The Financial Industry Regulatory Authority said that Brookeville Capital Partners must pay over $1 million to victims and a $500,000 fine for securities fraud related to private placement offering sales. The self-regulatory organization has barred the firm’s president, Anthony Lodati, from the securities industry.
According to FINRA, from 1/11 to 10/11 Brookeville and Lodati bilked customers in the sale of Wilshire Capital Partners Group, LLC, a private placement offering in which investors were to have an indirect interest in pre-IPO offering shares of Fisker Automotive. The SRO said that while the firm was soliciting customers to invest in the private placement offering, Lodati discovered that John Mattera, a person with a regulatory and criminal background, made transactions for Wilshire as its CEO and managing director.
Rather than disclosing that the Securities and Exchange Commission had sanctioned Mattera in 2010 for securities fraud, and also that he’d been convicted of a felony in the state of Florida in 2003, the firm and Lodati purportedly withheld this information, as well as information about Mattera’s connection to Wilshire, on purpose and kept soliciting investors. Brookeville sold more than $1 million of interests in the Wilshire offering to 29 customers and was paid over $104,000 in commissions.
In 2011, the Commission filed a fraud case against Mattera and other individuals over a scam that involved Wilshire and his bilking of investors of $13 million. Mattera was also convicted in criminal court and ordered to serve prison time.
The regulator was able to get a court order to freeze Wilshire’s assets, including the interests belonging to Brookeville customers. These customers lost all of their investment.
By settling, Brookeville and Lodati are not denying or admitting to the SEC charges.
At Shepherd Smith Edwards and Kantas, LTD LLP, our securities lawyers help investors recover their fraud losses. Contact our private placement fraud law firm today.
More Blog Posts:
Wealthfront CEO Claims Schwab is Fooling Investors Over “Free” Automated Investment Platform, Stockbroker Fraud Blog, March 9, 2015
Appellate Court Says Charles Schwab & Co. Must Face Financial Advisory Firm’s Lawsuit Over Mortgage Debt Involving Bond Funds, Institutional Investor Securities Blog, March 9, 2015
District Court Imposes $26M Commodity Pool Fraud Penalty, Stockbroker Fraud Blog, March 7, 2015