SEC Settles Charges Against Three StraightPath Sales Agents for Unregistered Broker Activity
The U.S. Securities and Exchange Commission settled charges against three sales agents from StraightPath Venture Partners – Anthony Guarino, Robert Seropian, and Frank Vecchio – for unregistered broker activity, including selling membership interests in LLCs that purported to invest in shares of pre-IPO companies.
According to the SEC’s orders against Guarino and Seropian and the previously filed complaint against Vecchio, each of them 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. The SEC’s orders against Guarino and Seropian found, and the SEC’s complaint against Vecchio alleged, that they collectively solicited upwards of $17 million in funds from at least 75 investors and obtained approximately $2.1 million in transaction-based compensation among them.
The SEC’s order against Guarino also finds that he actively solicited investments for interests in funds managed by Legend Venture Partners, another investment adviser that purported to invest in shares of pre-IPO companies and that was previously charged by the Commission with fraud and other violations. The SEC’s complaint against Vecchio also alleged that he made false or misleading statements to investors he solicited on behalf of StraightPath Venture Partners regarding the fees he and the manager of the funds received.
According to filings, 67-year-old Guarino successfully solicited close to $4 million in investments in the StraightPath and Legend Funds from at least 12 investors. Through his unregistered conduct brokering transactions between these investors and the StraightPath and Legend Funds, Guarino obtained more than $385,000 in transaction-based compensation. Seropian, age 58, successfully solicited more than $11.5 million in investments in the StraightPath Funds from at least 42 investors. Through his unregistered conduct brokering transactions between these investors and the StraightPath Funds, Seropian obtained more than $1.2 million in transaction-based compensation.
“Today’s resolutions demonstrate our continued efforts to hold accountable unregistered brokers, including those who facilitate the sale of pre-IPO investments to retail investors,” said Sheldon L. Pollock, associate regional director in the New York office. “The division of enforcement continues to scrutinize the registration status of individuals selling pre-IPO shares to retail investors.”
The SEC’s orders find that Guarino and Seropian violated the broker-dealer registration provision of the federal securities laws. Without admitting or denying the findings, Guarino and Seropian agreed to cease and desist from future violations and to industry and penny stock bars. Guarino agreed to pay disgorgement and prejudgment interest of $431,287 and a civil penalty of $100,000. Seropian agreed to pay disgorgement and prejudgment interest of $1,392,367 and a civil penalty of $300,000.
Without admitting or denying the findings, Vecchio agreed to a permanent injunction from future violations of the antifraud and broker-dealer registration provisions of the federal securities laws and to industry and penny stock bars. Vecchio also agreed to pay disgorgement and prejudgment interest of $544,250 and a civil penalty of $90,000.
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