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REGISTERED INVESTMENT ADVISERS CHARGED WITH STEALING FROM CLIENTS, INCLUDING MIKE TYSON
By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Thursday, February 23, 2017.
Erwin J. Shustak
Managing Partner
Location: San Diego, California
New York, New York
Phone: (619) 696-9500 (Ext. 109)
(800) 496-5900 (Ext. 109)
Email: [email protected]
Erwin Shustak, Esq.
619.696.9500 ex. 109
[email protected]
Two recent instances of RIA’s stealing from clients highlights, once again, the incredible risk to all investors who entrust their life savings to investment professionals.
The first involves Mike Tyson’s former investment advisor, Brian Ourand of Washington, D.C. Last Spring, the SEC found Mr. Ourand, the former president of now defunct SFX Financial Advisory Management Enterprises, Inc., guilty of misappropriating (ie. stealing) funds from the firm’s clients, who included many professional athletes. Last month, Mr. Ourand plead guilty to a federal criminal charge and admitted taking $250,000 from former heavyweight champion Mike Tyson, and $500,000 from former NBA star Glen Rice and at least two other pro athletes. Prosecutors alleged Ourand took the athlete’s checks, made them out to himself, or to “cash” and also made bogus wire transfers. Attorneys said Ourand used the money for hotel stays, tanning services, dry cleaning, shopping, and dental work. He awaits sentencing.
The second case involves a charge by the SEC against Connecticut based Sentinel Growth Fund Management and its founder-owner, Mark J. Varacchi, alleged to have stolen $3.95 million from investors. In its complaint, the SEC alleges that Varrachi and his firm misrepresented to investors that money they deposited with Sentinel would be allocated to up-and-coming hedge fund managers for investment purposes. Instead, Mr. Varacchi and Sentinel allegedly commingled investor assets and manipulated account activity, account balances, and investment returns “as part of a scheme to siphon away investor funds,” according to an SEC press release. The SEC alleges that Varacchi and his firm used more than $1 million of the stolen money to settle litigation brought by the adviser’s former employer.
Shustak Reynolds & Partners, p.c. focuses in the areas of securities, financial services and complex business disputes. For more information, contact our managing partner, Erwin Shustak. More information is available at www.shufirm.com.
