SEC Files Amended Complaint Charging Financial Adviser with Aiding and Abetting Offering Fraud
According to a press announcement on Monday, The Securities and Exchange Commission has charged Bradley C. Mascho, a Maryland-based financial adviser and former CFO of DJB Holdings, LLC, with aiding and abetting an offering fraud. The fraud allegedly involves Dawn J. Bennett and the sale of over $20 million in convertible and promissory notes.
As we told you in August, the SEC filed a complaint charging Dawn J. Bennett and her company, DJB Holdings, LLC, with fraud in connection with their sale of notes backed by the company.
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.
According to the SEC’s complaint, Bennett repeatedly misled investors regarding the financial condition of DJB Holdings, LLC and her plan to divert millions of dollars in investor funds to personal use.
The complaint also alleged that Bennett perpetuated her fraud by, among other things, lying to regulators and repaying investors with loan proceeds obtained through loan applications that substantially overstated her net worth.
On Monday, the SEC amended its complaint to add Mascho as a defendant. The amended complaint alleges that Mascho aided and abetted Bennett’s fraud by various means, including preparing false financial statements and related offering materials, lying to regulators and to his employer regarding his knowledge of and role in the sale of notes, facilitating Bennett’s efforts to target his firm’s brokerage customers, and attempting to disguise certain note sales by creating new, “backdated” notes as well as false affidavits misrepresenting the details of the note offering.
The U.S. Attorney’s Office for the District of Maryland, in a parallel case, unsealed criminal charges against Mascho.
Recovery of Investment Losses with Dawn J. Bennett
Brokerage firms are required to properly supervise all advisors they employ. They must ensure that their 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.
FINRA (The Financial Industry Regulatory Authority) operates the largest securities dispute resolution forum in the United States, and has extensive experience in providing a fair, efficient and effective venue to handle a securities-related dispute.
If you suffered losses investing with Dawn J. Bennett and DJB Holdings, the White Law Group may be able to help you to recover your losses through FINRA arbitration. For a free consultation with a securities attorney, please call the firm at 888-637-5510.
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.