In connection with its fraud case against Dawn J. Bennett, the Securities and Exchange Commission has charged Bradley C. Mascho, a Maryland-based financial adviser and the onetime chief financial officer of DJB Holdings, with aiding and abetting an offering fraud by Ms. Bennett's firm.
That scheme allegedly involved the sale of more than $20 million in convertible and promissory notes from at least 46 investors from December 2014 to July 2017. The SEC also amended a complaint filed in August, adding Mr. Mascho as a defendant. That complaint charged Dawn J. Bennett and her company, DJB Holdings, with fraud in connection with their sale of notes backed by the company.
According to the August complaint, Ms. Bennett repeatedly misled investors regarding the financial condition of DJB Holdings and her plan to divert millions of dollars in investor funds to personal use. The complaint also alleged that she perpetuated her fraud by, among other things, lying to regulators and repaying investors with loan proceeds obtained through loan applications that substantially overstated her net worth.
As amended, the complaint alleges that Mr. Mascho aided and abetted Bennett's fraud by various means, including preparing false financial statements and related offering materials, lying to regulators and to his employer regarding his knowledge of and role in the sale of notes, facilitating her efforts to target his firm's brokerage customers, and attempting to disguise certain note sales by creating new, "backdated" notes as well as false affidavits misrepresenting the details of the note offering.
According to Finra's BrokerCheck website, Mr. Mascho has been registered with Western International Securities since 2009.
In a parallel case, the U.S. Attorney's Office for the District of Maryland unsealed criminal charges against Mr. Mascho.
In recent years, Ms. Bennett repeatedly has been in trouble with the SEC, which charged her in September 2015 with inflating both the amount of assets under management by her firm Bennett Group Financial Services, and the investment returns obtained by the firm. After failing to appear last year at an SEC hearing before an administrative judge, she was barred from the securities industry this March. Several customer complaints against her are pending.