The SEC has charged Leon Vaccarelli, a former broker who had been affiliated with The Investment Center in Waterbury, Conn., with persuading several elderly customers to invest with him and then spending their money on his own living and business expenses.
In its complaint, the Securities and Exchange Commission states that Mr. Vaccarelli defrauded clients of more than $1 million. The agency is seeking an asset freeze against Mr. Vaccarelli individually as well as his firm, which did business as Lux Financial Services.
The agency alleges that instead of investing the customers' money in conventional brokerage accounts and separately managed accounts as promised, Mr. Vaccarelli deposited client funds into his personal and business bank accounts. He allegedly commingled the funds with his own money and used them for his own purposes, and in some instances he used customer funds to pay returns to earlier investors. According to the SEC's complaint, Mr. Vaccarelli asked one customer to sign an agreement that she would not provide certain information to the Financial Industry Regulatory Authority or the SEC.
Mr. Vaccarelli was associated with The Investment Center, an independent broker-dealer, from 2011 through July 2017, when he was discharged for failing to comply with company policy regarding access to his office and computer during an examination.
In November 2015, without admitting or denying charges, Mr. Vaccarelli consented to a one-month suspension and payment of $7,500 in connection with Finra's findings that he did not have written authorization to place discretionary trades for certain accounts and that The Investment Center had not approved and accepted the accounts as discretionary. The findings also stated that he had falsely certified that he did not handle any retail accounts on a discretionary basis on four annual firm compliance questionnaires.
Mr. Vaccarelli began his securities career in 1999 at a predecessor of Ameriprise Financial Services. He was with QA3 Financial Corp. from 2007 to 2011 before joining The Investment Center.