SEC Unmasks Connecticut-Based Adviser's $5.9 Million Fraud Scheme

Posted on January 2nd, 2024 at 11:45 AM
SEC Unmasks Connecticut-Based Adviser's $5.9 Million Fraud Scheme

From the desk of Jim Eccleston at Eccleston Law 

The Securities and Exchange Commission (SEC) has unveiled a case of alleged fraud involving Connecticut-based unregistered investment adviser John A. Masanotti, Jr., and his company, Middlesex Mortgage Group LLC. The SEC contends that Masanotti and his firm engaged in deceptive practices, duping investors out of at least $5.9 million since 2016.

Masanotti and Middlesex Mortgage Group LLC stand accused of providing false information to investors, leading them to believe their funds were being handled responsibly and generating legitimate returns. The SEC alleges that Masanotti and his company also employed a Ponzi-like structure, using funds from new investors to make payments to existing ones. This scheme served to perpetuate the illusion of a successful investment operation. Moreover, the defendants are accused of misappropriating investor funds for Masanotti's benefit.

As reported by DIWire, Masanotti diverted client funds to pay for mortgages on properties owned by Masanotti's wife in Darien, Connecticut, and Bonita Springs, Florida. Additionally, investor funds were allegedly used to pay down credit card debt, acquire luxury vehicles, and secure a country club membership.

The SEC's complaint identifies Mary A. Ferrara, Masanotti's spouse, as a relief defendant. The SEC has sought certain preliminary relief measures to safeguard the assets of clients and investors affected by the alleged misconduct. Additionally, the SEC seeks disgorgement of all "unjust enrichment" from John A. Masanotti, Jr. and Mary A. Ferrara.

 

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

Tags: eccleston, eccleston law, sec

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