pizelo was suspended for his failure to cooperate with a Professional Conduct Program investigation of an industry-related matter. Because he did not request a review, the Summary Suspension became a Revocation on 16 December 2013.

Plaford, Chris A. (US)

On 23 June 2016, CFA Institute imposed a Summary Suspension on Christopher A. Plaford (US), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because Plaford did not request a review, the summary suspension became a Revocation on 23 July 2016.

 On 15 June 2016, the U.S. Attorney’s Office for the Southern District of New York announced that Plaford, a former portfolio manager at Visium Asset Management LP, had pled guilty and admitted his participation in an illegal scheme to trade on highly confidential and material non-public information received from a paid consultant who obtained advance tips from an unnamed senior official at the U.S. Food and Drug Administration regarding the agency’s approvals of pending generic drug applications. 

Plaford also pled guilty to charges that he participated in a scheme to defraud investors by obtaining fraudulent price quotes from “friendly” brokers, and then using these “sham” quotes to deceptively mismark each month the value of certain illiquid securities held in the fixed-income hedge fund that he managed. By doing so, he artificially inflated the net asset value (NAV) of the fund, often by tens of millions of dollars, and overstated the securities’ liquidity. In other instances, Plaford purchased additional quantities of certain securities (in which his fund already had a position) at deceptively inflated prices in a practice known as “painting the tape.” He then reported the artificially inflated prices to his firm’s accounting department for use in determining and reporting the fund’s NAV.

Plaford pleaded guilty to seven felony counts, including conspiracy and securities fraud charges, several of which carry maximum sentences of 20 years in prison and up to $5 million in fines. Plaford has not been sentenced yet and, reportedly, has been cooperating in the government’s investigation.

Plate, David (U.S.)

On 31 August 2010, CFA Institute imposed a Summary Suspension on David Plate (U.S.), which automatically suspended his CFA Institute membership. A covered person who receives a Summary Suspension under Rule 7.2 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct has 30 days in which to submit a written request for review. Otherwise, the suspension becomes a revocation of their membership.

In November 2009, David Plate was arrested in connection with the Galleon Group insider-trading case. The charges alleged that in 2007, while employed as a proprietary trader with The Schottenfeld Group, Plate executed trades in 3Com Corporation and Axcan Pharma. At the time of the trades, he possessed material, nonpublic information related to potential acquisitions of 3Com Corporation and Axcan Pharma. On 16 July 2010 Plate pleaded guilty to one count of securities fraud and one count of conspiracy.

Poon, James Ming Pui (Hong Kong)

Effective 28 March 2016, CFA Institute imposed a Revocation of membership and of the right to use the CFA designation on James Ming Pui Poon (Hong Kong), a charterholder member. CFA Institute found that Poon violated the Code of Ethics and Standards of Professional Conduct: I(A) – Knowledge of the Law; I(C) – Misrepresentation; I(D) – Misconduct; and VI(A) – Disclosure of Conflicts (2005 and 2010). 

 

During the period 2005 to 2011, Poon was employed by China International Capital Corporation (Hong Kong) Limited (CICCHK) and Yuanta Securities (Hong Kong) Company Limited (Yuanta). From October 2005 to February 2008, Poon was the Managing Director of CICC Securities’ Sales and Trading Department. In February 2008, he joined CICC Asset Management and became Managing Director of the Asset Management Department. In August 2009, Poon left CICCHK and became a Director and President of Yuanta.

 

In January 2014, the SFC banned Poon from re-entering the securities industry in Hong Kong for 10 months. The SFC found that during the relevant five-year period, Poon conducted extensive personal trading in several securities accounts belonging to two of his friends, while intentionally concealing such activities from his employers, CICCHK and Yuanta, in violation of General Principle 1 of the Code of Conduct for Persons Licensed by or Registered with the SFC.

 

Starting in June 2005, Poon secretly bought a total of 30 million shares of an energy company for his own benefit, using his two friends’ securities accounts. In July 2007, Poon sold the shares and received two checks totaling HK$25.6 million. Poon used the remaining money in the accounts to trade 83 different securities (excluding the energy company), until the accounts were closed in April 2011. Poon later admitted to the SFC that all of the shares in the friends’ accounts were bought and sold at his direction, and secretly belonged to him.  

 

According to the SFC, Poon knowingly and intentionally violated the written policies and procedures of CICCHK and Yuanta, which required that employees disclose their outside securities accounts and holdings both before joining the firm and annually. The firms also required that all personal trading by Poon be pre-approved in writing by both his supervisors and the firms’ compliance departments. The SFC found that Poon deliberately and dishonestly concealed from his employers his beneficial interests and trading activities in his friends’ accounts by preparing and submitting annual declarations and acknowledgement forms that he knew were false and misleading. 

 

Poon’s misconduct, which was repeated numerous times and continued over a period of more than five years, prevented CICCHK and Yuanta from properly monitoring his personal trading to detect and prevent market manipulation and insider trading. Such monitoring is of crucial importance in protecting the integrity of the financial markets.

 

Pu, Weidong (Singapore)

On 30 August 2016, CFA Institute imposed a Summary Suspension on Weidong Pu (Singapore), a charterholder member, automatically suspending his membership and right to use the CFA designation. Pu was suspended for his failure to cooperate with a Professional Conduct investigation of an industry-related matter. Because he did not request a review, the summary suspension became a Revocation on 28 September 2016.  

On 26 February 2015, the Monetary Authority of Singapore (MAS) imposed a civil penalty against Pu for insider trading in the shares of Sinomem Technology Ltd., pursuant to sections 218(2)(a) of the Securities and Futures Act (the Act). On 3 May 2016, Pu admitted to contravening the Act and agreed to pay a civil penalty and legal costs incurred by the MAS, and agreed to not be a company director or involved in the management of a company for a period of one year beginning 3 July 2016. Because of his failure to cooperate, Professional Conduct was unable to investigate the matter and determine whether Pu violated the CFA Institute Code and Standards.

