PAUSE Before You Invest – SEC’s PAUSE Program Informs Investors

SEC Enhances Its PAUSE Website Where SEC Provides a List of Entities That Falsely Claim to Be Registered, Licensed, and/or Located in the United States, As Well As Entities That Impersonate Genuine U.S. Registered Securities Firms and Fictitious Regulators, Governmental Agencies or International Organizations. 

Kehoe Law Firm, P.C. is making investors aware that on February 24, 2020, the SEC announced that it updated its Public Alert: Unregistered Soliciting Entities (“PAUSE”) list by adding 25 soliciting entities and four fictitious regulators.  The PAUSE Program lists entities that falsely claim to be registered, licensed, and/or located in the United States in their solicitation of investors. The PAUSE Program also lists entities that impersonate genuine U.S. registered securities firms as well as fictitious regulators, governmental agencies, or international organizations.

According to the SEC, the entities on the PAUSE list have been the subject of investor complaints.  The latest additions are firms that SEC staff found were providing inaccurate information about their affiliation, location, or registration to solicit primarily non-U.S. investors. Under U.S. securities laws, firms that solicit investors, generally, are required to register with the SEC and meet minimum financial standards and disclosure, reporting, and record keeping requirements. Additionally, besides alerting investors to firms falsely claiming to be registered, the PAUSE list flags those impersonating registered securities firms and fictitious “regulators” who falsely claim to be government agencies or affiliates.  The SEC stated that inclusion on the PAUSE list does not mean the SEC has found violations of U.S. federal securities laws or made a judgment about the merits of any securities being offered.

Key Sections of the SEC’s PAUSE List 
Unregistered Soliciting Entities

These are entities that falsely claim to be registered, licensed, and/or located in the United States in their solicitation of investors.  In many cases, SEC investigation reveals that the soliciting entities are not registered in the United States as they claim or imply. For each of the entities listed, the SEC has determined that there is no U.S. registered securities firm with this name.  The SEC stated that it will regularly update this list.

Fictitious Regulators

These are entities that falsely claim to be a regulator, governmental agency, or international organization that do not exist.  In many cases, SEC investigation reveals that the so-called governmental agencies or international organizations claimed to have lent support to these solicitations do not exist.  The SEC stated that it will regularly update this list.

Impersonators of Genuine Firms

These are legitimate entities/firms whose information was wrongfully appropriated. This information may include the legitimate entity’s name, address, registration number, and website likeness. According to the SEC, the information was wrongfully appropriated from publicly-available databases, such as EDGAR and FINRA’s BrokerCheck, and  phony websites were set up to confuse and deceive investors. In other cases, these “spoofer” entities have appropriated the registration information of legitimate firms that recently terminated registration with the SEC and FINRA, or did so years ago. Similarly, representatives of the impersonating entities who cold-call investors often claim to be licensed employees of the legitimate firms being impersonated or of other legitimate firms.  The SEC has determined that the impersonators have no connection with, and are not to be confused with, the genuine firms, whether active or defunct. The SEC stated that it will regularly update this list.


Kehoe Law Firm, P.C.

Unwanted Telemarketing Calls – TCPA Action – Sunlight Solar, Inc.

Kehoe Law Firm, P.C. is making consumers aware of the following Telephone Consumer Protection Act (“TCPA”) class action lawsuit filing:

Class action lawsuit filed on February 21, 2020 against Sunlight Solar, Inc. and other defendants, as of yet unknown, in United States District Court, Southern District of California, for, allegedly, “negligently, and/or willfully contacting Plaintiff for marketing purposes on his cellular telephone, in violation of the Telephone Consumer Protection Act . . . thereby invading Plaintiff’s privacy.”

According to the class action complaint, “Sunlight Solar, a solar panel installation company, attempts to solicit solar power services to consumers through the use of electronic communication and telephone calls.” Sunlight Solar, according to the complaint, contacted Plaintiff’s cellular telephone from (619) 768-2391.  Allegedly, Sunlight Solar contacted Plaintiff on January 27, 2020, as well as “multiple other instances, in an effort to convince Plaintiff to purchase solar panels.” The “unwanted calls” made to Plaintiff’s cell phone, allegedly, “were unsolicited . . . and were placed without Plaintiff’s prior express written consent or permission.”

Do You Believe You Are a Victim of Illegal Robocalls, Text Messages, “Junk” Faxes or Telemarketing Sales Calls?

If you have received illegal robocalls, text messages, “junk” faxes or telemarketing sales calls, you may be able to recover at least $500 for each illegal call, text or fax you received and, possibly, as much as $1,500 for each illegal call, text message or facsimile that was made either willfully or knowingly in violation of the Telephone Consumer Protection Act.

To help evaluate your potential legal claims under the Telephone Consumer Protection Act, please complete KLF’s confidential Robocall Questionnaire or, if you prefer to speak with an attorney, please complete the form above on the right, e-mail [email protected] or contact Michael Yarnoff, Esq., [email protected], (215) 792-6676, Ext. 804, for a free, no-obligation evaluation of your potential legal rights.

Kehoe Law Firm, P.C.

Wells Fargo to Pay $500 Million – Part of Combined $3 Billion Settlement

Wells Fargo Has Agreed to Pay $500 million to Settle Charges; Money Will Be Returned to Investors. $500 Million Is Part of a Combined $3 Billion Settlement With the SEC and the Department of Justice.

