The Securities and Exchange Commission filed charges against three advisors and agents for violations related to the sale of high-risk securities, according to WealthManagement.com.
The SEC charged Florida-based insurance agent Charles D. Oliver, California-based David P. Ortiz and his entity, DaveGlo Investment Group, Inc., and Kevin N. Richards, formerly of Laguna Niguel, California, in the matter. The defendants are accused of selling securities in unregistered offerings of oil and gas securities, acting as unregistered brokers, and failing to disclose financial conflicts of interest to clients.
Authorities said that from 2020 through 2021, the defendants marketed and sold investments in risky oil and gas securities to clients, many of whom lost their money.
Oliver allegedly marketed and sold approximately $52 million of investments in these securities to about 50 retail investors. According to the complaint, Oliver used his radio show, Hidden Wealth Radio, to solicit investors, and received over $4.3 million in transaction-based compensation for selling the unregistered securities, sponsored by Resolute Capital Partners LLC and Homebound Resources LLC.
“Oliver used a radio show and podcast he hosted, Hidden Wealth Radio, to reach a larger audience and to solicit additional investors. … During broadcasts, Oliver discussed investment and tax strategy while soliciting clients for his purported investment and tax advisory group Hidden Wealth Solutions,” Oliver’s “doing business as name,” the complaint alleges. He allegedly told some investors that the Resolute investments were not risky, while never disclosing the compensation he received from touting the securities.
The SEC also stated that Ortiz marketed and sold about $18 million of investments in oil and gas securities to approximately 20 retail investors. He allegedly used mass marketing, including commercials on radio broadcasts, to solicit investors, and received over $800,000 in transaction-based compensation for selling the unregistered securities.
Richards was accused of marketing and selling approximately $12 million of investments in oil and gas securities to approximately 25 retail investors. The complaint alleged that Richards used mass marketing, including his own radio show, to solicit investors, and that he received over $600,000 in transaction-based compensation for selling the unregistered securities.
Oliver, Ortiz, DaveGlo, and Richards were all charged with violating Sections 5(a) and (c) of the Securities Act of 1933 and Section 15(a) of the Securities Exchange Act of 1934. Oliver, Ortiz, and Richards were also charged with violating Section 206(2) of the Investment Advisers Act of 1940.
Ortiz, DaveGlo, and Richards did not admit or deny the allegations but each consented to the entry of a judgment enjoining them from violating the charged provisions; as to Ortiz and Richards, enjoining them from offering or selling securities; and as to Richards, enjoining him from acting as or associating with a broker, dealer, or investment adviser for five years.
The proposed settlements are subject to approval by the court, which will also determine the amount of disgorgement, prejudgment interest, and civil money penalties that each defendant shall pay.
In a response to the SEC charges filed in November, Oliver denied that he acted as an investment advisor for the clients involved and denied that he’d sold the oil and gas securities though he acknowledged he “informed some clients” that he’d participated in the offerings.
An attorney for Oliver did not respond to a request for comment prior to publication. Ortiz and Richards could not be reached for comment.
Hyman Cotter PC routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
