An unregistered investment advisor in New Jersey has been charged with defrauding clients with false statements and misrepresentations, according to Financial Advisor.
The Securities and Exchange Commission filed a complaint against 46-year-old Joel B. Sofia in U.S. District Court for the District of New Jersey. The SEC accused Sofia of violations that took place from at least July 2019 through January 2023 while he was managing brokerage accounts and trading options for at least three of his advisory clients.
The SEC alleged that, “in soliciting the clients, Sofia lied about his professional background and experience in the finance industry, falsely guaranteed that the clients would not lose money, and deceived at least two clients regarding his purported development and use of proprietary trading software.” He was reported to have made false claims that the development of proprietary or automated trading systems eliminated downside risk.
According to the complaint, Sofia convinced his clients to provide him with direct access to their brokerage accounts so that he could place trades on their behalf. It was alleged that by January 2023, Sofia’s fraud had caused total client losses of more than $1.6 million. Individual account losses ranged from approximately 60% to 89% of their starting balances. One client who began with approximately $1.2 million allegedly lost more than $1 million. Another lost about $500,000 from an account that started at $956,489.98.
When clients raised concerns about the losses, Sofia allegedly blamed them or made promises to recover the money, and eventually stopped communicating with them.
The SEC determined that Sofia was never registered with the commission, never held a securities license and was never associated with a registered broker-dealer, and that his firm, WOLO Wealth Inc, was not actually a corporation, but simply a name Sofia used to conduct business.
In its complaint, the SEC alleged Sofia violated sections of the Investment Advisers Act by engaging in fraudulent conduct and breaching his fiduciary duties to clients. The commission is seeking a jury trial and asking for a permanent injunction barring Sofia from violating federal securities laws, a lifetime ban from acting as or associating with an investment advisor or broker, and civil monetary penalties.
Sofia could not be reached by press time, Financial Advisor said.
Hyman Cotter 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 at (844) 316 8277 or through our online contact form for a no-cost evaluation of your matter.