Pushka, Wayne L. (Canada)

On 27 August 2014, CFA Institute imposed a Summary Suspension on Wayne L. Pushka (Canada), a charterholder member, automatically suspending his membership and right to use the CFA designation. This action was taken because Pushka was barred from registration for an indefinite period by the Ontario Securities Commission (OSC). Professional Conduct granted Pushka additional time to respond while he appealed to the Ontario Superior Court. The OSC’s decision was affirmed on 17 May 2016. Because Pushka failed to renew his request for a review, the Summary Suspension automatically became a Revocation on 16 June 2016.

During the relevant period, Pushka served as President, CEO, and a director of Crown Hill Capital Corporation (CHCC), the investment fund manager for a trust and several funds, including the Crown Hill Fund (CHF). He was also director and sole officer of Crown Hill Asset Management Inc., the portfolio manager of CHF.

Following a fourteen-day adversarial hearing, the OSC found that, among other things, Pushka breached his duties to investors in CHF by causing CHCC and CHF to enter into a series of transactions to have CHCC acquire the management services agreements for other investment funds and bring about mergers of those funds with CHF, primarily for Pushka’s own interests rather than those of CHF. The OSC found that Pushka also violated his duties to CHF’s investors by causing CHCC to use CHF’s assets to finance two other separate acquisitions of the rights to the management services agreements for other investment funds in order to increase CHCC’s assets under management and management fees, primarily for the benefit of CHCC and Pushka rather than CHF. The OSC also found that Pushka caused CHCC to send CHF unitholders a materially misleading notice of meeting and management proxy circular in connection with a special meeting of CHF unitholders.

 

Rollert, Gordon J. (U.S.)

Pursuant to Article 13.2(c) of AIMR’s Bylaws and Rule 7.3 of AIMR’s Rules of Procedure for Proceedings Related to Professional Conduct, AIMR’s Designated Officer summarily suspended the AIMR membership, membership in AIMR Societies/Chapters, and right to use the CFA designation of Gordon J. Rollert. Mr. Rollert pled guilty in the United States District Court of Massachusetts to two counts of wire fraud and one count of mail fraud, which are felonies.

Rubin, David (U.S.)

On 13 March 2012, the CFA Institute Designated Officer imposed a Summary Suspension on David Rubin (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. Rubin requested a review of his summary suspension, as provided under Rule 10.3 of the Rules of Procedure (2010) but did not proceed with the Summary Suspension Hearing Panel once scheduled. Because there was no completed request for review within the time provided under the Rules of Procedure, the Summary Suspension automatically became a permanent Revocation of his membership and the right to use the CFA designation.

On 30 December 2011, Rubin pleaded guilty in federal court to charges that he engaged in separate conspiracies to rig bids for investment agreements and to defraud municipal issuers. According to the U.S. Department of Justice, from approximately 1998 through 2006, Rubin was the owner of CDR Financial Products, a financial services firm based in Beverly Hills, California. State and local governments and agencies hired CDR to act as their broker and conduct a competitive bidding process for contracts to invest the proceeds of municipal bonds issued to pay for public projects. Rubin and others, however, decided in advance which providers would be the winning bidders for certain investment agreements, in return for kickbacks to CDR in the form of unearned or inflated fees. As part of their fraudulent scheme, Rubin and others also gave certain co-conspirator providers “last look” information about the prices and conditions in their competitors’ bids, which enabled the providers to win contracts at artificially determined price levels. In exchange, CDR received kickbacks and relied on the co-conspirator providers to submit intentionally losing bids when requested on other contracts.

 

Scheidt, Zachary, D. (US)
On 25 January 2017, Zachary D. Scheidt (Kennesaw, Georgia), a lapsed charterholder member, Permanently Resigned his membership in CFA Institute in the course of a disciplinary proceeding.
Silvester, Paul J. (U.S.)
On February 9, 2000, AIMR summarily suspended the CFA designation of Paul J. Silvester, pursuant to Article 12.3(c) of AIMR's Bylaws and Rule 6.3 of AIMR's Rules of Procedure for Proceedings Related to Professional Conduct. Summary suspension automatically suspends Mr. Silvester’s right to use the CFA designation. Mr. Silvester pleaded guilty in the United States District Court of Connecticut to RICO in violation of Title 18, U.S.C. §1962(c) and Conspiracy to Money Launder, in violation of Title 18 U.S.C. §1956(h), which are felonies.
Sine, Barry M. (US)

Effective 10 July 2017, CFA Institute imposed a Two-Year Suspension of membership and of the right to use the CFA designation on Barry M. Sine (New York, New York), a charterholder member. A Hearing Panel found that Sine violated the CFA Institute Code of Ethics and Standards of Professional Conduct: I(B) – Independence and Objectivity; I(C) – Misrepresentation; and I(D) – Misconduct (2010).  An Appeal Panel reviewed and affirmed that decision, but reduced the term of suspension from three years to two.

The Hearing Panel found that while serving as Secretary of the New York Society of Securities Analysts (NYSSA) Board of Directors, Sine: participated in an internal investigation; received confidential information, documents, and investigative reports; and attended and participated in confidential meetings, discussions, deliberations, and voting regarding allegations against a fellow Board member and an officer of NYSSA, without ever disclosing that he was married to the complaining party. And when specifically asked at a Board meeting, Sine denied having any relationship with the complaining party or other conflicts of interest regarding the matter under review. 

 Both the Board’s internal investigation and a separate, independent investigation by an outside party commissioned by NYSSA concluded that the allegations against the Board member and officer were unfounded. 

 

    

Singh, Alka (Canada)

Effective 23 July 2015, CFA Institute imposed a Revocation of membership and the right to use the CFA designation on Alka Singh (Canada), a lapsed charterholder member. A Hearing Panel found that Singh violated the Code of Ethics and Standards I(A) – Knowledge of the Law, I(B) – Independence and Objectivity, I(C) – Misrepresentation, I(D) – Misconduct, and VI(A) – Disclosure of Conflicts of the CFA Institute Code of Ethics and Standards of Professional Conduct (2005 and 2010). This result was subsequently reviewed and affirmed by an Appeal Panel.

