Former Stratton Oakmont broker charged with fraud

The Securities and Exchange Commission on Friday charged a former Stratton Oakmont Inc. broker with fraud in a case involving an online stock-tip business and stolen investor funds.
The former broker, Anthony Coronati of Staten Island, and his New Jersey-based company, Bidtoask, have agreed to settle the SEC’s charges. According to the SEC, Mr. Coronati must pay back $400,000 in funds stolen from investors, and the money will be deposited into a fund for distribution to victims of the fraud. He also agreed to be barred from the securities industry permanently.
The SEC charged that Mr. Coronati initially posed as an investment adviser to a hedge fund that would invest in equity securities. The fund was ficititious, however, and Mr. Coronati went on to defraud investors in additional schemes involving his company.
Mr. Coronati and Bidtoask sold membership interests in the company that were to be invested in supposedly promising technology companies that had yet to hold initial public offerings, according to the SEC. Investors were led to believe that Bidtoask would invest directly in pre-IPO Facebook shares without charging any fees, commissions or markups to investors.
“But Bidtoask’s Facebook-related investments actually did require the payment of significant fees that Coronati and Bidtoask concealed from investors,” the SEC charged. “Bidtoask did not even own the shares of other technology companies in which it was supposedly investing, and these companies were not actually in the process of an IPO.”
Mr. Coronati could not be reached for comment.
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The Financial Industry Regulatory Authority Inc.’s BrokerCheck service shows that Mr. Coronati has not been licensed as a broker since 1999.
His Finra registration shows an employment history starting with Stratton Oakmont from October 1993 to September 1996. Finra expelled the firm in June 1998.
Stratton Oakmont, the storied chop shop upon which the film “The Wolf of Wall Street” was based, defrauded investors out of more than $200 million at its Long Island, N.Y., offices. Stratton Oakmont founder Jordan Belfort served a four-year jail term, and shoe designer Steve Madden served 31 months behind bars for securities fraud and money-laundering charges related to an IPO launched through the firm.
From Stratton Oakmont, Mr. Coronati moved on to act as a broker at several New York firms from 1996 to 1999, including The J.B. Sutton Group, Ash & Co. and Bennett Mullaney & Co.
More recently, Mr. Coronati has launched himself in a career as an actor and producer, including playing the role of Little Mikie in the film “Once Upon a Time in Brooklyn.”
His IMDB.com biography reports that he served as an investment banker underwriting the IPO of more than two dozen companies, including Steve Madden Shoes in 1993.
“Life is too short to settle for anything less than what you truly deserve and desire,” reads Mr. Coronati’s personal quote on his IMDB page.
According to the SEC’s order for a settled administrative proceeding, Mr. Coronati conducted his most recent schemes between 2009 and 2013, but they started to unravel when investors started asking questions.
“Coronati placated certain investors by making Ponzi-like payments to them using other investors’ money, and he sent a phony account statement to at least one investor purporting a position in the fake hedge fund that was worth more than $120,000,” the SEC said.
Meanwhile, Mr. Coronati used his ill-gotten gains to pay for a Caribbean vacation and plastic surgery, and he also used investor money to purchase securities in a brokerage account held in his own name, the SEC said.