SEC bars broker-adviser Frank Mazzola

Charges participation in securities sales without being registered

Jan 19, 2018 @ 12:41 pm

By InvestmentNews

The Securities and Exchange Commission has barred former broker and registered investment adviser Frank Mazzola of Upper Saddle River, N.J., for participating in securities sales when he was no longer registered.

The SEC said that from 2009 to 2014, Mr. Mazzola was a registered representative of Felix Investments, which was expelled by the Financial Industry Regulatory Authority in August 2014. He also was the manager of Saddle River Advisors (SRA), which advised pooled investment vehicles; and of SRA Management, which was the managing member and an adviser to three pooled investment vehicles.

The Commission's complaint alleged that SRA raised over $53 million from investors in early-to-late-stage, pre-IPO technology companies, most of which are based in the San Francisco Bay Area. Saddle River and SRA Management allegedly promised investors that their money would be used only to buy shares in the specific pre-IPO companies they were interested in and to pay specified fees. Instead, Mr. Mazzola's uncle allegedly diverted about $2.7 million in investor money to Mr. Mazzola and his wife.

Much of the fraud concerned the sale of the shares of Facebook, according to an article by Business Insider.

The SEC said that Mr. Mazzola also allegedly continued to be associated with Saddle River and Felix Investments and engaged in the offer and sales of securities after he had been issued a three-year bar by the SEC in 2014 and a permanent bar issued by Finra at that time.

Mr. Mazzola began his career at CS First Boston in 1994 and worked at five other firms — where he was involved in seven customer disputes — until 2006, when he joined Advanced Equities. That firm was expelled by Finra in 2009, when he joined Felix Investments.

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