SEC Obtains Emergency Relief To Halt Alleged Ponzi Scheme
From the desk of Jim Eccleston at Eccleston Law:
The Securities and Exchange Commission (SEC) has successfully obtained emergency relief, including asset freezes, against two investment advisory firms and their owners for allegedly selling pre-IPO shares that they did not own.
The SEC has charged StraightPath Venture Partners, StraightPath Management, Brian Martinsen, Michael Castillero, Francine Lanaia, and Eric Lachow with allegedly collecting unauthorized fees and commingling investor funds. The defendants generated at least $410 million from nearly 2,200 investors through an unregistered advisory firm between November 2017 and February 2022, according to the SEC. The SEC additionally alleged that the defendants falsely informed investors that each investment would be kept separate and that there would be no upfront fees.
However, the defendants proceeded to commingle investor funds and fraudulently collect at least $75 million, according to the SEC. The SEC also alleged that the defendants concealed from investors that Castillero and Lanaia were illegally operating the funds because they were each previously barred from the industry. The Financial Industry Regulatory Authority (FINRA) barred Castillero in 2019 and Lanaia in 2018. The SEC’s complaint seeks permanent injunctive relief, disgorgement and civil penalties.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.
Tags: eccleston law, sec, ponzi scheme