August 29, 2017 Comments (0) Blog, Current Investigations, Securities Fraud

Update: Dawn Bennett Charged With Defrauding Investors

Dawn Bennett
(Last Updated On: September 21, 2017)

SEC Charges Dawn Bennett and DJB Holdings in $20 Million Ponzi Scheme

Did you lose money investing with former financial advisor Dawn Bennett? If so, the securities attorneys at The White Law Group may be able to help you recover your losses through FINRA Arbitration.

The Securities and Exchange Commission announced today that it is charging former financial advisor Bennett with defrauding investors and spending their money on herself. Additionally, the SEC alleges Bennett with making Ponzi-like payments to earlier investors in the scheme.

According to the SEC’s complaint, Bennett and DJB Holdings LLC raised more than $20 million by selling notes issued by her company, a Washington, D.C. luxury sports apparel firm. Reportedly, Bennett exaggerated the safety of the notes and success of her firm, claiming it was a profitable business able to pay annual returns as high as 15 percent.

Bennett allegedly claimed investor funds would be used for corporate purposes, however she spent some on personal expenses and used other funds to repay earlier investors, similar to a Ponzi scheme. According to the SEC’s complaint, Bennett allegedly concealed the scheme, lying to regulators about the note sales, repaying investors with loans she obtained by inflating her net worth, and replacing existing convertible notes with fake promissory notes.

The U.S. Attorney’s Office for the District of Maryland, in a parallel case, unsealed criminal charges against Bennett.

Recovery of Investment Losses

Virginia Financial Advisor Dawn Bennett  first came in to the limelight in September 2015 when the Securities and Exchange Commission (SEC) charged her with fraud for claims made on her radio show and Facebook page, alleging that she was “grossly inflating” the assets she managed with her company Bennett Group Financial Services.

The White Law Group has represented several of Bennett’s clients and continues to investigate the liability that her FINRA registered employer, Western International Securities, may have for failure to properly supervise her.

Those claims generally allege breach of fiduciary duty, negligent supervision, and unsuitability and relate to high-risk bets on gold and gold investments.

Brokerage firms are required to properly supervise all advisors they employ and to ensure that those advisors are complying with applicable FINRA rules and regulations.  If these allegations can be proven and if it can be demonstrated that Bennett’s former employer failed to properly supervise her, her employer may be held responsible for the losses in a FINRA arbitration claim.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit http://www.whitesecuritieslaw.com.  For a free consultation with a securities attorney, please call the firm at 888-637-5510.