 In 2009 and 2010, Singh was employed as a research analyst at Rodman & Renshaw, LLC, a broker-dealer and investment banking firm in New York City. Her duties were to prepare objective research reports on companies in the metals and mining sector.

 In June 2012, Singh signed a Letter of Acceptance, Waiver, and Consent (AWC), which FINRA accepted in August 2012. The regulator found that she violated its rules requiring that members observe high standards of commercial honor and just and equitable principles of trade by “requesting the CEO of [a] covered company to pay her a concealed fee for her efforts, including research coverage.” As a result, Singh was suspended for six months in all capacities and fined $10,000 by FINRA.

 In her July 2012 Professional Conduct Statement (PCS) submitted to CFA Institute, Singh denied that she had been the subject of any investigations or regulatory actions--even though she was interviewed by FINRA in May 2012 and had signed the AWC in June 2012, just two weeks before submitting her PCS answers. CFA Institute later discovered FINRA’s disciplinary action against Singh from media reports.

 In March 2014, the Ontario Securities Commission (OSC) suspended Singh and Mine2Capital–a research firm and website that she established after returning to Toronto–from acting in various capacities for periods ranging from one to three years. In settling the OSC action, Singh admitted to marketing and selling research reports on mining companies while she was not registered, and without disclosing to investors that companies had paid her for the reports and that she had purchased and continued to own stock in some of them.

 The CFA Institute Hearing Panel found that Singh failed to act with integrity, did not place the integrity of the investment profession above her own personal interests, and solicited compensation that reasonably could be expected to compromise her independence and objectivity. Singh also serviced and supported the work of investment bankers at Rodman, despite industry rules that required separation of research and investment banking functions. Finally, the Hearing Panel found that Singh made false statements when she testified under oath in the FINRA inquiry; she made false statements to CFA Institute in her July 2012 PCS and during the course of the Professional Conduct Program’s investigation of her conduct; and she published research reports at Mine2Capital that falsely stated that she had no financial interest in the companies that she covered.

Soh, Tze Kuan (Republic of Singapore)

On 17 January 2013, the CFA Institute Designated Officer imposed a Summary Suspension on Tze Kuan Soh (Republic of Singapore), a charterholder member, automatically suspending his membership and right to use the CFA designation. The sanction was reviewed and affirmed by a Summary Suspension Hearing Panel on 18 April 2013. Thus, the Summary Suspension became a Revocation on 2 May 2013.

On 6 September 2010, Soh entered a guilty plea in Singapore District Court to four criminal charges relating to a trading scheme involving the execution of married trades with a counterpart while working as a Senior Fund Manager at ING Investment Management, Asia Pacific (Singapore). The trading scheme was deemed to act as a fraud upon Soh’s client, a charitable organization. The trading scheme provided non-financial benefits to Soh and his counterpart made S$842,000 in intra-day, contra-profits. Soh was sentenced to eight months in prison on 25 October 2010. Soh appealed his sentence to the High Court of the Republic of Singapore but withdrew his appeal.

Sorensen, Jonathan G. (U.S.)

On 14 August 2013, CFA Institute imposed a Summary Suspension on Jonathan G. Sorensen (U.S.), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the Summary Suspension became a Revocation on 13 September 2013.

In April 2013, FINRA permanently barred Sorensen from association with any FINRA member in any capacity. FINRA found that Sorensen violated FINRA Rules 8210 and 2010 by refusing to appear for an on-the-record interview with FINRA in connection with its investigation of Sorensen’s management of a limited partnership fund.

Speckert, Erwin T. (Canada/Switzerland)
On 2 September 2014, CFA Institute imposed a Summary Suspension on Erwin T. Speckert (Canada/Switzerland), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 2 October 2014.

In June 2014, the Swiss Financial Market Supervisory Authority (FINMA) barred Speckert from, among other things, carrying out any activity that is legally related to the financial markets and requires a permit and from engaging in professional activity as a securities broker. FINMA’s bar was issued in connection with proceedings against three Swiss firms of which Speckert served as a director. FINMA found that the firms were improperly engaged in accepting investor subscriptions on behalf of clients without the proper licenses.
Springer, Margaret Lisa (U.S.)

On 22 November 2010, a Hearing Panel imposed a Revocation of CFA Institute membership and the right to use the CFA designation upon Margaret Lisa Springer (U.S.), a charterholder member. The Hearing Panel found that Springer violated Standards I(B) –  Independence and Objectivity, I(D) – Misconduct, V(A) – Reasonable Basis, V(B) – Communication with Clients, and V(C) – Record Retention of the CFA Institute Code of Ethics and Standards of Professional Conduct (2005).

These findings were predicated on Springer’s authorship of at least 59 issuer-paid “research reports” for Beacon Equity Research from December 2006 through August 2009. These reports were for small-cap and microcap companies that were traded in the over the counter (OTC) markets. Springer rated all 59 companies as “speculative buys.” Her research reports were widely circulated and available to the investing public via the internet.

The Hearing Panel found that Springer did not conduct adequate, independent research and analysis regarding many of the companies she covered.  In several instances, these were public shell companies that had no audited financial information and had made no recent public filings. As a result, in many cases, Springer relied exclusively on information provided to her by the issuers, which she accepted without question and failed to verify against publicly available information. As a result, Springer’s reports, formatted to resemble equity research reports with price targets and “speculative buy” recommendations, lacked independence, objectivity, and reasonable basis and were essentially extensions of the issuing companies’ promotional efforts rather than independent research.

According to the Standards of Practice Handbook (2005), analysts conducting issuer-paid research “must engage in thorough, independent, and unbiased analysis…otherwise, analysts risk misleading investors by becoming an extension of an issuer’s public relations department while appearing to produce ‘independent’ analysis…. At a minimum, research should include a thorough analysis of the company’s financial statements based on publicly disclosed information, benchmarking within a peer group, and industry analysis.” Springer’s research reports gave the appearance of independence but failed to include analysis of the companies’ financial statements based on publicly disclosed information, in violation of Standard I(B) – Independence and Objectivity. Failure to reach the minimum standard of research also reflected adversely on Springer’s competence as a CFA charterholder in violation of Standard I(D) – Misconduct.

