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SEC charges broker and company with defrauding older investors

On Behalf of | Sep 1, 2022 | Investment Loss

A New Jersey broker and his company have been charged with orchestrating a fraudulent scheme that targeted older investors, the Securities and Exchange Commission announced.

The charges were contained in a complaint filed by the SEC in federal court against Global Business Development and Consulting Corp. and its owner, 48-year-old Anthony J. Mastroianni, Jr. of Manalapan.

The commission said that beginning as early as 2017, Mastroianni induced at least 11 investors to purchase promissory notes issued by Global. He allegedly promised the investors exorbitant interest rates of 50% to 175%. He also often convinced them to roll-over their promissory notes into new notes that combined unpaid amounts with new investments, the complaint stated.

Instead of using the investors’ funds to generate income, the SEC said Mastroianni diverted their money for his own use. He allegedly withdrew over $486,000 of investors’ money from Global’s bank account and used their funds for personal expenses on luxury items. In total, the alleged scheme defrauded investors out of $1.2 million.­

“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on older Americans with an all too familiar promise of massively high returns when in reality their money was being withdrawn in cash and spent on purchases at Disney resorts, Tiffany & Co., and Gucci,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office.

The SEC said Mastroianni gave conflicting accounts of the nature of Global’s business to the investors, who ranged in age from 64 to 82. He and his company were charged with violating the antifraud provisions of the federal securities laws. Regulators are seeking disgorgement of the ill-gotten gains with prejudgment interest, along with civil penalties and permanent injunctive relief.

Previously, Mastroianni was barred by FINRA in 2016 from associating with any registered broker-dealer after he refused to appear for testimony over alleged excessive trading in an elderly customer’s account and other allegations.

In a parallel action, the U.S. Attorney’s Office announced criminal charges of mail and wire fraud against Mastroianni.

Lewitas Hyman 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 Lewitas Hyman at (888) 655-6002 or through our online contact form for a no-cost evaluation of your matter.