Farmville Company Faces IPO Fraud

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Farmville

Brokerdealer.com blog update profiles online gaming company, Zynga, most popularly known for the Facebook game, Farmville, is facing a lawusit for IPO fraud. Zynga apparently defrauded its shareholders about its prospects before and after its December 2011 initial public offering. Brokerdealer’s blog update on this IPO fraud is courtesy of Reuters’ Jonathan Stempel’s article, “Zynga must face lawsuit alleging fraud tied to IPO” with an extract below. 

Ruling 13 months after dismissing an earlier version of the lawsuit, U.S. District Judge Jeffrey White in San Francisco on Wednesday said shareholders could pursue claims that Zynga concealed declining user activity, masked how changes in a Facebook Inc platform for its games would affect demand, and inflated its 2012 revenue forecast.

The lawsuit was based in part on at least a half-dozen confidential witnesses, and White said their testimony supported the claim that Zynga management intended to commit fraud.

“Plaintiff alleges that the officers at Zynga obsessively tracked bookings and game-operating metrics on an ongoing, real-time basis, with regular updates on the activity and purchases by every user of every Zynga game,” White wrote. “Confidential witnesses all corroborate that the updates on game users and spending data was readily accessible to Zynga’s management.”

White rejected a claim over Zynga’s alleged product launch delays, saying it was mere “business puffery” for the company to call its game pipeline “strong,” “robust” and “very healthy.”

To read the entire article from Reuters, click here.

Ex-New Jersey Broker Dealer Has A Good Time On His Clients’ Dollars

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Kochav

Brokerdealer.com blog update profiles ex-New Jersey broker dealer, Evan Kochav, who stole more than $500,000 from clients and using it spend on poker at casinos and football tickets. This brokerdealer.com blog update is courtesy of NJ.com’s reporter, Christopher Baxter “Ex-N.J. stock broker indicted for stealing $562K from clients for poker, football tickets“. An excerpt from NJ.com is shown below.

A Jersey City man has been indicted for stealing $561,745 from clients of his investment firm and spending the money on personal expenses including poker at casinos and football tickets, state authorities said today.

From 2012 to 2014, Evan Kochav, 33, allegedly stole money from 10 investors he had solicited through his Red Bank-based firm, White Cedar Group, which he marketed as an economic consulting firm that had links to investment and business groups worldwide.

But authorities said the business was a front for Kochav, a professional poker player, to divert money to himself in order to pay for his gambling at casinos in New Jersey, Pennsylvania and Florida and on at least two poker websites.

He also allegedly transferred money to his wife and paid for shopping, dining, air travel, hotels, football tickets and other entertainment. A small sum was paid to his investors in order to cover up the scam, authorities said.

“Kochav bluffed investors like the poker player he is, claiming ties with lucrative business ventures around the globe to convince clients their hard-earned money was securely invested,” acting state Attorney General John Hoffman said.

The indictment, handed up by a state grand jury Monday, charged Kochav with theft by deception, money laundering, misconduct by a corporate official and writing bad checks for more than $85,000 to a client who had questioned what happened to his money.

For the entire article from NJ.com, click here.

Banned BrokerDealer, Cacchione, Backs Into Industry via RIA —Gets Busted Again

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barred brokerdealer

Brokerdealer.com blog update profiles David Scott Cacchione’s , a former managing director of Investment Brokerage Firm  who was sentenced to 5 years in prison in 2009 for his role in defrauding lenders into more than $100 million in loans, new failed attempt to get back into the brokerdealer game. This update is courtesy of a 20 March InvesmentNews article “SEC shuts down ex-broker’s attempt to start RIA from jail” with an extract from the article below.

Convicted felon David Scott Cacchione, who was barred from the brokerage industry in 2009 for helping orchestrate a $100 million fraud scheme, has been barred again by the Securities and Exchange Commission after he tried, while still incarcerated, to re-enter the securities industry through a registered investment adviser.

Mr. Cacchione, 50, attempted, as others barred from the brokerage industry have, to play on the dual licensing of brokers and investment advisers to resurrect a career in the securities industry.

Mr. Cacchione pleaded guilty in 2009 to securities fraud for pledging the securities of unknowing clients to secure more than $45 million in personal loans for a friend. The scheme eventually resulted in almost $47 million in losses, according to the FBI. He also engaged in unauthorized trading in the accounts of clients, including a local children’s charity and an elderly widow, according to the SEC.

Mr. Cacchione was sentenced to 60 months in jail followed by three years of supervised release and ordered to pay nearly $50 million in restitution. According to the SEC, he had paid only $502 of that as of last August.

For the entire article from InvestmentNews, click here.

BrokerDealers Banking on GoDaddy IPO

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GoDaddy

Brokerdealer.com blog update profiles Internet domain registrar and web hosting company, GoDaddy filing for an IPO. GoDaddy is largest web hosting company with said to have had more than 59 million domain names under management. Brokerdealers excitedly await the launch of GoDaddy’s IPO because it is anticipating to be valued billions of dollars. This Brokerdealer.com blog update Leslie Picker’s article “GoDaddy Seeks Up to $2.87 Billion Valuation in U.S. IPO” from BloombergBusiness.

GoDaddy Inc., the provider of domain names and website hosting, is seeking a valuation of as much as $2.87 billion in an initial public offering.

The company is seeking to raise as much as $418 million, offering 22 million shares at $17 to $19 apiece, according to a regulatory filing Thursday. Those terms imply a market value of $2.57 billion to $2.87 billion.

GoDaddy’s IPO comes more than three years after a group led by KKR & Co. and Silver Lake Management acquired the Scottsdale, Arizona-based company for $2.25 billion. Now that the price range is set, GoDaddy can officially begin marketing the sale to investors. The IPO is scheduled to price March 31, according to data compiled by Bloomberg.

GoDaddy is seeking a valuation at a discount to other Web-services providers. At the high end of the range, GoDaddy would fetch a multiple of about 2.1 times last year’s sales, while Endurance International Group Holdings Inc., which provides Internet hosting, trades at 3.7 times and Cognizant Technology Solutions Corp., a consulting firm, trades at 3.1 times, data compiled by Bloomberg show.

In 2014, GoDaddy posted $1.39 billion in revenue, a 23 percent jump from the prior year. Its net loss narrowed to $143.3 million over the same period, from $200 million in 2013, the filing showed.

To read the full article from BloombergBusiness, click here.

Asia BrokerDealers Ramp Up For More ETFs

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hong-kong-stock-exchange

Brokerdealer.com blog update profiles brokerdealers’ push for a more diversified market in Hong Kong. In an effort to listen to the brokerdealers and diversify the market, Hong Kong’s Securities & Futures Commission is looking into allowing more off shore ETFs. An extract from AsianInvestor article, “SFC mulls more foreign ETF listings in HK” tells us more.

Hong Kong’s Securities & Futures Commission (SFC) is considering allowing more offshore ETFs, including from the US to be cross-listed in Hong Kong.

The move comes amid calls by some industry players from Hong Kong to diversify its ETF business, because the product range at present is predominantly Greater-China focused.

A senior executive in the ETF business told AsisanInvestor that the SFC that set up a working group to look into expanding the scope of the ETF industry and further developing int. It reached out to individual fund managers towards the end of last year to solicit interest on cross-listing their offshore ETFs in Hong Kong.

The senior executive said their group was interested in listing its American ETF in Hong Kong, but the decision hinges on the SFC and will involve a change in regulatory policy.

To read the full article from AsianInvestor, click here.