The Hearing Panel found that Springer, in conducting her research, failed to verify the accuracy and reasonableness of issuers’ statements, claims, and projections before using and publishing the information in her reports. She consequently published inaccurate and/or misleading information which was then distributed to public investors via the internet. Under the circumstances, Springer failed to exercise diligence, independence, and thoroughness in making investment recommendations and to have a reasonable and adequate basis, supported by appropriate research and investigation, for those recommendations. These actions violated Standard V(A) – Diligence and Reasonable Basis.

Springer also violated Standard V(B) – Communication with Clients and Prospective Clients, by failing to outline the limits of her analysis and/or include the risk of business failure in some reports.  Finally, she violated Standard V(C) – Record Retention, which requires that members develop and maintain appropriate records to support their investment analyses and recommendations. Springer’s research records included promotional materials provided by issuing companies, but did not include public filings or audited financial statements for each company.

Strauss, Ronald L. (US)
Effective 7 March 2017, Ronald L. Strauss (Chicago, USA) a lapsed charterholder member, permanently resigned his membership in CFA Institute and any member society during the course of a Professional Conduct investigation regarding findings made by the Securities and Exchange Commission that from 2009 until 2011, he dedicated insufficient resources to compliance which contributed to multiple compliance failures at the investment advisory firm where he served as president until his retirement in 2014. 
Sun, Wu (Australia)

On 22 March 2010, CFA Institute imposed a Summary Suspension on Wu Sun (Australia), a candidate in the CFA Program, pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure. Sun failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct.

Swanson, K. Timothy (US)

On 22 June 2016, CFA Institute imposed a Summary Suspension on K. Timothy Swanson (US), a charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 22 July 2016.  

On 13 June 2016, the U.S. Securities and Exchange Commission affirmed the findings of an Administrative Law Judge that Swanson, a portfolio manager at Fiduciary Asset Management LLC, made fraudulent misstatements and omitted material facts in reports to shareholders of his firm’s closed-end mutual fund, the Fiduciary/Claymore Dynamic Equity Fund.  According to the SEC, Swanson failed to disclose the fund’s use of new, complex, and risky derivative trading instruments and strategies, and their effect on the fund’s performance and risk exposure. The fund lost more than USD$45 million in September and October 2008, and was liquidated the following year.  The SEC ordered that Swanson pay a fine of USD$130,000, and barred him from the securities business, with a right to reapply after two years.   

Talbot, Peter E. (U.S.)

On 13 January 2012, CFA Institute imposed a Summary Suspension on Peter E. Talbot (U.S.), a charterholder member, automatically suspending his CFA Institute membership and right to use the CFA designation. Because Talbot did not request a review of the summary suspension imposed by CFA Institute, it automatically became a revocation.

Talbot was suspended after he pled guilty to felony charges of securities fraud and conspiracy to commit securities fraud. Under the terms of his plea agreement, Talbot admitted to tipping his nephew with material, non-public information regarding the possible acquisition of Safeco Corporation, which Talbot had learned of during the course of his employment. While in possession of that information, Talbot and his nephew purchased Safeco securities, which they sold immediately following the announcement of Safeco’s acquisition - realizing more than US$615,000 in ill-gotten gains. In a separate civil proceeding brought by the U.S. SEC, Talbot was ordered to disgorge all the ill-gotten gains of his fraud and assessed a civil penalty of more than US$1.8 million.

Tannock, Barbara Raveen (Bermuda)

On 15 October 2012, the CFA Institute Designated Officer imposed a Summary Suspension on Barbara Raveen Tannock (aka Barbara R. Williams) (Bermuda), a charterholder member, automatically suspending her membership and right to use the CFA designation. The sanction was reviewed and affirmed by a Summary Suspension Hearing Panel on 7 March 2013. Thus, the Summary Suspension became a Revocation on 14 March 2013.

On 7 May 2012, Tannock entered a guilty plea to five counts of theft, each carrying a maximum penalty of ten years in prison, in the Bermuda Supreme Court. She was charged with stealing BD$76,500 from an elderly couple for whom she was acting as a personal financial consultant. Tannock was sentenced to six months in prison for this offense on 6 July 2012.

Ti-shun, Mao (Taiwan)

On 2 April 2010, CFA Institute imposed a Summary Suspension on Mao Ti-shun (Taiwan), a candidate in the CFA Program, pursuant to Article 11.3(f) of the CFA Institute Bylaws and Rule 7 of the CFA Institute Rules of Procedure. Ti-shun failed to cooperate with the CFA Institute Professional Conduct Program in its investigation of his conduct.

Trueman, Jack, Jason (Canada)

Effective 19 October 2017, CFA Institute imposed a Six-Month Suspension of membership and of the right to use the CFA designation on Jack Jason Trueman (Kingston, Ontario), a charterholder member. A Hearing Panel found that Trueman violated the CFA Institute Code of Ethics and Standards of Professional Conduct: I(A) – Knowledge of the Law, IV(A) – Duties to Employers – Loyalty, IV(B) – Additional Compensation Arrangements, and VI(A) – Disclosure of Conflicts (2014).

Trueman has been employed as a registered representative and portfolio manager at Cumberland Private Wealth Management since January 2014. While employed at Cumberland, Trueman continued to conduct a separate, undisclosed financial planning business that he called True Growth Private Wealth Management to advise friends and family members. In addition to financial planning, he advised and assisted his True Growth clients in making and managing investments.

Trueman had True Growth’s clients open and maintain investment accounts in their own names with various large, discount brokerages in Canada. These firms processed the trades and provided the clients with confirmations and account statements. In total, there were 31 clients with 54 accounts and assets under management of approximately $1.4 million (CAD).

Between January 2014 and February 2015, Trueman advised clients of True Growth without notifying Cumberland, his employer. He placed trades in his True Growth clients’ accounts from the computer assigned to him at Cumberland and used the computer to create and store documents related to his outside business. He also conducted outside business on behalf of his True Growth clients during regular business hours, as well as during his personal time.

