SEC Charges Transfer Agent and Its Principal with Fraud for Misappropriating Client Funds
Last week, the SEC filed a complaint in U.S. District Court for the District of Nevada against Quicksilver Stock Transfer, LLC, a Las Vegas-based registered transfer agent, and its president and sole owner, Alan Shinderman alleging that they misappropriated approximately $630,000 of client funds.
The SEC alleged that, in August 2013, Quicksilver received wire transfers totaling $1.45 million for the benefit of China Energy Corporation. The funds were destined for certain of China Energy’s shareholders by way of Depository Trust & Clearing Corporation (DTCC). The complaint alleges that Shinderman diverted approximately $630,000 of this money for his and Quicksilver’s own use and benefit, including $500,000 to make a four-day loan to a Nevada real estate company. According to the complaint, the borrower failed to repay the principal or interest as planned. Consequently, Quicksilver and Shinderman did not timely forward China Energy’s funds to DTCC, despite repeated requests. Quicksilver and Shinderman also made a series of misrepresentations in response China Energy’s and DTCC’s requests for the funds. Quicksilver ultimately paid DTCC approximately six weeks later, after recovering the loan principal from the real estate company. The complaint also alleges that Quicksilver untimely filed an independent accountant’s report with the SEC on January 13, 2015, for the period ending December 31, 2013.
The SEC’s complaint charges Quicksilver with violations of Sections 10(b) and 17A(d) of the Securities Exchange Act of 1934 and Rules 10b-5, 17Ad-12 and 17Ad-13 thereunder and Shinderman with violations of Section 10(b) and Rule 10b-5 and for aiding and abetting Quicksilver’s violations of Section 17A(d) and Rules 17Ad-12 and 17Ad-13. The SEC complaint seeks permanent injunctions and the imposition of civil penalties.
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