Hamilton ticket investor sues BD over its due diligence in alleged $81 million Ponzi

An investor in the alleged $81 million Ponzi scheme involving the purchase and resale of tickets to such high demand shows as Adele and the Broadway musical Hamilton has filed a complaint against a broker-dealer, claiming the firm made repeated false and misleading statements about its due diligence and investigation into the ticket operation.
Adam Blank on Monday filed the lawsuit in U.S. district court, southern district of New York against Tripoint Global Equities, related entities and executives. Mr. Blank and associated trusts made a total of $1.5 million investments into the alleged scheme.
According to the complaint, Mr. Blank met Tripoint Global’s CEO Mark Elenowitz in January 2016 at a French bistro in Long Island to discuss the potential to develop a business relationship, including Tripoint Global helping Mr. Blank find investment opportunities and providing financial advisory and related services.
In response to the initial meeting and subsequent phone calls, during which Mr. Blank explained the importance of investments to be fully vetted, Mr. Elenowitz advised and recommended that “the safest and most conservative investment was the ticket resale business,” according to the complaint.
Mr. Elenowitz explained to Mr. Blank that the “investment was a no-brainer because the guys who run the ticket resale business had a deep understanding of the event business, were able to inquire inside and (had) pre-sale access to the most desirable events and that what [he] liked most was the fact that each investment was for stated events with each having an extremely short investment life,” according to the complaint.
Mr. Elenowitz on Tuesday morning said he had no comment.
Mr. Elenowitz also represented to Mr. Blank that he had conducted due diligence regarding the ticket resale business and personally reviewed and analyzed the ticket resale companies’ financial statements and business records to ensure that all corporate governance was handled appropriately, according to the complaint. He also represented that two of his partners were personally invested in the ticket resale business along with many of Tripoint’s clients, the complaint alleges.
The Justice Department and Securities and Exchange Commission simultaneously field charges last month against three individuals over the alleged Ponzi scheme. The Justice Department charged Steven Simmons and Joseph Meli with allegedly defrauding investors who thought they were investing in the ticket business.
The SEC charged Mr. Meli and Matthew Harriton with fraud related to the purported ticket scheme.
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