Articles Tagged with broker fraud

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FINRA Broker Check reports Kalos Capital broker Eric Weschke is the subject of several customer disputes. (CRD# 2486324).

Weschke has been in the securities industry for 20 years and has been affiliated Kalos Capital in Long Island, New York since 2011.

According to FINRA, Weschke has been the subject of nine past customer complaints. Two complaints are pending. While at Kalos Capital, one customer alleged that Weschke recommended unsuitable investments, among other claims. $200,000 in damages have been demanded in the current complaint.

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The SEC (Securities and Exchange Commission) on April 2, 2019 charged the founder a Silicon Valley startup with defrauding investors in Jumio Inc. a private mobile payments company.

Former CEO, Daniel Mattes, agreed to pay more than $17 million to settle the charges.

The SEC’s complaint which was filed in federal court in California alleged that Mattes overstated Jumio’s 2013 and 2014 revenues,. then sold shares he owned to unrelated investors.

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Two FINRA claims were filed involving Michael Fasciglione’s and National Securities Corporation. The claims allege suitability, breach of contract, breach of fiduciary duty, negligence, and/or churning.

The claims were settled for $525,000 and $80,000. FINRA reports of 6 other settled claims involving with prior brokerages.

Michael Fasciglione has been licensed with Aegis Capital Corp since September 2017; previously Fasciglione was licensed with National Securities Corporation. In December 2014, Fasciglione was suspended from the securities industry for 1 month and fined $5,000 by FINRA.

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On February 25, 2019, the SEC took action against against the operators of a South Florida investment fund and its principals. One principal had a felony record. The charges were filed  against Castleberry Financial Services Group LLC and its  president, T. Jonathon Turner and another officer, Norman M. Strell.

The SEC alleged that investors were defrauded  of $3.6 million.

The SEC alleged that Castleberry mis-represented to investors it had hundreds of millions invested in local  properties and businesses. High yields were offered, claiming that a large insurer, CNA and Chubb “bonded” the investments.  CNA and Chubb had no connection with Castleberry. CNA’s and Chubb’s logos were also misappropriated.

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Charles Ponzi hard at work above.

Scammers nailed for $1 billion in fines in Ponzi Ripoff

A Federal Court in Florida on January 24, 2019 ordered The Woodbridge Group of Companies LLC and its disgraced CEO Robert H. Shapiro to pay $1 billion in disgorgement and penalties.

Three penny-stock companies and their CEO – Cherubim Interests, Inc. (CHIT), PDX Partners, Inc. (PDXP), Victura Construction Group, Inc. (VICT), and Patrick Jevon Johnson  were the subject of an SEC action to enforce  subpoenas this week. SEC v. v. Cherubim Interests, Inc., PDX Partners, Inc., Victura Construction Group, Inc., and Patrick Jevon Johnson, No. 2:18-mc-00175 (C.D. Cal. filed December 21, 2018)

According to the SEC’s application as described in Litigation Release 24380 dated 26 December 2018,  on December 21, 2018 The SEC announced it sought enforcement of its subpoenas in the   U.S. District Court for the Central District of California.

The subject of the investigation is to determine whether individuals or entities engaged in a potential pump-and-dump scheme. The securities implicated were CHIT, PDXP, and VICT.

On December 19, 2018, the SEC announced additional charges against an additional 13 individuals and 10 companies for unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors.

Woodbridge collapsed into bankruptcy in December 2017. The SEC previously  charged the owner, the company and others of operating a $1.2 billion Ponzi scheme. Top sales agents were also accused.

The supplemental defendants, all 13, of selling more than $350 million of unregistered securities to about 4,400 investors. The defendants told the purchasers that the Notes were “safe” Investments.

“Churning” of a brokerage account occurs when a stock broker buys and sells stocks to generate commissions for himself without regard to the interests of the customer. It is the equivalent of theft.

In January 2018 a FINRA panel has awarded an investor the entire amount of the investor’s claim, $1.67 million in compensatory and punitive damages against her broker.

The specific legal claims were churning, unauthorized trading, unsuitable trading, breach of fiduciary duty and failure to supervise.

December 25, 2018

According to The Financial Industry Regulatory Authority (FINRA) former advisor Scott Kozak (Kozak). has been accused by his former firm and barred by FINRA over unapproved securities.  Kozak has four customer complaints on his record.

The charge was “selling away” securities, not approved by the broker Kozak was affiliated with. The activity occurred between July 2011 and March 2017. Kozak was associated previously with Cetera Advisors LLC (Cetera) in Highlands Ranch, Colorado.

A Ponzi scheme  is a financial scam where early investors are paid returns with money from later investors rather than legitimate investment returns. A big time Ponzi scheme occurred in Fla. recently. The most recent “huge Ponzi” was Bernard L. Madoff Securities, LLC, involving as much as $65 Billion. Well, this one was $1.2 Billion which is still bad enough.

A Villages, Florida, resident and four companies were charged in an enormous Ponzi scheme by the SEC for unlawfully selling securities of Woodbridge Group of Companies LLC to unsuspecting clients. The SEC previously charged the now bankrupt company, Knowles Systems, Inc., its principal and others with operating a  $1.2 billion Ponzi scheme.

One defendant is Lynette M. Robbins, a cosmetologist who lived with Theodore F. Leutz at 731 Evans Way in the Villages. The Wall Street Journal reported that Knowles Systems Inc. and Robbins, its chief executive and owner, was the highest earning agent for Woodbridge. A SEC report said she received at least $8.1 million in commissions. Other Florida-based defendants sold more than $243 million of its unregistered securities to about 1,600 retail investors.