On 30 January 2014, Trueman signed an acknowledgment in which he agreed to follow the guidelines and rules in Cumberland’s Compliance Manual. The Manual specifically prohibited his participation in any “outside activity” without prior firm approval and required that any “pro” (proprietary) accounts, including those in which he had trading authorization, be maintained at Cumberland.

Also on 30 January 2014, and again on 10 February 2015, Trueman signed Cumberland’s Annual Employee Disclosure Forms in which he was required to disclose any outside business activities or involvement in pro accounts. He did not disclose his outside business activities, receipt of fees from outside clients, or possession or use of discretionary trading authority on behalf of his clients at True Growth.

The matter was also investigated by the Investment Industry Regulatory Organization of Canada (IIROC), which has Member Rules that: (1) require that registered representatives disclose all outside business activities to their employer and obtain prior approval; and (2) prohibit registered representatives from accepting remuneration from any party other than their employer for securities-related activities.  In August 2016, IIROC accepted Trueman’s offer of settlement. In doing so, the IIROC hearing panel noted that Trueman had answered his firm’s compliance questionnaire and falsely stated that he was not involved in any outside business activities. In settling with IIROC, Trueman agreed to pay a fine of $25,000 and costs of $2,500, and complete the Chief Compliance Officer’s Qualifying Examination.

Trueman’s actions deprived his firm of the opportunity to supervise his outside business activities, including the receipt of fees from clients for investment-related activities, and clients of the separate business were not properly protected by the securities regulatory system, such as oversight by IIROC.

Tsakok, Raoul N. (Canada)

On 24 June 2010, CFA Institute imposed a Summary Suspension against Raoul N. Tsakok (Canada), which automatically suspended his membership and right to use the CFA designation. Under CFA Institute Bylaws, a member who receives a permanent bar, or a bar for an indefinite period, from registration under the securities laws, or similar laws, related to the investment decision-making process, is subject to automatic suspension.

Tsakok was the owner and advising director of Sagit Investment Management, Inc. Sagit was registered under the provincial Securities Act as a portfolio manager and, until 2003, managed several mutual funds. The British Columbia Securities Commission began a compliance review of Sagit in 2002, after Sagit withdrew the prospectus filings for its mutual funds. Following its investigation, the BCSC approved Sagit’s merger with another firm, which took over the mutual funds. As part of the resolution, Sagit and Tsakok voluntarily surrendered their securities registrations. In 2004, the BCSC reopened its investigation into whether Tsakok and Sagit had met the required standards of care in managing the mutual funds in 2003. In 2006, Tsakok entered into a settlement agreement in which he agreed never to apply for registration under the Act as an advising or trading officer of a registrant.

Tu, Qiang (People's Republic of China)

On 22 April 2011, CFA Institute imposed the sanction of Summary Suspension on Qiang Tu (People's Republic of China), a postponed Level I candidate, which automatically suspended him from further participation in the CFA Program.

Tu failed to cooperate with the Professional Conduct Program’s investigation into a November 2009 article, which stated that he had been named in an investigation by the China Securities Regulatory Commission into insider-trading activities at Invesco Great Wall Fund Management.

Tullis, R. Matthew (U.S.)

On 24 February 2012, the CFA Institute Designated Officer imposed a Summary Suspension on R. Matthew Tullis (U.S.), a charterholder member, automatically suspending his CFA Institute membership and right to use the CFA designation. Because there was no request for review within the time provided under the Rules of Procedure, the summary suspension automatically became a permanent revocation on 11 May 2012.

On 21 February 2002, the U.S. Comptroller of the Currency found that Tullis, in violation of his firm’s agreements with its discretionary-account customers, placed customers in highly risky and unsuitable collateralized mortgage obligations and, in order to hide the losses incurred, made overvalued cross trades and misrepresented the pricing and average life of the securities. As a result, the comptroller entered an order indefinitely barring Tullis from associating with all federally insured national banks, savings institutions, and credit unions in the United States.

 

Vardy, Nicholas, Attila (England)

Effective 7 September 2017, Nicholas Attila Vardy (London, England), a lapsed charterholder member, Permanently Resigned his membership in CFA Institute and right to use the CFA designation during a disciplinary proceeding. 

During the period 2014 to 2017, Vardy provided investment analysis and recommendations for investors through several newsletters and trading services that were owned, marketed, and sold by a financial publishing company, with which he had a relationship as an independent contractor. Professional Conduct had alleged that Vardy failed to dissociate or separate from the publishing company even though he knew, or clearly should have known, that it made, and was continuing to make, dishonest, false, inaccurate, and/or misleading statements and omissions in promoting, marketing, and selling his investment newsletters/trading services to investors. These alleged misrepresentations were pervasive and included claims, recommendations, assurances, and predictions of specific future returns on recommended investments.

The materials used by the publishing company to promote, market, and sell Vardy’s investment newsletters/trading services claimed that investors who subscribed could achieve huge profits based on the investments he would recommend. The materials also suggested that similar returns would be replicated and realized by subscribers, often within a matter of only a few weeks or months. Professional Conduct alleged that Vardy’s continued association with the publishing company making such misrepresentations and omissions constituted participation or assistance in such unethical conduct, as explained in the 2014 Standards of Practice Handbook (at pp. 15, 19, and 20-21).

Vassiljev, Dmitri (Estonia)

On 8 August 2011, CFA Institute imposed a Prohibition from Participation in the CFA Program on Dmitri Vassiljev (Estonia), a CFA Level III candidate. This sanction was based on the determination that Vassiljev had violated Standards I(A) – Knowledge of the Law, II(A) – Material Nonpublic Information, and I(D) – Misconduct of the CFA Institute Code of Ethics and Standards of Professional Conduct (2005).

Vassiljev, a financial analyst, had access to material nonpublic information relating to the proposed takeover of two telecom companies through his employment by a financial institution that was participating in the preparation of the takeover bid. Based on this information, Vassiljev purchased shares and options in the stock of the two target companies during 7-12 August 2009. On 24 August 2009, the takeover bid was publicly announced and shares in both of the target companies rose by more than 20 percent.

In November 2009, Estonian prosecutors charged Vassiljev with insider trading. In December 2009, an Estonian court entered judgment against Vassiljev, finding him guilty of misuse of material nonpublic information and fining him in an amount equal to 100 days of daily income.

