SEC charges barred broker Anthony J. Mastroianni with $1.2m fraud targeting elderly

Rick Steves

Instead of using investor monies to generate income, Mastroianni withdrew over $486,000 of investors’ money from his firm’s bank account and used ill-gotten funds for personal expenses on luxury items, the SEC alleged. 

The Securities and Exchange Commission has charged Anthony J. Mastroianni, Jr. and his firms with violating the antifraud provisions.

The complaint, filed in federal district court in New Jersey, claims Mastroianni is connected to a $1.2 million fraudulent promissory note scheme targeting older Americans.

According to the SEC, he sold at least 11 investors promissory notes issued by his company, Global Business Development, beginning as early as 2017.

Mastroianni allegedly induced investors, ranging in age from 64 to 82, to purchase the notes by promising exorbitant interest rates ranging from 50% to 175%.

Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office, said: “We allege that Mastroianni 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on older Americans with an all too familiar promise of massively high returns when in reality their money was being withdrawn in cash and spent on purchases at Disney resorts, Tiffany & Co., and Gucci. We will continue to hold accountable those who target investors for their own financial gain.”

Mastroianni was barred by FINRA in 2016

In 2016, Mastroianni was barred by the Financial Industry Regulatory Authority (FINRA) from associating with any registered broker-dealer after refusing to appear for testimony to answer allegations of, among other things, excessive trading in an elderly customer’s account.

The SEC’s complaint claims Mastroianni gave investors conflicting explanations of the nature of Global’s business and often convinced them to roll-over their notes into new notes combining unpaid amounts with new investments by the investors.

Instead of using investor monies to generate income, Mastroianni withdrew over $486,000 of investors’ money from his firm’s bank account and used ill-gotten funds for personal expenses on luxury items, the SEC alleged.

The SEC seeks disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and permanent injunctive relief. In a parallel action, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Mastroianni.

SEC uncovered retail brokerage hacking scheme

Earlier this week, the SEC uncovered an online retail brokerage hacking scheme that allowed perpetrators to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds.

The financial watchdog charged 18 individuals for hacking dozens of online retail brokerage accounts in order to purchase microcap stocks to manipulate the price and trading volume of those stocks.

According to the complaint, hackers accessed at least 31 U.S. retail brokerage accounts and used them to purchase the securities of Lotus Bio-Technology Development Corp. and Good Gaming, Inc, stocks of which hackers already controlled large blocks.

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