Exceptional and accessible legal representation across Kentucky and Nationwide

Exceptional and accessible legal representation across Kentucky and Nationwide


SEC: barred broker sold fraudulent promissory notes to older clients

On Behalf of | Aug 30, 2022 | Securities Fraud |

In 2016, the Financial Industry Regulatory Authority (FINRA) barred a New Jersey man, the owner of Global Business Development and Consulting Corp., from continued securities activities. He had refused to appear for testimony in a case against him alleging that he traded excessively on an elderly customer’s account.

In 2017, that former broker and his company, Global, apparently began a new scam. The man sold $1.2 million worth of promissory notes for Global. According to the SEC, those notes were fraudulent. Global did not have the capital to cover them. Moreover, the barred broker didn’t use the money from the notes to generate income for the company but instead used it to buy luxury items. The scheme targeted people ranging from 64 to 82.

“We allege that [the barred broker] preyed on older Americans with an all too familiar promise of massively high returns when in reality their money was being withdrawn in cash and spent on purchases at Disney resorts, Tiffany & Co., and Gucci,” said a spokesperson for the SEC.

The SEC has charged the man with violating the antifraud provisions of the federal securities laws. It is seeking return of the ill-gotten gains, interest, penalties and a permanent injunction. The state of New Jersey has also charged the man with financial crimes.

The SEC’s investigation into the alleged fraud is ongoing.

This fraud involved a red flag: a promise of exorbitant returns

According to the SEC’s complaint, the Global promissory notes involved in this scheme allegedly promised returns of between 50% and 175%. These figures are eye-popping and very tempting, especially to those who need to increase their returns substantially due to an underperforming retirement portfolio.

A promise of surprisingly high returns on investment is a red flag that a potential investment might be fraudulent.

Other common red flags include:

  • Returns that are guaranteed
  • Time pressure to buy
  • Manipulative sales tactics
  • It just sounds too good to be true

Defrauded investors may have a claim for damages

If you think someone may have defrauded you, talk to an attorney familiar with securities fraud. You can find out the truth and, in many cases, fight back. FINRA does more than punish bad actors in the securities industry, as it had in this case. It also offers dispute resolution services for investors. A FINRA mediation or arbitration could result in the return of some of your money.

FindLaw Network