Vogt, Joerg (Germany)
On 14 April 2016, CFA Institute imposed a Summary Suspension on Joerg Vogt (Germany), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Vogt, formerly a trader at Deutsche Bank, was suspended for his failure to cooperate with Professional Conduct’s investigation of his alleged involvement in a conspiracy to rig the Euro Interbank Offered Rate (Euribor). On 18 March 2016, the United Kingdom’s Serious Fraud Office (SFO) obtained an arrest warrant for Vogt and four others to answer charges of conspiracy to defraud. Because he did not request a review, the Summary Suspension became a Revocation of membership and the right to use the CFA designation on 15 May 2016.
von Tunzelman, Justin G. (United Kingdom)

On 1 December 2009, CFA Institute imposed a Summary Suspension on Justin G. von Tunzelman, pursuant to Article 11.3(c) of the CFA Institute Bylaws and Rule 7.3 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. This Summary Suspension automatically suspends von Tunzelman’s membership and right to use the CFA designation. Von Tunzelman was convicted of sexual assault in the Southwark Crown Court and was sentenced to 30 months of imprisonment. The sentence is subject to an appeal.

Wang, Kefei (Beijing)

Effective 2 March 2017, CFA Institute imposed a Censure on Kefei Wang (Beijing, China), a charterholder member. CFA Institute found that Wang violated the Code of Ethics and Standard of Professional Conduct I(A) - Knowledge of the Law (2014).

The United States Congress created the Immigrant Investor Program, also known as the “EB-5” Program, to stimulate the economy through job creation and capital investment by foreign investors. EB-5 investments are typically offered as limited partnership interests. From January 2010 through May 2014, Wang received $40,000, which constituted his portion of the commissions received from one EB-5 Investment Offerer. These commissions were paid pursuant to a written Agency Agreement between Wang’s company, Nautilus Global Capital, LLC, and the EB-5 Investment Offerer.

On 7 December 2015, the U.S. Securities and Exchange Commission issued a Cease-and-Desist Order against Wang. The SEC determined that Wang had violated Section 15(a)(1) of the Exchange Act, which makes it unlawful for anyone not associated with a registered broker or dealer to make use of the mails or any instrumentality of interstate commerce “to effect any transactions in, or to induce or attempt to induce the purchase or sale of, any security” unless such party is registered in accordance with the Act. Wang was not associated with a registered broker or dealer. As a result, the SEC required that Wang:  cease and desist from committing or causing any violations of Section 15(a)(1); and pay disgorgement of $40,000, prejudgment interest of $1,590, and a civil money penalty of $25,000.

Wang, Limin (People’s Republic of China)

A Summary Suspension Hearing Panel convened on 5 November 2008 upheld the Summary Suspension of Limin Wang.

On 27 March 2008, the China Securities Regulatory Commission imposed on Mr. Wang a bar for an indefinite period of time from registration under the securities laws or similar laws relating to the investment decision-making process (“industry bar”), as discussed in Article 11.3(d) of the CFA Institute Bylaws.

In accordance with Rule 7.2(b) of the CFA Institute Rules of Procedure, an automatic Summary Suspension shall be imposed if a Covered Person is the subject of an industry bar. At Mr. Wang’s request a Summary Suspension Hearing Panel was convened to review the imposition of the Summary Suspension. The Hearing Panel upheld the Summary Suspension. The Summary Suspension constitutes Mr. Wang’s removal from membership in CFA Institute and Member Societies, and removal of the right to use the CFA designation.

Wang, Xujia (USA)

On 12 February 2008, CFA Institute imposed a Summary Suspension against Xujia Wang, pursuant to Article 11.3(c) of the CFA Institute Bylaws and Rule 7.3 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct. Summary Suspension automatically suspends Ms. Wang’s CFA Institute membership and right to use the CFA designation. Ms. Wang pleaded guilty in the United States District Court (Southern District of New York) to one count of conspiracy to commit securities fraud and three counts of insider trading, which are felonies.

West, David E. (US)
Effective 13 March 2017, David E. West (Homer Glen, Illinois), a lapsed charterholder member, Permanently Resigned his right to reactive his membership in CFA Institute and any member societies, and his right to use the CFA designation, during the course of a Professional Conduct investigation.
Williams, Mark B. (U.S.)

On 17 May 2012, the CFA Institute Designated Officer imposed a Summary Suspension on Mark B. Williams (U.S.), a charterholder member, automatically suspending his CFA Institute membership and right to use the CFA designation. Williams was suspended for his failure to cooperate with a Professional Conduct Program investigation. Because he did not request a review within the time provided under the Rules of Procedure, the summary suspension automatically became a permanent revocation on 18 June 2012.

Willman, Andrew (Canada)

On July 31, 2000, AIMR summarily suspended Andrew Willman’s membership in AIMR and membership in The Toronto Society of Financial Analysts, pursuant to Article 12.3(g) of AIMR's Bylaws and Rule 7.4 of AIMR's Rules of Procedure for Proceedings Related to Professional Conduct. Mr. Willman failed to submit information requested relating to professional conduct and activities.

Wilt, Michael, R. (US)

Effective 18 October 2016, CFA Institute imposed a Five-Year Suspension of membership and the right to use the CFA designation on Michael R. Wilt (Grafton, Wisconsin), a charterholder member. A hearing panel found that Wilt violated the CFA Institute Code of Ethics, Standard of Professional Conduct I(C) – Misrepresentation (2005, 2010, and 2014), and Section 3.5(a)(i) of the Bylaws. This result was affirmed by an appeal panel.

The hearing panel found that over the course of nearly a decade, Wilt repeatedly provided false information in his annual Professional Conduct Statements. Namely, despite having been informed in 2006 by his former employer that he was the subject of a written customer complaint regarding his professional conduct, Wilt filed Professional Conduct Statements in 2007 and 2008 in which he falsely represented that he was not the subject of a written complaint. 

