New charges against Dawn Bennett allege a $20 million scheme to defraud 46 investors

Ms. Bennett allegedly spent some of her ill-gotten gains on luxury goods, mystics and $500,000-a-year suite at AT&T Stadium in Dallas

Aug 28, 2017 @ 5:19 pm

By InvestmentNews

Like a soap opera, the saga of barred broker Dawn J. Bennett just keeps getting more lurid.

Last time the former Barron's billion-dollar adviser made news was in July 2016, when the SEC barred her from the securities industry and ordered her and her firm, Bennett Group Financial Services, to pay more than $4 million in fines and disgorgement for exaggerating her firm's investment performance and assets under management to win over rich clients.

The Securities and Exchange Commission filed a civil complaint on Monday against her and her retail sports apparel business, DJB Holdings, in federal court in Maryland for their role in what the SEC says was a fraudulent unregistered securities offering that raised more than $20 million from at least 46 investors from December 2014 to July 2017.

In a parallel case, the U.S. Attorney's Office in Maryland unsealed criminal charges against Ms. Bennett.

In its complaint, the SEC alleges that Ms. Bennett "largely targeted elderly and financially unsophisticated investors by materially misrepresenting the company's profitability and by claiming the company had resources to pay annual rates of return as high as 15%."

The agency went on to say that Ms. Bennett used the proceeds of the securities sale for improper purposes, including payments to earlier investors in the nature of a Ponzi scheme, to service debt, and "a variety of luxuries, including jewelry, high-end clothing, mystics and a $500,000 annual lease for a luxury suite at AT&T Stadium in Dallas."

The SEC is seeking to have Ms. Bennett and her company disgorge "all ill-gotten" gains from their activities, plus interest.

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