Unregistered Advisors Perpetrate Scheme While Concealing Disciplinary Histories

Posted on April 22nd, 2022 at 1:48 PM
Unregistered Advisors Perpetrate Scheme While Concealing Disciplinary Histories

From the Desk of Jim Eccleston at Eccleston Law:

The Securities and Exchange Commission (SEC) has filed suit against two unregistered advisors for hiding their disciplinary records from investors while engaging in a scheme that generated at least $9 million. 

Joseph DeVito and Dean Esposito allegedly solicited investments in Property Income Investors LLC, which purportedly was created to purchase and renovate multifamily properties. However, the SEC alleges that the sales were completed in violation of orders entered after past SEC enforcement actions, according to the suit filed in the U.S. District Court for the Southern District of Florida. DeVito and Esposito allegedly failed to inform potential investors about their disciplinary records, “including that they were enjoined from violating the offering and broker-dealer registration provisions and the antifraud provisions of both the Securities Act and the Exchange Act and had full associational and penny stock bars entered against them”, according to the SEC. 

The SEC further alleged that the unregistered advisors referred to themselves as “Dean Anthony” and “Salvatore DeVito” when talking to potential investors in an effort to hide their true identities and disciplinary histories. Property Income Investors paid Esposito and DeVito commissions of $245,750 and $246,750, respectively, according to the SEC. 

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

 

Tags: eccleston law, sec, financial advisors

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