SEC v. J.H. Darbie & Co., Inc., No. LR-25844, Southern District of New York (Sept. 22, 2023) — Press Release
raw: J.H. Darbie & Co., Inc.
J.H. Darbie & Co., Inc., No. LR-25844 (S.D.N.Y. Sept. 22, 2023)
summary
J.H. Darbie & Co., Inc. obtained a final consent judgment for failing to report suspicious penny stock transactions, resulting in a $125,000 penalty and a compliance consultant.
paragraph
J.H. Darbie & Co., Inc. faced SEC charges for failing to file Suspicious Activity Reports (SARs) related to tens of billions of shares of penny stocks traded between 2018 and 2020. The firm was charged with violating Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 due to inadequate anti-money laundering oversight. The final judgment requires the brokerage to pay a $125,000 civil penalty and retain an independent anti-money laundering compliance consultant.
narrative
The SEC obtained a final consent judgment against New York-based brokerage firm J.H. Darbie & Co., Inc. for failing to report suspicious activity involving tens of billions of shares of penny stocks. Between January 2018 and January 2020, the firm failed to investigate and file required Suspicious Activity Reports (SARs) despite internal red flags and regulatory guidance. To resolve the matter, the firm agreed to a permanent injunction against violating Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8. J.H. Darbie must pay a $125,000 civil penalty and retain an independent anti-money laundering compliance consultant. The firm entered this judgment without admitting or denying the SEC's allegations. This enforcement action was led by the SEC's New York Regional Office.
Classified broker-dealer-fraud(confidence 95%). EDGAR detection: forms Form D· recall 29% / precision 9%. detection rule →
Statutes
Parties
Securities and Exchange CommissionJ.H. Darbie & Co., Inc.
Keywords
darbiesecurities exchangeanti-money launderingsecuritiesnewsec'sincfinalsuspicioustransactionsexchange commissionbrokerage firmsuspicious activitysuspicious transactionsinvestigation conducted
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 1
- $125K $125,000 $100K–$1M
Entities 15
- person Alison Conn
- person christine d. ely
- person Christopher Colorado
- person daphne downes
- person Eleni Stalzer
- company j.h. darbie & co., inc.
- organization J.H. Darbie & Co., Inc.
- scheme_term j.h. darbie & co., inc. for anti-money laundering violations
- person linda lettieri
- person Michael Altschuler
- agency Securities and Exchange Commission
- person Stephanie Buonaguro
- person Suzanne Bettis
- person Thomas P. Smith, Jr.
- person victor suthammanont
Triples 7
- U.S. Securities And Exchange Commission obtained final judgment J.H. Darbie & Co., Inc. for anti-money laundering violations
- J.H. Darbie & Co., Inc. failed to investigate and file Suspicious Activity Reports for transactions in tens of billions of penny stocks
- J.H. Darbie & Co., Inc. consented to a final judgment permanently restraining it from violating Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8
- J.H. Darbie & Co., Inc. was ordered to pay a civil penalty of $125,000 and retain an independent anti-money laundering compliance consultant
- Securities And Exchange Commission conducted litigation by Christopher Colorado, Victor Suthammanont, and Suzanne Bettis, supervised by Thomas P. Smith, Jr.
- Securities And Exchange Commission conducted investigation by Christine D. Ely, Suzanne Bettis, and Alison Conn, with assistance from Daphne Downes, supervised by Thomas P. Smith, Jr.
- Securities And Exchange Commission conducted examination by Michael Altschuler, Stephanie Buonaguro, Linda Lettieri, and Eleni Stalzer
PDF (from attached: judgment)
Text layers
Extracted body text (2,220c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25844 / September 22, 2023 Securities and Exchange Commission v. J.H. Darbie & Co., Inc., No. 1:22-civ-10482-JHR (S.D.N.Y. filed December 12, 2022) SEC Obtains Final Judgment Against Brokerage Firm Charged with Anti-Money Laundering Violations On September 13, 2023, the U.S. District Court for the Southern District of New York entered a final consent judgment against J.H. Darbie & Co., Inc., a New York City-based brokerage firm, in connection with its alleged failure to report suspicious activity related to transactions in tens of billions of shares of low-priced securities - or "penny stocks" - that were traded in over-the-counter markets. To help detect potential securities law and money-laundering violations, broker-dealers are required to file Suspicious Activity Reports (SARs) describing suspicious transactions taking place through their firms. According to the SEC's complaint, filed on December 12, 2022, from at least January 2018 to January 2020, J.H. Darbie failed to investigate and file SARs for numerous suspicious transactions, even when the transactions raised red flags recognized in J.H Darbie's written anti-money laundering policies and procedures and in regulatory guidance. Without admitting or denying the allegations of the SEC's complaint, J.H. Darbie consented to the entry of a final judgment permanently restraining and enjoining it from violating Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder, and ordering the firm to pay a civil penalty of $125,000 and to retain an independent anti-money laundering compliance consultant. The SEC's litigation was conducted by Christopher Colorado, Victor Suthammanont, and Suzanne Bettis and was supervised by Thomas P. Smith, Jr., of the New York Regional Office. The SEC's investigation was conducted by Christine D. Ely, Ms. Bettis, and Alison Conn, with assistance from Daphne Downes, of the New York Regional Office, and was supervised by Mr. Smith. The SEC's examination that led to the investigation was conducted by Michael Altschuler, Stephanie Buonaguro, Linda Lettieri, and Eleni Stalzer, of the New York Regional Office. Final Judgment
OCR text (2,220c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25844 / September 22, 2023 Securities and Exchange Commission v. J.H. Darbie & Co., Inc., No. 1:22-civ-10482-JHR (S.D.N.Y. filed December 12, 2022) SEC Obtains Final Judgment Against Brokerage Firm Charged with Anti-Money Laundering Violations On September 13, 2023, the U.S. District Court for the Southern District of New York entered a final consent judgment against J.H. Darbie & Co., Inc., a New York City-based brokerage firm, in connection with its alleged failure to report suspicious activity related to transactions in tens of billions of shares of low-priced securities - or "penny stocks" - that were traded in over-the-counter markets. To help detect potential securities law and money-laundering violations, broker-dealers are required to file Suspicious Activity Reports (SARs) describing suspicious transactions taking place through their firms. According to the SEC's complaint, filed on December 12, 2022, from at least January 2018 to January 2020, J.H. Darbie failed to investigate and file SARs for numerous suspicious transactions, even when the transactions raised red flags recognized in J.H Darbie's written anti-money laundering policies and procedures and in regulatory guidance. Without admitting or denying the allegations of the SEC's complaint, J.H. Darbie consented to the entry of a final judgment permanently restraining and enjoining it from violating Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder, and ordering the firm to pay a civil penalty of $125,000 and to retain an independent anti-money laundering compliance consultant. The SEC's litigation was conducted by Christopher Colorado, Victor Suthammanont, and Suzanne Bettis and was supervised by Thomas P. Smith, Jr., of the New York Regional Office. The SEC's investigation was conducted by Christine D. Ely, Ms. Bettis, and Alison Conn, with assistance from Daphne Downes, of the New York Regional Office, and was supervised by Mr. Smith. The SEC's examination that led to the investigation was conducted by Michael Altschuler, Stephanie Buonaguro, Linda Lettieri, and Eleni Stalzer, of the New York Regional Office. Final Judgment