Kehoe Law Firm, P.C. is making investors aware that on February 21, 2020, the SEC announced that Wells Fargo & Co. has been charged for misleading investors about the success of its core business strategy at a time when it was opening fake accounts for unknowing customers and selling unnecessary products that went unused. The SEC announced that Wells Fargo has agreed to pay $500 million to settle the charges, which will be returned to harmed investors. The $500 million payment is part of a combined $3 billion settlement with the SEC and the Department of Justice.

According to the SEC’s order, between 2012 and 2016, Wells Fargo publicly touted to investors the success of its Community Bank’s “cross-sell” strategy – selling additional financial products to its existing customers – which it characterized as a key component of its financial success. The order finds that Wells Fargo sought to induce investors’ continued reliance on the cross-sell metric even though it was inflated by accounts and services that were unused, unneeded, or unauthorized. According to the order, from 2002 to 2016, Wells Fargo opened millions of accounts of financial products that were unauthorized or fraudulent. Wells Fargo’s Community Bank also pressured customers to buy products they did not need and would not use. The order finds that these accounts were opened through sales practices inconsistent with Wells Fargo’s investor disclosures regarding its purported needs-based selling model.

The SEC’s order finds that Wells Fargo violated the antifraud provisions of the Securities Exchange Act of 1934. Wells Fargo has agreed to cease and desist from committing or causing any future violations of these provisions and to pay a civil penalty of $500 million. The SEC will distribute this money to harmed investors.

According to the Summary of the SEC’s “Order Instituting Cease-And Desist Proceedings Pursuant To Section 21c Of The Securities Exchange Act Of 1934, Making Findings, And Imposing A Cease-And-Desist Order”:

1. These proceedings arise out of a fraud committed by Wells Fargo from 2012 through 2016, when the Company misled investors regarding the success of the core business strategy of the Community Bank operating segment, its largest business unit. Wells Fargo publicly stated on numerous occasions that its sales strategy was “needs-based.” In other words, Wells Fargo claimed that its strategy was to sell customers the accounts that they needed. Well Fargo published a Community Bank “cross-sell metric” in its Annual Reports, and quarterly and annual filings with the Commission that purported to be the ratio of the number of accounts and products per retail bank household. During investor presentations and analyst conferences, Wells Fargo characterized its cross-selling strategy to investors as a key component of its financial success and routinely discussed its efforts to achieve cross-sell growth. Wells Fargo referred to the Community Bank’s cross-sell metric as proof of its success at executing on this core business strategy.

2. In contrast to the Company’s public statements and disclosures about needs-based selling, the Community Bank implemented a volume-based sales model in which employees were directed, pressured, or caused to sell large volumes of products to existing customers, often with little regard to actual customer need or expected use. The Community Bank’s onerous sales goals and accompanying management pressure led thousands of its employees to engage in: (1) unlawful conduct to attain sales through fraud, identity theft, and the falsification of bank records, and (2) unethical practices to sell products of no or low value to the customer, with the belief of the employee that the customer did not actually need the account and was not going to use the account. Collectively, many of these practices were referred to within Wells Fargo as “gaming.”

3. From 2002 to 2016, Wells Fargo opened millions of accounts or financial products that were unauthorized or fraudulent. During that same time period, Wells Fargo also opened significant numbers of unneeded, unwanted, or otherwise low-value products by employees that were not consistent with Wells Fargo’s purported needs-based selling model. Accounts and financial products opened without customer consent or pursuant to gaming practices were included by the Company in the Community Bank cross-sell metric until such accounts were eventually closed for lack of use.

4. Beginning as early as 2002, when a group of employees was fired from a branch in Fort Collins, Colorado, for sales gaming, the Community Bank senior leadership became aware that employees were engaged in unlawful and unethical sales practices, that gaming conduct was increasing over time, and that these practices were the result of onerous sales goals and management pressure to meet those sales goals.

5. From 2012 to 2016, Wells Fargo failed to disclose to investors that the Community Bank’s sales model had caused widespread unlawful and unethical sales practices misconduct that was at odds with its investor disclosures regarding needs-based selling and that the publicly reported cross-sell metric included significant numbers of unused or unauthorized accounts. Certain Community Bank senior executives who reviewed or approved the disclosures knew, or were reckless in not knowing, that these disclosures were misleading or incomplete.

6. Moreover in a January 12, 2015, response to a SEC Comment Letter that asked how the cross-sell metric was calculated and in its 2014 and 2015 Annual Reports, Wells Fargo characterized the cross-sell metric as a ratio of “products used by customers in retail banking households.” Prior to and after that time, the metric was described as “products per household,” “products per retail bank household,” or “the average number of products sold to existing customers.” Community Bank executives knew that the metric included many products that were not used by customers. Wells Fargo’s inclusion of the word “used” to describe the accounts was therefore misleading.

7. Notwithstanding the substantial effect the unused and unauthorized products had on inflating the cross-sell metric, Wells Fargo continued to tout the cross-sell metric as one of the Company’s competitive advantages in its public statements to investors. By failing to disclose the extent to which the cross-sell metric was inflated by low-quality accounts, Wells Fargo sought not only to induce investors’ continued reliance on the metric but also to avoid confronting the risk of reputational damage that might arise—and eventually did arise—from public disclosure of the severity and extent of sales quality problems.


Kehoe Law Firm, P.C.