Florida Office of Financial Regulation

Violation of section 517.161(1)(k), Florida Statutes, by being the subject of a Final Judgment and SEC order involving violations of federal securities law.

Order

Denial

Claimants allege that representative recommended unsuitable investments and overconcentrated their accounts in speculative positions. Claimants also allege that representative engaged in a "cherry-picking" scheme wherein she favored other customer accounts over Claimants' accounts.

$217,500.00

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Lina Maria Garcia ("Respondent"). The Commission finds that on October 3, 2022, a final judgment was entered by consent against Lina Maria Garcia, permanently enjoining her from future violations of 17(a)(3) of the Securities Act of 1933 ("Securities Act") and Section 206(2) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Ramiro Jose Sugranes, et al., Civil Action Number 21-cv-22152, in the United States District Court for the Southern District of Florida. The Commission's complaint alleged that a cherry-picking scheme was carried out through UCB Advisers and another related entity. Respondent had oversight responsibilities over the accounts used to carry out the cherry-picking scheme. During the cherry-picking scheme that lasted more than four years, thousands of profitable trades of securities worth more than $4 million were allocated to two preferred accounts. In addition, millions of dollars of unprofitable trades of securities were allocated to other investment advisory client accounts.

Order

Suspension

association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

12 Months

10/24/2022

10/23/2023

Association with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock

12 Months

10/24/2022

10/23/2023

limitation

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Plaintiff Securities and Exchange Commission ("SEC") hereby files its Amended Complaint against Defendants Ramiro Jose Sugranes ("Sugranes"), Lina Maria Garcia ("Garcia"), UCB Financial Advisers, Inc. ("UCB Advisers"), and UCB Financial Services, Limited ("UCB Services") (collectively, the "Defendants") and Relief Defendants Ramiro Sugranes Hernandez and Thelma Lanzas De Sugranes (collectively, the "Relief Defendants"), and alleges that Defendants Sugranes and Garcia, through UCB Advisers and UCB Services (collectively, the "UCB Entities"), engaged in a long-running fraudulent trade allocation scheme - commonly referred to as "cherry picking." Defendants allocated thousands of profitable trades worth more than $4 million in stocks and options on securities ("Options") to two preferred accounts held at the UCB Entities in the name of the Relief Defendants Ramiro Sugranes Hernandez and Thelma Lanzas De Sugranes, who are Sugranes' parents (collectively, "Preferred Accounts"). Sugranes and Garcia also allocated millions of dollars of unprofitable trades to other investment advisory client accounts with the UCB Entities. The SEC brought this enforcement action to stop this fraud and return the ill-gotten gains to the harmed investors. Sugranes and Garcia carried out the cherry-picking scheme through UCB Services and UCB Advisers, an investment advisory firm of which they are partial owners, by using an average price trading account used by the UCB Entities to purchase stocks and Options on behalf of numerous client accounts. Sugranes and Garcia then allocated those trades to specific accounts, typically later that same day. If the position increased in value during that day, the position was usually closed out, thereby locking in the same-day profit, and the opening and closing trades and the corresponding profits were allocated to one of the Preferred Accounts. If the value of the trades decreased during that day, the position (which was worth less at the time of allocation than it was at the time of purchase and thereby had a first day loss) was usually allocated to the account(s) of one or more of the UCB Entities' other clients (the "Non-Preferred Accounts"). This cherry-picking scheme funneled approximately $4.6 million in illicit profits to the Preferred Accounts, and negatively impacted at least 75 Non-Preferred Accounts that suffered first day losses. In total, the Non-Preferred Accounts were allocated more than $5.5 million of first day losses with 16 of the Non-Preferred Accounts sustaining more than $25,000 in first day losses, and two other Non-Preferred Accounts sustaining more than $1 million in first day losses. From this fraud, the Defendants received ill-gotten gains and benefits and the Relief Defendants received illicit proceeds from the Defendants' fraud to which they have no legitimate claim. As a result of the conduct described in this Complaint, Garcia violated, and aided and abetted the other Defendants' violations of, Sections 17(a)(1) and 17(a)(3) of the Securities Act, Section 10(b) of the Exchange Act and Rules 10b-5(a) and 10b-5(c) thereunder, and Sections 206(1) and 206(2) of the Advisers Act.

Judgment Rendered

Civil and Administrative Penalty(ies)/Fine(s)

Disgorgement

$225,718.00

Monetary Penalty other than Fines

Injunction

To avoid the cost of additional litigation, without admitting or denying the allegations, Ms. Garcia elected to enter into a settlement agreement with the SEC.