Former Sterne Agee Broker Faces Expulsion For Running Undisclosed Hedge Fund

Posted on July 15th, 2014 at 9:00 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Dean Mustaphalli, a former Sterne Agee Financial Services Inc. broker, could be expelled for allegedly running a $6 million hedge fund without informing his brokerage firm.

Mustaphalli founded the hedge fund, Mustaphalli Capital Partners, and solicited money for the fund from at least 25 investors during 2011. He managed the fund through Mustaphalli Advisory Group without disclosing the relationship between the fund and the investment advisor. Mr. Mustaphalli received a performance fee and his investment advisor received a management fee from the hedge fund.

After he was fired from Sterne Agee, Mustaphalli continued to solicit clients for the fund through Mustaphalli Advisory Group.

Between April and August of 2011, Mr. Mustaphalli received approximately $41,800 in management fees. Meanwhile, the value of the fund, which invested in publicly traded equity and debt securities, declined by approximately 90%. Those losses may be recovered by investors. 

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


Return to Archive



This was the best of all possible outcomes and I cannot thank you and the team enough.

Michael S.


October 20, 2021
5 First-of-Their-Kind SEC Enforcement Actions Announced

Securities and Exchange Commission (SEC) Enforcement Director Gurbir Grewal recently discussed notable first-of-their-kind enforcement actions that his division has pursued.

October 19, 2021
FINRA Targets SPACs in Most Recent Exam Sweep

The Financial Industry Regulatory Authority (FINRA) has begun an examination sweep of advisors’ involvement with special purpose acquisition companies (SPACs).

October 18, 2021
SEC’s Statement on Complex Exchange-Traded Products

The Securities and Exchange Commission (SEC) recently voted to approve a pair of rule changes proposed by Cboe BZX Exchange, Inc. to list and trade shares of new exchange traded-products: the 2x Long VIX Futures ETC and the -1x Short VIX Futures ETF.