Advisors Trae Wieniewitz and Brian Korienek Allegedly Sold Fraudulent 1st Global Capital Securities

shutterstock_172399811-297x300The attorneys at Gana Weinstein LLP are looking into potential actions to help investors ensnared in the 1st Global Capital LLC (1st Global Capital) investment fraud scheme.  According documents filed by The Securities and Exchange Commission’s (SEC) it appears that some of the victims were brought to 1st Global by brokers who formerly worked for Taylor Capital Management (Taylor Capital).  These advisors include Trae Wieniewitz (Wieniewitz) – also a affiliated with Wieniewitz Wealth Management, LLC – and Brian Korienek (Korienek), also affiliated with Goldstone Financial Group, LLC.  It appears that these two brokers used their disclosed relationships with RIA firms to sell fraudulent 1st Global Capital investments to their clients.

As revealed in court documents and the complaint filed by SEC – 1st Global Capital engaged in a four year unregistered securities offering overseen by Carl Ruderman (Ruderman) – also charged.  The SEC has alleged that more than 3,400 investors nationwide have been caught in the company’s $287 million fraud.

As in many frauds, the SEC alleged that 1st Global Capital used substantial investor funds for purposes other than the cash advances including misappropriated at least $35 million of investor money from which at least $28 million went directly to Ruderman and other entities he owned or controlled.  Other alleged illegitimate uses include paying operating expenses and purchasing already-distressed, long-term credit card debt.  As a result, by October 2017 1st Global Capital experienced a shortage of investor funds of $23 million which increased to about $50 million by June 30, 2018.

After the writing was on the wall Ruderman resigned from 1st Global Capital in July after the company declared bankruptcy.

Our firm is currently investigating Taylor Capital and their registered brokers who recommended 1st Global Capital to their clients.  Under the securities laws financial advisors must conduct due diligence and have a reasonable basis for their investment recommendations.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  When dealing with alternative investments and private equity deals due diligence can be more challenging but firms are responsible to meet those heightened challenges prior to recommending the investment to its clients.

Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.  The attorneys at Gana LLP are experienced in representing investors in cases of financial advisors failing to conduct proper due diligence on investments.  Our consultations are free of charge and the firm is only compensated if you recover.