SEC bans Lee Weiss from the brokerage and investment advisory industry

Mr. Weiss and his firm will pay $8.4 million in relief to investors he duped in tobacco-related scheme
APR 16, 2015
Massachusetts resident Lee Weiss is barred from the brokerage and investment advisory industry for his fraudulent scheme involving a French company that claimed it could reduce the harmful effects of tobacco smoking, according to the Securities and Exchange Commission. Mr. Weiss, who resides in Newton, Mass., and his firm Family Endowment Partners LLC will pay about $8.4 million in relief to investors he duped, according to an SEC litigation announcement Wednesday. They've also been ordered to pay a combined $1.5 million civil penalty. The SEC alleged that from 2010 to 2012 Mr. Weiss and his registered investment advisory firm fraudulently advised clients and hedge funds to invest more than $40 million in securities issued by companies owned by Biosyntec, which claimed to have developed a cigarette filter that reduced the risk of lung cancer. Mr. Weiss held shares in the French company, which paid him more than $600,000 shortly after the investments were made. In settling the SEC's allegations, Mr. Weiss neither admitted nor denied its findings. The agency, which last year filed a complaint against him in federal court in Massachusetts, alleged he failed to disclose conflicts of interests to clients and how their investments were used. In 2011, for example, Mr. Weiss advised a client of Family Endowment to invest $2.5 million in a Biosyntec subsidiary, knowing the money would be used to pay delinquent interest owed to other clients of the firm, according to the SEC's complaint. He also recommended customers buy $8.25 million in the company's notes and stock, failing to disclose that the funds would pay financial obligations rather than benefit the company in which they invested. He also failed to disclose the "signficiant risk" that the notes would never be repaid. Mr. Weiss is the owner of Newton, Mass.-based registered investment advisory firm Family Endowment Partners. He was a registered representative with MIP Global Inc., a broker-dealer based in Puerto Rico, from June 2012 until February 2016, according to the SEC. Efforts to reach Mr. Weiss weren't immediately successful.

Latest News

SEC to lose Hester Peirce, deepening a commissioner crisis
SEC to lose Hester Peirce, deepening a commissioner crisis

The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships
Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships

Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management