United States
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United States SEC Charged 3 New York Residents for Pre-IPO Fraud Raising $184 Million from Investors in 2019 to 2022 & Receiving $45 Million in Fees, Both Pre-IPO Companies StraightPath & Legend are Now under Court-Ordered Receiverships, Had Marked Up Prices of Both Shares by 19% to 105%

11th June 2024 | Hong Kong

The United States Securities & Exchange Commission (SEC) has charged 3 New York residents (Mario Gogliormella, Steven Lacaj & Karim Ibrahim) for pre-IPO fraud raising $184 million from investors in 2019 to 2022, and receiving $45 million in fees.  Both Pre-IPO companies StraightPath & Legend are now under court-ordered receiverships.  The 3 New York residents (Mario Gogliormella, Steven Lacaj & Karim Ibrahim) had marked up prices of both shares (StraightPath & Legend) by 19% to 105%.  United States SEC (7/6/24):  “The Securities and Exchange Commission today charged three individuals with fraud for selling unregistered membership interests in LLCs that purported to invest in shares of pre-IPO companies, first on behalf of StraightPath Venture Partners LLC, the subject of the Commission’s emergency action in May 2022, and, later, on behalf of Legend Venture Partners LLC, the subject of the Commission’s emergency action in June 2023. Both StraightPath and Legend are now under court-ordered receiverships.  In this new action, the SEC alleges that New York residents Mario Gogliormella, Steven Lacaj, and Karim Ibrahim directed an unregistered sales force of more than 50 callers in boiler rooms to pressure investors into making investments without telling them that the shares had been substantially marked up—between approximately 19 and 105 percent on average above the prices that StraightPath or Legend had paid for the underlying shares. As a result of these tactics, the defendants and their sales force allegedly pocketed more than $45 million in fees from unsuspecting investors from 2019 to 2022 … … The SEC’s complaint charges the defendants with violating antifraud and other provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties. The SEC also charged Adam Ibrahim, Karim Ibrahim’s brother, as a relief defendant.  The U.S. Attorney’s Office for the Southern District of New York today unsealed an indictment charging Gogliormella, Lacaj, and Karim Ibrahim with securities fraud, among other offenses, in connection with their work for StraightPath and Legend.  The SEC’s ongoing investigation is being conducted by Joshua D. Tannen and Lee A. Greenwood of the Asset Management Unit and Sushila P. Rao, Suzanne M. Bettis, Megan Genet, Tiantong Wen, Douglas Smith, Kerri L. Palen, Patricia Schrage, Daniel Loss, Alistaire Bambach, and Steven G. Rawlings of the New York Regional Office. It is being supervised by Mr. Pollock. The litigation will be led by Ms. Rao, Mr. Tannen, and Ms. Bettis and supervised by Mr. Loss and Mr. Pollock.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York and the U.S. Postal Inspection Service.  Investors can learn more about the risks of investing in pre-IPO offerings in this Investor Alert.  The pre-IPO space remains a priority area for the Division of Enforcement and the New York Regional Office. In addition to the prior StraightPath and Legend actions, the New York Regional Office has also filed other charges in other matters, including 1) In December 2023, the Commission charged five individuals and four companies in a $528 million pre-IPO fraud, 2) In March 2023, the SEC charged three StraightPath sales agents with fraud and unregistered broker activity, 3) In December 2020, the SEC charged a boiler room operator with defrauding retail investors in the sale of pre-IPO shares.”  In 2023 March, the United States Securities & Exchange Commission (SFC) has charged 3 sales agents of StraightPath Venture Partners for fraud & selling Pre-IPO shares (not registered broker-dealers), with 4 principals of StraightPath Venture Partners already charged in 2022 for the $410 million fraud.  

“ United States SEC Charged 3 New York Residents for Pre-IPO Fraud Raising $184 Million from Investors in 2019 to 2022 & Receiving $45 Million in Fees, Both Pre-IPO Companies StraightPath & Legend are Now under Court-Ordered Receiverships, Had Marked Up Prices of Both Shares by 19% to 105% “

 



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Sheldon L. Pollock, Associate Director of the New York Regional Office: “We allege that the fraud in this case is like a Hollywood movie where the defendants ran boiler rooms using scripts they referred to as the ‘Bible,’ engaged in high-pressure sales tactics, and employed outright falsehoods to defraud investors.  After the SEC shut them down the first time, they simply rebranded their outfit, and today through our action we are seeking to ensure that they are held accountable for enticing and lying to investors.”

