South Florida Arbitration & Litigation Lawyer Blog
Investment Advisor and Broker Dealer Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
June, 2012:
SEC Charges Massachusetts Investment Adviser With Fraud and Obtains Preliminary Injunction and Asset Freeze
The Securities and Exchange Commission recently announced that it has charged Gary J. Martel of Chelsea, Massachusetts with defrauding investors. The Commission’s complaint, filed in federal district court on June 19, 2012, alleges that from at least 2006 to the present, Martel, who did business as Martel Financial Group and MFG Funding, defrauded at least 12 investors in Massachusetts, Vermont and Florida of at least $1.6 million and likely obtained significantly more from other investors. Today, with Martel’s consent, the court entered a preliminary injunction freezing Martel’s assets and prohibiting him from continuing to violate the antifraud provisions of the federal securities laws.
The complaint alleges that Martel told investors, many of them retirees looking for a safe investment earning reliable income, that he would place their money in “pass-through bonds” or other products, which he assured investors were safe. In March 2012, Martel allegedly also solicited investments in a Facebook investment pool. In fact, however, the complaint alleges that the investments Martel offered were fictitious.
The Commission’s complaint alleges that Martel violated Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In its action, the Commission seeks the entry of a permanent injunction against Martel, disgorgement of ill-gotten gains plus pre-judgment interest thereon, and the imposition of civil monetary penalties. [SEC v. Gary J. Martel, d/b/a Martel Financial Group, and MFG Funding 12-CV-11095 -FDS (D. Mass.)] (LR-22396)