SEC Charges Two South Florida Men for Defrauding Venezuelan-American Investors in $5 Million Scheme

Posted on October 2nd, 2024 at 4:30 PM
SEC Charges Two South Florida Men for Defrauding Venezuelan-American Investors in $5 Million Scheme

From the desk of Jim Eccleston at Eccleston Law

The Securities and Exchange Commission (SEC) has filed a complaint against two South Florida men, Francisco Javier Malave Hernandez and Ricardo Javier Guerra Farias, for orchestrating a multi-million dollar investment fraud that targeted members of the Venezuelan-American community. As reported by AdvisorHub, the duo operated through a fake financial advisory firm, Toller Stern Financial Services, raising nearly $5 million by selling fraudulent promissory notes.

The SEC’s complaint highlights this case as an example of affinity fraud, where perpetrators exploit trust within a community- here, based on shared ethnic identity. The SEC alleges that Malave and Guerra falsely promised investors that their funds would be invested in legitimate ventures, including equities, cryptocurrencies, real estate, and foreign exchange markets using an automated trading platform. However, no trading profits materialized.

Instead, Malave and Guerra misappropriated investor funds, using the capital for Ponzi-like payments to other investors and diverting significant sums for personal use—$558,900 by Malave and $109,500 by Guerra. They misled investors about the financial condition of Toller Stern and commingled funds between Toller Stern and a related entity, Toller Asset.

The scheme collapsed in early 2022 when the firm ceased making interest payments to investors. Without admitting or denying the SEC's allegations, Malave, Guerra, and Toller Stern consented to a settlement. The SEC is seeking $3.25 million in restitution and penalties.

Eccleston Law LLC represents investors and financial advisors nationwide  in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next

Hiring Eccleston Law has been one of the best career decisions I have made and this "investment" to maintain my sterling regulatory record has been returned many times over.  If you are in a situation where you've been unfairly accused, don't hesitate to talk with Eccleston Law. They are the best.

Thomas C.

LATEST NEWS AND ARTICLES

May 6, 2025
SEC Charges Three Individuals in $284 Million Arizona Sports Complex Bond Fraud by Legacy Cares

The Securities and Exchange Commission has filed a civil enforcement action against Randall “Randy” Miller, Chad Miller, and Jeffrey De Laveaga for allegedly defrauding investors in two municipal bond offerings that raised $284 million.

May 5, 2025
FINRA Suspends Former TD Securities Representative for Improper Expense Charges

FINRA has suspended former TD Securities representative Kate Yumi Lam for 12 months and fined her $10,000 for improperly charging personal commuting and meal expenses to the firm's account.

May 2, 2025
Former Edward Jones Broker Indicted for Defrauding Elderly Widow

Federal prosecutors have indicted a former Edward Jones financial advisor on charges of wire fraud, mail fraud, money laundering, and tax violations after he allegedly stole more than $920,000 from a 77-year-old widowed client.