 

 

 

United States SEC Charged 3 Sales Agents of StraightPath Venture Partners for Fraud & Selling Pre-IPO Shares, 4 Principals Charged in 2022 for $410 Million Fraud

United States

25th March 2023 – The United States Securities & Exchange Commission (SFC) has charged 3 sales agents of StraightPath Venture Partners for fraud & selling Pre-IPO shares (not registered broker-dealers), with 4 principals of StraightPath Venture Partners already charged in 2022 for the $410 million fraudUnited States SEC: “The SEC complaint alleges that, between November 2017 and November 2021, Hollender, Migliano, and Vecchio actively solicited investments for interests in funds that were set up as series LLCs, each of which purported to acquire shares of a single pre-IPO company. The defendants allegedly provided investors with marketing materials, advised investors on the supposed merits of the investments, and received transaction-based compensation, all hallmarks of a broker, despite not being registered as brokers. As alleged in the complaint, defendants collectively solicited at least $13 million in investments from at least 115 investors, and, even though each of the defendants received upfront commissions of approximately 10 percent on investments they successfully solicited, the defendants falsely told investors that there were no upfront fees associated with their investments. According to the complaint, the defendants collectively received at least approximately $3.7 million in transaction-based compensation.”  Antonia M. Apps, Director of the New York Regional Office: “StraightPath Venture Partners could not have cheated investors without the unregistered sales agents who fraudulently solicited them.  The SEC will continue to hold individuals accountable for their wrongdoing, including a failure to register.”  See below for full statement:

 

 

United States SEC Charged 3 Sales Agents of StraightPath Venture Partners for Fraud & Selling Pre-IPO Shares

SEC Charges Three Sales Agents at StraightPath Venture Partners With Fraud and Unregistered Broker Activity

23rd March 2023 – The Securities and Exchange Commission today charged Scott Hollender, Gabriel Migliano, Jr., and Frank Vecchio for selling interests in shares of pre-IPO companies on behalf of StraightPath Venture Partners LLC, despite not being registered broker-dealers, and for misleading investors about the fees associated with those investments. The Commission previously charged StraightPath Venture Partners, StraightPath Management LLC, and its four principals in May 2022 in connection with a $410 million fraud.

The SEC complaint alleges that, between November 2017 and November 2021, Hollender, Migliano, and Vecchio actively solicited investments for interests in funds that were set up as series LLCs, each of which purported to acquire shares of a single pre-IPO company. The defendants allegedly provided investors with marketing materials, advised investors on the supposed merits of the investments, and received transaction-based compensation, all hallmarks of a broker, despite not being registered as brokers. As alleged in the complaint, defendants collectively solicited at least $13 million in investments from at least 115 investors, and, even though each of the defendants received upfront commissions of approximately 10 percent on investments they successfully solicited, the defendants falsely told investors that there were no upfront fees associated with their investments. According to the complaint, the defendants collectively received at least approximately $3.7 million in transaction-based compensation.

“StraightPath Venture Partners could not have cheated investors without the unregistered sales agents who fraudulently solicited them,” said Antonia M. Apps, Director of the New York Regional Office. “The SEC will continue to hold individuals accountable for their wrongdoing, including a failure to register.”

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges defendants with violating antifraud and other provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties. The complaint also names GSH Empire Inc. and 21st Century Gold & Silver Inc., entities controlled by Hollender and Vecchio, respectively, as relief defendants for purposes of recovering ill-gotten gains that Hollender and Vecchio generated through their alleged conduct.

The SEC’s ongoing investigation is being conducted by Megan R. Genet, Tian Wen, Douglas J. Smith, Lee A. Greenwood, Daniel Loss, Patricia Schrage, Alistaire Bambach, and Steven G. Rawlings of the New York Regional Office (NYRO), with assistance from Suman Beros. It is being supervised by Sheldon L. Pollock. The litigation will be led by Mr. Loss, Ms. Wen, and Ms. Genet. Assistance was provided by Ronald Krietzman, Michael McAuliffe, and Stephen DeBella of the NYRO Broker-Dealer and Exchange Program. The SEC appreciates the assistance of the Financial Industry Regulatory Authority; the Office of the Montana State Auditor, Commissioner of Securities and Insurance; and the New Jersey Bureau of Securities.

Investors can learn more about the risks of working with unregistered investment professionals by reading such SEC investor bulletins as 10 Red Flags That An Unregistered Offering May Be A Scam and Private Placements Under Regulation D.




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