In the Matter of Howard Richards, and
In the Matter of James Goodland, et al.
Admin. Proc. Files No. 3-16877 and 3-16878
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In the Matter of Howard Richards, Admin. Proc. File No. 3-16877, and
In the Matter of James Goodland, et al., Admin. Proc. File No. 3-16878
The Distribution Plan provides for distribution of funds collected in the above-captioned matter to compensate investors harmed by the conduct that served as the basis for its findings of securities law violations in the Commission’s Orders (the “Orders”) against Howard Richards (“Richards”), James Goodland (“Goodland”) and Securus Wealth Management, LLC (“Securus”) (collectively, “Respondents).
According to the Orders, From January 2010 through July 2013, Richards, an investment advisory representative associated with Securus Wealth Management, LLC (“Securus”), engaged in a manipulative scheme to support the market price of the common stock of Gatekeeper USA, Inc. (“Gatekeeper”), which he thought would help Gatekeeper to obtain financing. Richards caused his clients to invest over $1 million in shares of Gatekeeper stock during this period. This trading was unusual for Securus, whose primary business involved investing in mutual funds on behalf of its clients. In furtherance of his scheme, Richards sent numerous emails from his Securus email account to an insider at Gatekeeper in which he discussed his scheme. In addition, Richards failed to disclose significant conflicts of interest to his advisory clients arising from his personal ownership of Gatekeeper shares and his close involvement with the company. Through these activities, Richards willfully violated the antifraud provisions of the Exchange Act and willfully aided and abetted and caused Securus’ violations of the Advisers Act.
During this period, Securus, an investment adviser registered with the Commission, and Goodland, its President and Chief Compliance Officer, failed reasonably to supervise Howard Richards (“Richards”), an investment advisory representative associated with Securus whom Goodland directly supervised. Securus and Goodland also failed to adopt and implement an adequate system of internal controls with a view toward preventing and detecting violations of the Advisers Act.
Securus failed reasonably to implement required policies and procedures for e-mail review and failed to develop reasonable policies and procedures to monitor trades for potential market manipulation. In addition, Securus failed to develop and implement reasonable policies, procedures or systems to monitor conflicts of interest and ensure that conflicts were fully disclosed to clients. Goodland failed adequately to respond to red flags concerning Richards’ conflicts of interest, his unusual trading in client accounts and his numerous emails with a Gatekeeper insider. In particular, Goodland failed to complete required email reviews or adequately monitor Richards’ trading in Gatekeeper stock.
Richards and Goodland have paid, as ordered, a total of $174,000.00 into their respective Fair Funds, which will be consolidated into one Fair Fund for the distribution to harmed investors.
The Order also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the civil money penalty could be distributed to those harmed by the Respondent’s conduct described in the Order.
Eligible Investor’s Participation Options for this Fair Fund
Distribution Notices and Certification Forms were mailed to known Eligible Investors on March 21, 2022.
If you are an Eligible Claimant, in order to receive a payment from the Distribution Fund:
- if you have no Dispute as to your Recognized Loss Amount, you must submit the Certification Form so that it is postmarked no later than 90 days from the date of the Notice.
- if you have a Dispute as to your Recognized Loss Amount, you must complete the Certification Form and write to the Fund Administrator detailing the reasons for your objection and return it so that it is postmarked no later than 45 days from the date of the Notice.
Certification forms and supporting documentation (if any) may also be uploaded using the Fund Administrator’s secure upload system:
IF YOU ARE AN ELIGIBLE CLAIMANT AND DO NOT COMPLETE A CERTIFICATION FORM AND RETURN IT TO THE FUND ADMINISTRATOR WITHIN THE DEADLINES DESCRIBED ABOVE, YOU WILL NOT RECEIVE A DISTRIBUTION PAYMENT.