December 20, 2012 Comments (0) Blog, Securities Fraud

SEC announces proceedings against Charlotte financial advisor.

(Last Updated On: July 17, 2015)

On December 19, 2012, the Securities and Exchange Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) Making Findings and Imposing Remedial Sanctions (Order) against Michael Passaro.

The Order finds that on January 28, 2011 Passaro pled guilty to securities fraud, wire fraud, mail fraud, and conspiracy to commit those three offenses, in violation of 15 U.S.C. §§ 78j(b) and 78ff; 17 C.F.R. § 240.10b-5.

Passaro, 49 years old, is a resident of Charlotte, North Carolina. Passaro was a registered representative (“RR”) at The Thornwater Company, L.P. (“Thornwater”) from 2000 to 2002. Passaro was next an RR at Sky Capital LLC (now known as Granta Capital LLC) (Sky Capital), a New York-based broker-dealer, from 2001 to 2008.

The counts of the criminal indictment under which Passaro pled guilty alleged that after Passaro began working at Thornwater through at least 2006, Passaro and others carried out a fraudulent scheme by soliciting millions of dollars from investors under false pretenses, manipulating the market for certain affiliated companies’ stocks, failing to use investors’ funds as promised, and misappropriating and converting investors’ funds without their knowledge.

The indictment further alleged that Passaro and others used material misrepresentations and omissions to cause individuals to invest in a series of purported investment opportunities, including private placements. The indictment also alleged that Passaro and others raised a total of approximately $140 million from investors through their fraudulent scheme. The indictment further alleged that Passaro and his co-defendants used those funds to enrich themselves, pay undisclosed commissions to brokers, and pay off earlier investors who had lost funds on prior purported investment opportunities. Passaro’s sentencing hearing has not yet been scheduled.

Based on the above, the Order bars Passaro from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. Passaro consented to the Order.

The foregoing information which is publicly available on the SEC’s website is being provided by The White Law Group.  The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group visit http://www.whitesecuritieslaw.com.

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