Morgan Stanley paid $9.5 million for hiding 14.5 million e-mails sought by the SEC in connection with an investigation back in 2006. Citigroup pays $720 million based upon the $71 bilion in toxic securities linked to mortgages it sold to the public. Charles Schwab paid $200 mllion in connection with the YieldPlus fiasco where it made $500 million. Examples are endless, but for the big guys, represented typically by lawyers caught in the revolving door between stints as regulators and as $1500 per hour big law partners, fraud generally pays, and in most instances, enforcement actions are settled by agreements to pay fines and penalties which are often just fractions of what the firm made, and usually only after the statute of limitations runs on investor claims.
Of course, no one gets charged criminally or goes to jail. Unless you are Bernie Madoff and actually steal or misapproprate customer funds, no one ever gets charged criminally or ever goes to jail.
Such is not the case for Charles J. Moore. Following at least five unpaid tax liens, Moore became the founder, president and owner of Crucible Capital Corporation in New York.
Crucible had no customer accounts, but purported to be a a “boutique” micro-cap investment bank helping smallbusinesses to raise capital and financing. Moore also owned Angelic Holdings LLC, which supposedly conducted “due diligence” for Crucible. Angelic and Crucible shared the same office space and same employees.
Crucible, however, was having some net capital problems, and instead of accruing its own expenses, it requested that vendors issue invoices to Angelic for Crucible expense. Using this false information, Crucible through Moore, filed monthly FOCUS Reports filed with the SEC falsely representing that it had the requisite net capital to continue holding itself out as a registered broker-dealer.
In fact, Crucible had a negative net capital. When the SEC asked to see copies of vendor invoices directed to Crucible and Angelic, Moore caused a Crucible employee to deliver falsified invoices intended to make it appear as if Crucible and Angelic were both current on their bills. In August 2014, the SEC brough a regulatory action against Moore and Crucible, and in February 2016, an final cease and desist order was entered against Moore.
However, on August 14, 2014, Moore was charged criminally by the United States Postal Inspectors with three counts of Obstruction of Regulatory Examination, Making False Statements to the Executive Branch, and Falsifying and Failing to Keep Books and Records of a Broker-Dealer. United States v. Moore, 1:14-mj-01739-UA (S.D.N.Y).
If convicted, Moore, age 62, would have faced 45 years in prison. Twenty years on each on the obstruction and falsifying records count and five 5 years on the false statement charge. On November 9, 2015, Moore plead guilty to one count of obstruction of a regulatory examination and now only faces a maximum of 20 years in prison.
