The Securities and Exchange Commission has obtained asset freezes and other emergency relief measures against two investment firms and their principals for allegedly selling pre-IPO shares that they did not own.
StraightPath Venture Partners, StraightPath Management, Brian K. Martinsen, Michael A. Castillero, Francine A. Lanaia and Eric D. Lachow allegedly pocketed undisclosed fees and commingled investor funds, resulting in Ponzi scheme-like payments, the SEC charged. The relief arose from fraud and registration charges filed by the agency.
The SEC alleges that the defendants, running an unregistered broker-dealer, raised at least $410 million from more than 2,200 investors from November 2017 through February 2022. The SEC also alleges that the defendants repeatedly told investors that each investment would be kept separate and that they were charging no upfront fees.
Instead, the SEC said in a release, the defendants freely commingled investor funds, paid themselves more than $75 million, and paid their sales agents nearly $48 million from illegal, undisclosed markups on the pre-initial public offering shares that were, in some cases, as high as 100%. The SEC alleges that a share deficit exists of at least $14 million across the funds.
The defendants also allegedly concealed from investors that two of the three founders, Castillero and Lanaia, ran the funds despite having been barred from the brokerage industry. The Financial Industry Regulatory Authority Inc. barred Castillero in 2019 and Lanaia in 2018.
The complaint, filed in federal district court in New York, seeks permanent injunctive relief, return of allegedly ill-gotten gains and civil penalties.
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
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.
