The Securities and Exchange Commission has charged former broker and New York City resident Craig A. Zabala for defrauding investors in his company, Concorde Group Holdings Inc.
The SEC alleges that, between February 2015 and August 2019, Zabala raised approximately $4.4 million from 17 investors throughout the United States, purportedly to develop Concorde into a merchant bank for mid-sized companies and to invest in affiliate entities.
As alleged in the SEC’s complaint, Zabala misrepresented to investors that Concorde had raised more than $24 million and was close to completing a $25 million offering. The SEC also alleges that Zabala misappropriated more than $3 million of investor funds by making almost $2 million in unauthorized payments to himself and his girlfriend, Doreen McCarthy, and $1.2 million in Ponzi-like payments to earlier investors in an affiliate company.
Zabala allegedly used investor funds for personal expenses, including car payments and international travel expenses for himself and McCarthy.
The SEC’s complaint charges Zabala with violating the antifraud provisions of various federal securities laws. The SEC seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties. The complaint also names McCarthy as a relief defendant in connection with her receipt of ill-gotten gains without a legitimate claim to those funds.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Zabala.
According to his BrokerCheck profile, he was barred by FINRA last August for failing to provide documents and information in connection with the regulator’s review of his outside business activities and his potential participation in private securities transactions. The findings stated that Zabala provided a partial, but incomplete, response to FINRA’s request.
Zabala spent 15 years in the financial services industry, and was most recently affiliated with John Loofbourrow Associates, Torsiello Securities, among others.