Galvin claims software developer defrauded investors in trading scheme

Galvin claims software developer defrauded investors in trading scheme
Bruce S. Horowitz charged big upfront fees but never invested any of his clients' money, the Massachusetts regulator claims.
DEC 12, 2016
The head of the state securities department in Massachusetts charged a man and his trading software company with fraudulently taking money to trade in securities, and then failing to execute any trades. Secretary of the Commonwealth William F. Galvin called for banning Bruce S. Horowitz and his company, Massive Abundance from the securities business in Massachusetts, to cease all activities, and to make full restitution to its investors, according to the complaint notice. The company and Mr. Horowitz were never registered with the state to operate in the securities market. Over the last two years, Mr. Horowitz solicited money from various investors from Massachusetts, and charged upfront fees of at least 200% of the value of the investors' trading capital, the notice said. He found his victims through attending other financial advisers' “meet-up” group seminars on equity index annuities. At the seminars, Mr. Horowitz approached potential investors with the claim that he had developed a proprietary trading software that would generate high returns and profits through trading in futures and equities. According to the notice, Mr. Horowitz met a 54-year-old victim from Newton, Mass., who gave Mr. Horowitz $15,000. The victim was charged $10,000 in upfront fees and was issued a memorandum of understanding that Massive Abundance would keep half of the trading profits as a trading fee. The notice said Mr. Horowitz told the victim, “looking forward to making us both mega-bucks.” The $5,000 trading capital was never invested. The notice said Mr. Horowitz claimed he did not trade because his software system “could not properly manage the market volatility of 2015.” “This case highlights the need for investors to check on persons offering investment advice, no matter how rosy the picture of anticipated returns,” said Mr. Galvin in the notice. Mr. Horowitz has a record of attempted grand larceny in New York from 1985, when he was an officer of Omnibus Brokerage Inc., the notice said. He was ordered to pay restitution and was given three years probation. In 1988, Mr. Horowitz registered with Allegiance Securities, Inc., as a corporate securities representative – a role he held for seven months. He developed the trading software in 1999, and set up Massive Abundance in 2006, according to the notice. Mr. Horowitz could not be reached for comment.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave