SEC Charges Colorado Man in Scheme Targeting Elderly Investors

Posted on December 3rd, 2013 at 1:01 PM

Gary C. Snisky, a self-described institutional trader in Longmont, Colorado, was charged by the Securities and Exchange Commission (SEC) with defrauding elderly investors into making purported investments in government-secured bonds as he used their money to pay his mortgage.

            The SEC alleges that Snisky primarily targeted retired annuity holders by using insurance agents to sell interests in his company, Arete LLC, which posed as a safe and more profitable alternative to an annuity. Investors were told that their funds would be used to purchase government-backed agency bonds at a discount, and Snisky, as an institutional trader, would use the bonds to engage in overnight banking sweeps.   However, Snisky did not purchase bonds or conduct any such trading. He misappropriated approximately $2.8 million of investor funds to pay commissions to his insurance agent salespeople and to make personal mortgage payments.

            According to the SEC’s complaint filed in federal court in Denver, Snisky wasable to raise at least $3.8 million from more than 40 investors in Colorado and several other states.  Beginning in August 2011, Snisky recruited veteran insurance salespeople who could sell the Arete investment to their established client bases that owned annuities, and created and provided all of the written documents that the hired salespeople used as offering materials to solicit investors.  The majority of investors in Arete used funds from IRAs or other retirement accounts. Following an initial influx of investors, Snisky organized at least two seminars where he met with investors and salespeople to deliver fraudulent account statements to mislead investors into believing their investments were performing as promised.

Related Attorneys: James J. Eccleston


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