In 2011, Wilt was named as a defendant in an arbitration claim by his former firm to recover money that he had borrowed. Despite having an obligation to disclose the matter to CFA Institute, Wilt represented in the Professional Conduct Statements that he filed in 2011 and 2012 that he was not the subject of an arbitration or other action in which his professional conduct was at issue. In doing so, Wilt affirmatively stated that his responses were “truthful, accurate, and complete.” 

In July 2012, the Financial Industry Regulatory Association (FINRA) suspended Wilt’s association with any FINRA member firm for failing to pay the arbitration award to his former employer. As he had on four previous Professional Conduct Statements, Wilt failed to make accurate disclosures in the Professional Conduct Statements that he filed with CFA Institute in 2013 and 2014. Instead, Wilt misrepresented that he had not been suspended from working or participating in the securities industry, and he misled CFA Institute by stating that his responses and all information provided by him on his Professional Conduct Statements were “truthful, accurate, and complete."

Winet, Dieter (Switzerland)

Effective 20 November 2015, CFA Institute imposed a Revocation of membership and of the right to use the CFA designation on Dieter Winet (Switzerland), a charterholder member. A Hearing Panel found that Winet violated the Code of Ethics and Standards of Professional Conduct: I(D) - Misconduct; II(A) - Material Nonpublic Information; and VI(B) - Priority of Transactions (2005). This result was subsequently reviewed and affirmed by an Appeal Panel.

The Hearing Panel found that, over a five-year period, Winet provided advance information to three accomplices as to when he was planning to buy or sell sizeable blocks of stocks on behalf of the funds he managed at Swisscanto. This information was material and non-public, and could affect the value of the stocks. Winet’s accomplices then used the information he provided to establish corresponding long or short positions in the stocks ahead of Winet’s trades. Winet would then enter his orders, which would often impact the market price by several percentage points and enable his accomplices to liquidate their positions and realize illicit profits, which they later shared with him as “kickbacks” or secret cash payments.

Winet estimated that he and his accomplices engaged in such “front running” trades 500 to 1,000 times. An independent accounting firm later reviewed the trading and identified 1,359 corresponding profit-generating trades by the group, and determined the total amount of damages to be 5.3 million Swiss francs.

Wohl, Howard (US)

Effective 30 March 2017, CFA Institute imposed a Revocation of membership and of the right to use the CFA designation on Howard Wohl (Mill Neck, New York), a charterholder member. 

In September 2016, a Hearing Panel determined that:  from December 1998 through December 2005, Wohl violated CFA Institute Standards of Professional Conduct I(A) – Fundamental Responsibilities, II(B) – Professional Misconduct, IV(B.1) – Fiduciary Duties, and IV(B.6) – Prohibition Against Misrepresentation (Seventh and Eighth Editions, 1996 and 1999); and from January 2006 through December 2008, he violated Standards I(A) – Knowledge of the Law, I(C) – Misrepresentation, and III(A) – Loyalty, Prudence, and Care (Ninth Edition, 2005). The Hearing Panel imposed a two-year suspension of Wohl’s membership in CFA Institute and right to use the CFA designation. 

Wohl appealed the Hearing Panel’s decision. The Appeal Panel reviewed the matter and affirmed the Hearing Panel’s findings of fact and conclusions as to violations, but increased the sanction to a Revocation.  

Wohl, a CFA charterholder since 1996, was a founder and principal of Ivy Asset Management, a New York-based investment advisory firm. In 1987, Ivy began investing clients’ funds with BLM Securities, run by Bernard L. Madoff. As time went on, Ivy introduced several funds to Madoff. These “feeder” funds paid 50% of their fees to Ivy in exchange for providing due diligence and advice as to manager selections, allocations of assets, reviews of trading, and other matters. 

With Ivy’s knowledge, the feeder funds marketed Ivy's due diligence on Madoff through offering memoranda sent to the pension plans of county employees, carpenters, plumbers, construction workers, and others for whom they invested. Separate and apart from his potential obligations under the U.S. Employee Retirement Income Security Act of 1974 (”ERISA”), the Hearing Panel found that under the CFA Institute Standards, Wohl owed a fiduciary duty to the feeder funds that Ivy advised that invested in Madoff, and to the retirement plans that invested in those funds.

The Hearing Panel found that, over time, Wohl and others at Ivy had increasing concerns about Madoff, which they discussed internally. While they disclosed some general concerns to their direct pension fund clients and to the feeder funds they advised, they never disclosed other serious and growing concerns, such as: that Madoff might be improperly subsidizing his reported investment returns; that Madoff might be engaged in “fraudulent conduct” and “making it up”; and that Madoff could even be engaged in a “Ponzi” scheme.  In 1998 -- ten years before Madoff’s arrest -- Wohl recommended that Ivy withdraw all direct investments and support for investing in Madoff, but the idea was quickly rejected for fear of losing the Madoff-related fees and substantial assets under management. 

While harboring these serious and increasing concerns, Wohl and Ivy misrepresented to their direct pension fund clients and the feeder funds that they had no reason to believe that Madoff was doing anything improper. And to the pension plans that invested in the feeder funds that Ivy advised, Wohl and the firm said nothing regarding their concerns.

Beginning in 1993, in the offering memoranda provided to pension plans to induce investments in the feeder funds, Ivy held itself out as an investment advisor or consultant responsible for researching and evaluating portfolio managers, including Madoff. The Hearing Panel found that from 2000 to 2006, Wohl and Ivy no longer had direct access to Madoff, which limited their ability to perform due diligence. By 2007, Wohl and Ivy had stopped doing any due diligence on Madoff and had determined that he was no longer an approved manager. However, Wohl and Ivy made no effort to correct the offering memoranda to make clear to the feeder funds and the pension plans that the representations about Ivy’s due diligence efforts were no longer true.

 

Wood, James (Canada)

On 8 March 2017, CFA Institute imposed a Summary Suspension on James Wood (Charlottetown, Prince Edward Island, Canada), a lapsed charterholder member, automatically suspending his membership and right to use the CFA designation. Because he did not request a review, the summary suspension became a Revocation on 6 April 2017.

