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Reports US

US stock market daily report (January 08, 2014, Wednesday)

January 9, 2014, Thursday, 16:11 GMT | 12:11 EST | 21:41 IST | 00:11 SGT
Contributed by Millennium Traders

The Securities and Exchange Commission and the special inspector general for the Troubled Asset Relief Program are probing whether a number of Wall Street banks cheated clients in the years following the financial crisis, by deliberately mispricing a type of mortgage bond that was central to the economic turmoil. Subpoenas have been issued to several firms for fact finding in the investigation. The federal probe is focused on whether traders working for noted firms, bought or sold residential mortgage-backed securities at artificially depressed or inflated values from 2009 through 2011. Banks under investigation and under scrutiny include Barclays PLC, Citigroup, Inc. (C-NYSE), Deutsche Bank AG, Goldman Sachs Group, Inc. (GS-NYSE), JPMorgan Chase & Co. (JPM-NYSE), Morgan Stanley (MS-NYSE), Royal Bank of Scotland Group PLC and UBS AG.

Aronson, Buonauro and Aaron Ponzi Scheme
U.S. District Court Judge Jed S. Rakoff has ruled that Defendant Eric Aronson violated the antifraud as well as other provisions of the federal securities laws per the Securities and Exchange Commission on Wednesday. Aronson was held liable by the Court, for Operating a Ponzi Scheme. The court entered permanent injunctions against Defendants Vincent Buonauro and Fredric Aaron plus, officer, director and penny stock bars were entered against Aaron. Aronson's wife, Relief Defendant Caroline Aronson, was ordered by the court to disgorge ill-gotten gains she received from her husband.

In October 2011, the SEC filed a complaint which alleged that, PermaPave Industries and affiliates raised more than $26 million from the sale of promissory notes and "use of funds" agreements to over 140 investors between the years of 2006 to 2010. Under the false pretense that there was a tremendous demand for permeable paving stones, per Eric Aronson, Vincent Buonauro and others, investors were told that they would be repaid from the profits generated by guaranteed product sales. All the while, there was 'little' demand for permeable paving stones. Defendants used investors' money to make "interest" and "profit" payments to earlier investors and to fund the lavish lifestyles of management. Eric Aronson, Fredric Aaron - attorney for Eric Aronson and entity defendants - issued a press release stating that a company was investing $6 million in Interlink-US-Network, Ltd., purportedly a company that never hear of Interlink when in reality, the investor was an affiliate of PermaPave Industries which had already acquired a majority stake in Interlink

The Court granted in part, the SEC's motion for summary judgment on August 6, 2013. The SEC proved an "almost endless fraud" of Buonauro and Aronson with evidence they raised millions from investors, misappropriated the funds raised and then converted the investments several times over to delay and ultimately avoid repayment. The Court ruled that Aronson, a resident of Syosset, New York, violated Sections 5 and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 there under.

On December 11, 2013, the Court granted the SEC's motion for reconsideration of the Court's summary judgment order and ruled that Eric Aronson also violated Section 20(e) of the Exchange Act by aiding and abetting Interlinks violations of Exchange Act Sections 10(b) and 13(a) and Rules 10b-5, 12b-20 and 13a-11. Summary judgment on the SEC's claim for disgorgement against Caroline Aronson, resident of Syosset, New York, was granted by the Court, for her to pay full disgorgement amount sought, $296,262. The Court issued judgments to Vincent Buonauro of West Islip, New York and Fredric Aaron of Plainview, New York on December 23, 2013. Judgment on Buonauro enjoins him from violating Securities Act Sections 5 and 17(a) and Exchange Act Sections 10(b) and 15(a) and Rule 10b-5. Judgment on Aaron enjoins him from violating Exchange Act Section 10(b) and Rule 10b-5, from aiding and abetting violations of Exchange Act Section 13(a) and Rules 12b-20 and 13a-11 and imposes a five year bar from officer, director and penny stocks.