Investment Adviser and Broker/Dealer Fraud and Misrepresentation Litigation and FINRA Arbitration Attorney, Russell L. Forkey, Esq.
SEC v. Jorge Gomez and Roberto Aleph Espinosa (United States District Court for the Southern District of Florida, Civil Action No. 1:12-CV-21962
SEC CHARGES TWO INVESTMENT ADVISERS WITH FRAUD
The Securities and Exchange Commission recently charged Jorge Gomez, an investment adviser formerly located in Dallas, Texas and Mexico, with perpetrating a fraudulent scheme to misappropriate millions from an investment advisory client (“Client”). The SEC also has agreed to settle related charges against Roberto Aleph Espinosa, a former resident of Miami, Florida, who, in conjunction with Gomez, provided investment advisory and brokerage services to the Client.
In the complaint filed in the U.S. District Court for the Southern District of Florida, the SEC alleges that in 2007, Gomez, age 42, the president of Atlantic International Capital LLC (“Atlantic”), lured the Client, a Mexican national, to invest $10.8 million with him by making false claims about his affiliation with two large financial institutions and the Client’s proposed relationship with those entities.
According to the SEC’s complaint, Gomez misappropriated at least $4.3 million from this Client between September 2007 and December 2010. Gomez concealed his misappropriation by providing the Client with fake account statements and securities certificates. Gomez also sent correspondence to the Client misrepresenting, among other things, his ability to withdraw money from his account.
The SEC alleges, among other things, that Espinosa, age 37, the president of now defunct Florida corporation Aleph Consulting Group LLC (“Aleph”), and Gomez invested approximately $3 million of the Client’s funds in the ACG Global Fund, Ltd., a hedge fund started by Espinosa and managed by Aleph. Aleph received retrocession fees in connection with the purchase of certain securities that were not disclosed to any of the hedge fund investors, including the Client.
The complaint also alleges that Espinosa forwarded to the foreign financial services firm holding the Client’s brokerage account scores of withdrawal requests signed by Gomez directing the Client’s funds to Gomez controlled accounts, while simultaneously failing to discuss Gomez’s depletion of the account with the Client in breach of his fiduciary duties.
The Commission’s complaint charges Gomez with violations of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5(a), (b), and (c) thereunder; and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”). The complaint charges Espinosa with violations of Section 15(a) of the Exchange Act and Sections 206(1), (2), and (4) of the Advisers Act and Rule 206(4)-8 thereunder. The Commission’s complaint alleges in the alternative that Gomez aided and abetted Atlantic’s Advisers Act violations and that Espinosa aided and abetted Aleph’s Advisers Act violations. The Commission is seeking permanent injunctions against Gomez for violating or aiding and abetting the violations of the above provisions of the securities laws, disgorgement of ill-gotten gains plus pre-judgment interest, and civil penalties. Espinosa has agreed to a settlement with the SEC, without admitting or denying the allegations of the complaint, that includes a permanent injunction against future violations of Exchange Act Section 15(a) and Advisers Act Sections 206(1), (2), and (4) and Rule 206(4)-8, disgorgement of $855,000 plus prejudgment interest of $34,822.15 and a one-time civil penalty of $130,000.