SEC charges former brokers with illegal securities sales

The Securities and Exchange Commission has charged two former registered representatives, Minish “Joe” Hede and Kevin Graetz, with acting as unregistered brokers in the sale of $9.6 million in notes issued by Belize Infrastructure Fund I.

According to the SEC’s complaint, the two were engaged in selling away since Paulson Investment Co., the New York-based firm where they were employed, had already declined to approve the notes for offer and sale to its customers.

The complaint also alleges that Hede and Graetz profited through the commissions from the sales, while the customers suffered significant losses.

In 2018, the SEC charged Belize Fund and its owner, Brent Borland, alleging that Borland misappropriated more than $5.98 million of funds obtained from investors in Belize Fund notes and used the stolen principal to fund his family’s lavish lifestyle.

In its case against Hede and Graetz, the SEC is seeking injunctive relief, disgorgement of ill-gotten gains and prejudgment interest, and civil money penalties.

Hede and Graetz were terminated by Paulson in March 2017. The Financial Industry Regulatory Authority Inc. barred them from the securities industry beginning in February 2018 for failing to cooperate in investigations into their dealings.

[More: SEC orders firm to pay more than $1 million over 12b-1 fees]

The post SEC charges former brokers with illegal securities sales appeared first on InvestmentNews.

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