SEC Charges Former Florida Broker in Alternative Investment Scheme

Posted on September 4th, 2019 at 4:18 PM
SEC Charges Former Florida Broker in Alternative Investment Scheme

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Securities and Exchange Commission ("SEC") has charged Boca Raton, Florida resident Scott P. Strochak, a former broker, with making material misrepresentations regarding an investment fund scheme that targeted retail investors, and for acting as an unregistered broker. Strochak participated in a fraudulent scheme that raised nearly $3.8 million from at least 17 retail investors. The SEC halted the scheme in February when it filed an emergency action against Castleberry Financial Services Group, LLC, its president T. Jonathon Turner and its CEO Norman M. Strell.

According to the SEC's complaint, Strochak solicited investors using false representations that Castleberry investments were bonded and insured by leading insurance companies, even after he received several complaints from investors who did not receive proof of such insurance. Strochak also allegedly misrepresented Castleberry's profitability, despite knowing that Castleberry denied some investors' requests to withdraw their principal due to insufficient funds. The complaint further alleges that Strochak was reckless in repeating Castleberry's false claims that it had grown by $600 million in capital and 300 investors in 2018 when he knew that he had brought in only about $2 million from about seven investors that year.

The SEC said Strochak agreed to a judgment that permanently enjoins him from violating the charged provisions of the federal securities laws, and orders him to pay disgorgement and prejudgment interest totaling $250,056, to be offset by any restitution order entered against him in the parallel criminal case. The settlement is subject to court approval.

In a parallel criminal action, the U.S. Attorney's Office for the Southern District of Florida criminally charged Turner, Strell, and Strochak in May 2019. Strochak pleaded guilty on August 16, 2019, and is awaiting sentencing.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

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