SEC charges ex-Connecticut rep with $1 million fraud

Agency says he diverted elderly clients' money to his own accounts
SEP 01, 2017
By  Bloomberg

The SEC has charged Leon Vaccarelli, a former broker who had been affiliated with The Investment Center in Waterbury, Conn., with persuading several elderly customers to invest with him and then spending their money on his own living and business expenses. In its complaint, the Securities and Exchange Commission states that Mr. Vaccarelli defrauded clients of more than $1 million. The agency is seeking an asset freeze against Mr. Vaccarelli individually as well as his firm, which did business as Lux Financial Services. The agency alleges that instead of investing the customers' money in conventional brokerage accounts and separately managed accounts as promised, Mr. Vaccarelli deposited client funds into his personal and business bank accounts. He allegedly commingled the funds with his own money and used them for his own purposes, and in some instances he used customer funds to pay returns to earlier investors. According to the SEC's complaint, Mr. Vaccarelli asked one customer to sign an agreement that she would not provide certain information to the Financial Industry Regulatory Authority or the SEC. Mr. Vaccarelli was associated with The Investment Center, an independent broker-dealer, from 2011 through July 2017, when he was discharged for failing to comply with company policy regarding access to his office and computer during an examination. In November 2015, without admitting or denying charges, Mr. Vaccarelli consented to a one-month suspension and payment of $7,500 in connection with Finra's findings that he did not have written authorization to place discretionary trades for certain accounts and that The Investment Center had not approved and accepted the accounts as discretionary. The findings also stated that he had falsely certified that he did not handle any retail accounts on a discretionary basis on four annual firm compliance questionnaires. Mr. Vaccarelli began his securities career in 1999 at a predecessor of Ameriprise Financial Services. He was with QA3 Financial Corp. from 2007 to 2011 before joining The Investment Center.

Latest News

Investing for accountability: How to frame a values-driven conversation with clients
Investing for accountability: How to frame a values-driven conversation with clients

By listening for what truly matters and where clients want to make a difference, advisors can avoid politics and help build more personal strategies.

Advisor moves: Raymond James ends week with $1B Commonwealth recruitment streak
Advisor moves: Raymond James ends week with $1B Commonwealth recruitment streak

JPMorgan and RBC have also welcomed ex-UBS advisors in Texas, while Steward Partners and SpirePoint make new additions in the Sun Belt.

Cook Lawyer says fraud claims are Trump’s ‘weapon of choice’
Cook Lawyer says fraud claims are Trump’s ‘weapon of choice’

Counsel representing Lisa Cook argued the president's pattern of publicly blasting the Fed calls the foundation for her firing into question.

SEC orders Vanguard, Empower to pay more than $25M over failures linked to advisor compensation
SEC orders Vanguard, Empower to pay more than $25M over failures linked to advisor compensation

The two firms violated the Advisers Act and Reg BI by making misleading statements and failing to disclose conflicts to retail and retirement plan investors, according to the regulator.

RIA moves: Wells Fargo pair joins &Partners in Virginia
RIA moves: Wells Fargo pair joins &Partners in Virginia

Elsewhere, two breakaway teams from Morgan Stanley and Merrill unite to form a $2 billion RIA, while a Texas-based independent merges with a Bay Area advisory practice.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

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.