Florida Investment Advisor and Broker/Dealer False and Misleading Offering and Promotional Materials Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney:
Securities and Exchange Commission v. Patrick G. Rooney and Solaris Management, LLC, Civil Action No. 11-8264 (N.D. IL)
SEC Obtains Order of Permanent Injunctions Against Chicago-Area Investment Adviser and Its Owners for Fraud
South Florida Investment Advisor Fraud, Breach of Contract, Breach of Fiduciary Duty and Mismanagement Litigation and Arbitration Attorney:
The Securities and Exchange Commission recently charged the managing partners of a Charlotte, N.C.-based investment advisory firm for compromising their independent judgment and allowing a third party with its own interests to influence the portfolio selection process of a collateralized debt obligation (CDO) being offered to investors.
The investment managers have agreed to collectively pay more than $472,000 and exit the securities industry to settle the SEC’s charges.
Tampa, Fort Meyers and Naples, Florida Investment Adviser Fraud, Breach of Fiduciary Duty and Misrepresentation FINRA Arbitration and State and Federal Court Litigation Attorney:
The Securities and Exchange Commission recently announced charges against two Tampa-area investment advisers accused of committing fraud by failing to truthfully inform clients about compensation received from offshore funds they were recommending as safe investments despite substantial risks and red flags.
The advisers also are charged with contributing to violations of the “custody rule” that requires investment advisory firms to establish specific procedures to safeguard and account for client assets.
Securities and Exchange Commission v. Brian K. Velten, Civil Action No. 1:13-cv-23477 (S.D. Fla.)
The Securities Exchange Commission (“SEC”) recently filed a civil injunctive action in the United States District Court for the Southern District of Florida against Brian K. Velten alleging violations of the antifraud provisions of the federal securities laws in connection with his scheme to defraud at least three senior citizens who held accounts at Fidelity Brokerage Services, LLC (“Fidelity”), a broker-dealer registered with the SEC.
The SEC’s complaint alleges that, from no later than July 2009 through at least September 2012, Velten, an unregistered investment adviser, opened accounts for his clients at Fidelity and engaged in a scheme to defraud at least three of them by misappropriating approximately $171,000 from the clients’ accounts, making false claims about his ability to generate large profits trading stocks for the clients, and trading stocks on margin without client authorization.
Securities and Exchange Commission v. OM Investment Management LLC, Gignesh Movalia, and Edwin V. Gaw, Civil Action No. 1:13-cv -23486-Martinez (S.D. Fla., filed September, 2013)
SEC Charges Tampa-Based Adviser with Fabricating Statements and Making Unauthorized and Undisclosed Investments
The Securities and Exchange Commission recently charged a formerly SEC-registered Tampa-based investment adviser, OM Investment Management LLC, its principal, Gignesh Movalia, and its director of investments, Edwin V. Gaw, with fraudulently raising money and making material misrepresentations and omissions relating to OM Global Investment Fund, LLC, an unregistered hedge fund.
Securities and Exchange Commission v. Frank Dappah and Yatalie Capital Management, et al., Civil Action No. 3:13-cv-00546 (W.D.N.C.)
SEC Charges Charlotte Investment Advisors with Excessive Fee Scheme
Recently, the Securities and Exchange Commission filed an action in federal court in the Western District of North Carolina, charging Frank Dappah of Charlotte, NC, and his firm, Yatalie Capital Management (a/k/a Yatalie Capital Management Co, Creato Funds L.P., a/k/a Yatalie Capital, Inc., a/k/a Creato Funds, L.P., a/k/a Yatalie Capital Management Co.), a sole proprietorship, with violations of the federal securities laws for charging grossly excessive fees to their advisory clients without authorization or notice and other violations. The Commission’s complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and an asset freeze against the defendants.
SEC Approves Registration Rules for Municipal Advisors
The Securities and Exchange Commission recently voted to adopt rules establishing a permanent registration regime for municipal advisors as required by the Dodd-Frank Act. The rule is currently slated to become effective 60 days after publication in the Federal Register.
The Final Rule:
In the Matter of Sarkauskas & Associates, Inc. and James M. Sarkauskas
Recently, the Securities and Exchange Commission issued a settled Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Section 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (Order) against Sarkauskas & Associates, Inc. (the Adviser) and James M. Sarkauskas (Sarkauskas).
The Order finds that the Adviser, a Wisconsin-based investment adviser, and its principal, Sarkauskas, violated Sections 206(1) and (2) of the Advisers Act when they purchased unit investment trust (UIT) units bearing transactional sales charges in their clients’ accounts without disclosing that identical no-load UIT units sold at net asset value with no transactional sales charges were available for purchase, and that the Adviser’s purchases of the units bearing transactional sales charges substantially increased the Respondents’ compensation, thereby creating a conflict of interest. The Order further finds that between August 2009 and August 2012, the Adviser, through Sarkauskas, collected $331,433.98 in such sales charges in addition to the Adviser’s asset management fees.
Securities and Exchange Commission Charges Purported Money Manager in New York Who Schemed Investors and Lied to Commission Examiners
The Securities and Exchange Commission (Commission) recently charged the owner of a New York-based investment advisory firm with defrauding investors while grossly exaggerating the amount of assets under his management.
The SEC alleges that Fredrick D. Scott of Brooklyn, N.Y., registered his firm ACI Capital Group as an investment adviser and then embarked on a series of fraudulent schemes targeting individual investors and small businesses. Scott repeatedly touted ACI’s registration under the securities laws and falsely claimed the firm’s assets under management to be as high as $3.7 billion to bolster his credibility when offering too-good-to-be-true investment opportunities. As Scott solicited funds from investors after promising them very high rates of return, he simply stole their money almost as soon as they deposited it with ACI. Scott paid no returns to investors and illegally used their money to fund such personal expenses as his children’s private school tuition, air travel and hotels, department store purchases, and several thousand dollars in dental bills.
Securities and Exchange Commission v. Paul Marshall, Bridge Securities, LLC a/k/a Bridge Financial, Bridge Equity, Inc. and FOGFuels, Inc., Civil Action No. 1:13-CV-3032 (N.D. Ga.)
SEC Charges Atlanta-Based Investment Adviser Representative and Related Companies with Securities Fraud
Recently, the Securities and Exchange Commission filed an emergency action seeking a temporary restraining order and other emergency relief in federal court in the Northern District of Georgia, charging Paul Marshall (Marshall), a state-registered investment adviser representative, and three Atlanta-based companies that he owned and controlled – Bridge Securities, LLC, Bridge Equity, Inc. (collectively, the Bridge Entities) and FOGFuels, Inc. (FOGFuels) – with violations of the federal securities laws for misappropriating client funds.
South Florida Arbitration & Litigation Lawyer Blog