The directors of a Miami-based Brickell-based financial services firm and the official beneficiaries of their shenanigans are paying $5.7 million in fines and penalties to settle Securities ‘cherry picking’ charges and Exchange Commission.
In addition, UCB Financial Advisors chairwoman Lina Maria Garcia, 50, is suspended from the financial services industry for a year while director Ramiro Jose Sugranes, 59, is banned from the industry.
State records indicate that UCB Financial Advisors (disconnected number) remains an active company and legally Sugranes and Garcia are not admitting anything. But common sense draws other conclusions when people who have paid their bills for 20 years working in the financial consulting industry pay millions of dollars and accept exile in the financial sector.
READ MORE: SEC asset freeze, fraud charges for UCB Financial and its directors
Cherry picking fruits according to the SEC
Sugranes registered UCB Financial Advisors with the state of Florida in 2005, a year after, the SEC complaint noted, he resigned from a brokerage position after failing to follow company policy on documentation of activities on a parent’s account. Garcia joined UCB, which includes UCB Advisors and UCB Services (“UCB entities” in the Complaint), as President and Chief Compliance Officer in 2006. It is her job to ensure that schemes such as those alleged by the SEC do not occur.
“[Sugranes] executes the selection scheme by first using an average price trading account used by the UCB Entities to purchase stocks and options on behalf of numerous client accounts,” the SEC complaint stated. “Sugranes then assigns these transactions to specific accounts, usually later the same day.
“If the position increases in value during that day, the position is usually closed, thereby locking in the same day’s profit, and the opening and closing trades and corresponding profits are allocated to one of the privileged accounts” , continues the complaint. . “If the value of trades decreases during that day, the position (which is worth less at the time of allocation than it was at the time of purchase and, therefore, has a loss on the first day) is usually attributed to [the account(s) of] one or more other clients of the UCB Entities.
The complaint says doing this with stocks and options resulted in privileged accounts racking up $4,629,814 in first-day gains while non-preferred accounts suffered losses of $5,575,130.
Names on privileged accounts: Ramiro Sugranes Hernandez and Thelma Lanzas De Sugranes, parents of Sugranes.
Punishments and payments from Sugranes and Garcia
Federal court documents in Miami indicate that these are punitive actions against Sugranes, Garcia and her parents.
▪ Sugranes and her parents are liable for a refund of $2,255,672 plus interest of $382,562. This was supported by transferring $2,377,099 to an Insigneo Securities brokerage account and $261,135 to an Apollo Bank account in the names of Sugranes’ parents.
▪ Sugranes and Garcia are liable for a refund of $225,718 plus interest of $38,282 and a civil penalty of $100,000. They must also sell their stake in the companies Tigressa, LLC and Toscana Divino before February (and cannot sell them to a relative).
▪ Sugranes alone will pay $2,118,610 in restitution plus interest of $359,316 and a civil penalty of $500,000.
▪ Each UCB Entity will pay a civil penalty of $500,000.
▪ Garcia is suspended until next October from “association with any nationally recognized broker, trader, investment adviser, municipal stockbroker, councilor, transfer agent or statistical rating organization; and suspended from participating in any offering of a penny stock…”
▪ Sugranes is “disclaimed from any association with any nationally recognized stockbroker, trader, investment adviser, municipal securities dealer, councilor, transfer agent or statistical rating organization”.
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