Steele Financial is Accused of Investor Fraud
The US Securities and Exchange Commission has filed civil charges against investment advisory firm Steele Financial Inc. and its owner Tamara Steele. According to the regulator, they allegedly sold $13M of risky securities to over 120 advisory clients. A lot of these clients are teachers, ex-teachers, or other public education employees. The SEC contends that Steele and her investment advisory firm did not tell them that Steele Financial would be making up to 18% in commissions in sales.
According to the Commission’s investment advisory fraud complaint, from 12/2012 to 10/2016, Stele Financial and Steele sold over $15M of Behavioral Recognition Systems Inc. securities. BRS is a company that the SEC has charged with fraud in the past. Meantime, Stele and her firm made over $2.5M of commissions.
They allegedly solicited the funds from their own advisory clients who typically didn’t invest in individual stocks. Steele and her firm are accused of generating false invoices and hiding their involvement in the securities.
Investment advisers have a duty to place clients’ interests first while disclosing any conflicts of interest. Now, the SEC wants disgorgement of ill-gotten gains plus interest, penalties, and permanent injunctions.
Broker Accused of Cherry Picking to Benefit His Family
Michael A. Bressman, a New Jersey-based broker, is now facing SEC charges accusing him of fraud. According to the regulator, Bressman “misused” the access he had to clients’ accounts, including retirement accounts.
The SEC is accusing him of misusing access to an allocation account to get at least $600K in illicit trading profits.
Bressman allegedly made trades using the account while cherry picking the trades that stood to be profitable. He then purportedly moved the profitable trades to his account and to that of two family members. Meantime, he allegedly moved the trades that were not profitable into other customers’ accounts.
The SEC announced that it was able to detect the alleged cherry picking with the help of data analysis geared toward identifying suspect trading patterns. The regulator is seeking restoration of allegedly ill-gotten gains, interest, a permanent injunction, and penalties.
Prosecutors in Massachusetts have filed parallel criminal charges against Bressman over the broker fraud allegations.
SEC Accuses 10 People and 10 Entities in Alleged $27M Microcap Fraud
The SEC has filed charges against 10 individuals and 10 associated entities over their involvement in alleged long-running frauds that garnered over $27M in illegal stock sales. The regulator contends that Barry Hong led a group of fraudsters in manipulating the price of three companies’ stock in pump-and-dump scam fashion.
Big amounts of the stocks were obtained in a huge discount and once Honig and the others acquired “substantial” interest in the three companies, they allegedly manipulated trading so as to inflate the stock prices. They then got rid of their shares, making millions of dollars. Meantime, retail investors lost money because the stock they had just bought were now “virtually worthless.”
The entities listed in the microcap fraud complaint include:
Alpha Capital Anstalt
HS Contrarian Investments LLC
GRQ Consultants Inc.
Frost Gamma Investments Trust
Melechdavid Inc.
OPKO Health Inc.
ATG Capital LLC
Grander Holdings Inc.
Stetson Capital Investments
Southern Biotech Inc.
The individuals named in the SEC case, aside from Hong, include:
Biotech billionaire Phillip Frost
John H. Ford
Robert Ladd
Brian Keller
Elliot Maza
Mark Groussman
Michael Brauser
John R. O’Rourke III
John Stetson
Our investor lawyers at Shepherd Smith Edwards and Kantas, LLP represent investors that have sustained losses due to investment advisory fraud, broker fraud, microcap fraud, and other types of securities fraud. Contact our securities law firm today.
The SEC Complaint in the Steele Financial Complaint (PDF)
The SEC Complaint in the Bressman Case (PDF)
The SEC Complaint in the Microcap Scam (PDF)
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Transamerica Entities to Pay $97M to Investors Over Flawed Investment Models, August 29, 2018
GPB Capital Holdings Stops Selling Private Placements in GPB Funds to Investors, August 20, 2018