Wood was suspended for his failure to cooperate with a Professional Conduct investigation into findings by the Investment Regulatory Organization of Canada that he failed to use due diligence to learn and remain informed of the facts relative to a client and made recommendations to the client that were unsuitable. Because Wood did not cooperate in its investigation, Professional Conduct was unable to determine whether he violated the CFA Institute Code and Standards.    

Xu, Chunmao (People's Republic of China)

On 3 November 2011, CFA Institute imposed a Summary Suspension on Xu Chunmao (People’s Republic of China).

Because there was no request for review, on 4 December 2011 the summary suspension automatically became a permanent prohibition from further participation in the CFA Program.According to the official government news release, from 2006 to 2010, Chunmao tipped three of his university classmates with inside information regarding stock purchases by funds operated by Everbright Pramerica Fund Management, his former employer. The group then used the information to trade in advance of Everbright’s purchases. The group traded in a total of 68 stocks with a combined investment of more than CNY95 million. Chunmao reportedly made more than CNY2.01 million in profits from the illegal trading. As a result, he was sentenced to three years’ imprisonment and fined CNY2.1 million for illegal insider trading.

Yost, Mark H. (U.S.)

On 31 March 2011, CFA Institute imposed a Summary Suspension on Mark H. Yost (U.S.), a charterholder member, which automatically suspended his CFA Institute membership and right to use the CFA designation.

In February 2011 Yost pleaded guilty in the U.S. District Court for the District of Colorado to four counts of making false statements to banks and to one count each of wire fraud, bank fraud, and money laundering. On 12 May 2011, Yost was sentenced to 78 months in federal prison followed by 60 months of supervised release. He was also ordered to pay nearly US$11 million in restitution to defrauded customers.

Beginning in 2005, Yost began misrepresenting the total assets held in a hedge fund he ran. By 2009, Yost reported total assets of more than US$28 million when in fact the total amount under management was more than US$1 million. Yost sent investors statements with false information that led them to believe their investments were growing. During this period, Yost also diverted nearly US$1.8 million from the investment fund for his own use. Yost also used his position as chairman of a bank to forge signatures of individuals without their knowledge on promissory notes, loan agreements, and bank forms to obtain lines of credit from the bank he chaired worth more than US$3.8 million. He also took out millions more in loans from other banks that were never repaid.

Young, Phua K. (U.S.)

On 9 January 2008, CFA Institute imposed the sanction of Revocation of CFA Institute Membership and Member Societies and Revocation of the Right to Use the CFA Designation upon Phua K. Young (the “Member”), pursuant to a Stipulation and Consent for Disciplinary Action.

CFA Institute has found that the Member violated the CFA Institute Code of Ethics and Standards II (B) – Professional Misconduct, III(C) – Disclosure of Conflicts to Employer, IV (A.1) – Reasonable Basis and Representations, IV (A.3) – Independence and Objectivity, IV (B.3) – Fair Dealing, and V (A)- Prohibition Against Use of Material Nonpublic Information of the CFA Institute Code of Ethics and Standards of Professional Conduct [1999].

The Member violated the Code of Ethics and Standards of Professional Conduct by (a) sharing unpublished research reports and ratings with certain institutional investors and an issuer; (b) disseminating material, nonpublic information to selected institutional investors; (c) issuing and publishing research that did not provide a sound basis for evaluating facts, contained unwarranted, unbalanced or misleading statements about the company and opinions about target prices for which there was no reasonable basis, was not based on principles of fair dealing and good faith, and failed to disclose material risks; (d) giving and receiving improper gifts; and (e) failing to abide by his employer’s compliance policies.

The Member has consented to the sanction described above and to the publication of this notice.

Yu, Run (People's Republic of China)

On 28 June 2011, a Hearing Panel imposed a Revocation of CFA Institute membership and the right to use the CFA designation on Run Yu (People’s Republic of China), a charterholder member. The Hearing Panel found that Run Yu violated the Standards I – Fundamental Responsibilities, II(B) – Professional Misconduct, II(C) – Prohibition against Plagiarism, and III(E) – Responsibilities of Supervisors (1999), and Standards I(A) – Knowledge of the Law, I(D) – Misconduct, IV(C) – Responsibilities of Supervisors, and VII(A) – Conduct as Members and Candidates in the CFA Program of the CFA Institute Code of Ethics and Standards of Professional Conduct (2005).

From 2004 to 2007, Run Yu organized and participated with others in a scheme to misappropriate confidential, proprietary, and copyrighted materials pertaining to the CFA examination. He then used (and allowed others to use) the stolen materials to promote and conduct a business that provided examination preparation courses for CFA candidates. In doing so, Run Yu knowingly and deliberately acted (and conspired with others whom he supervised) to use dishonest and deceptive means to record and photograph CFA examination questions and undermine the security and integrity of the CFA Program.

Zerfoss, David (U.S.)
On 11 May 2004, CFA Institute imposed a Summary Suspension against David Zerfoss, pursuant to Article 12.3(c) of the CFA Institute Bylaws and Rule 7.3 of the CFA Institute Rules of Procedure for Proceedings Related to Professional Conduct.  Summary Suspension automatically suspends Mr. Zerfoss’ CFA Institute membership, membership in a member society, and right to use the CFA designation. Mr. Zerfoss pleaded guilty in the United States District Court of Hawaii to a violation of Title 18, U.S.C. §2252(a)(4), which is a felony.
Zhao, Mingchao (Canada)
On 2 June 2014, CFA Institute imposed a Summary Suspension on Mingchao Zhao (Canada), a lapsed affiliate member, automatically suspending his membership. Because he did not request a review, the Summary Suspension became a Revocation on 3 July 2014.

Zhao admitted to engaging in illegal insider trading between June 2010 and December 2011. On 17 May 2013, the Ontario Securities Commission (OSC) approved a settlement agreement under which Zhao was: permanently prohibited from trading securities; permanently prohibited from becoming or acting as a director or officer of an investment fund manager; and permanently prohibited from becoming or acting as a registrant, investment fund manager or promoter. In addition to the permanent prohibitions, Zhao was ordered to pay OSC a C$750,000 administrative penalty, disgorge C$416,719 in profits, and pay C$30,000 in costs.