South Florida Arbitration & Litigation Lawyer Blog
In the Matter of Benjamin R. Daniels
On December 6, 2012, the Commission issued an Order Instituting Administrative and Cease-and Desist Proceedings, Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (Order) against Benjamin R. Daniels. The Order finds that Daniels, age 35, of Indio, CA was retained by Yusef Jawed, of Portland, OR, to raise money for Jawed’s purported funds, Grifphon Alpha I Fund, L.P. and Grifphon Qualified Fund, L.P. (the “Grifphon Funds). In September 2012, the Commission charged Jawed and certain entities he controlled with securities fraud in connection with the Grifphon Funds for perpetrating a long-running Ponzi scheme that raised over $37 million from more than 100 investors in the Pacific Northwest and across the country. See SEC v. Jawed, et al., Civ. Action No. 12-01696 (D. Oregon, Sep. 20, 2012). From 2007 through 2009, Daniels raised approximately $4.3 million from 20 investors for the Grifphon Funds. Daniels served as the primary point of contact between the Grifphon Funds and certain investors. He discussed with investors the Grifphon Funds’ purported high rates of returns, the purported nature of the investments, and attested to Jawed’s reputable and trustworthy character. He also provided to investors Grifphon Funds’ private placement memoranda and other marketing materials. Several investors relied solely on Daniels’ representations in deciding to invest in the Grifphon Funds and had never met or spoken with Jawed before investing. Jawed paid Daniels approximately $286,683 in transaction-based compensation. Although Daniels previously was a registered representative associated with various broker-dealers registered with the Commission, he was not associated with a registered broker-dealer during the time he raised money for the Grifphon Funds. The Commission’s Order finds that Daniels acted as a broker without being registered or associated with a registered broker or dealer in violation of Section 15(a) of the Exchange Act.
Based on the above, the Order orders Daniels to cease and desist from committing or causing any violations and any future violations of Section 15(a) of the Exchange Act and bars Daniels from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and from participating in any offering of a penny stock with the right to apply for reentry after three years. Daniels consented to the issuance of the Order without admitting or denying the findings in the Order.
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