The law offices of Gana Weinstein LLP are currently investigating claims that advisor Stephen DeCesare (DeCesare) sold investments in Legal Coverage Group, Ltd. (Legal Coverage) offered by Gary Frank (Frank) that was not approved by his brokerage firm. DeCesare, formerly registered with Triad Advisors LLC (Triad Advisors) out of Marlton, New Jersey no longer works for the firm according to records kept by The Financial Industry Regulatory Authority (FINRA). In addition, DeCesare disclosed at least two customer complaints.
In March 2019 DeCesare was alleged to have solicited a client to make a $250,000 investment in Legal Coverage.
In March 2019 the Department of Justice (DOJ) indicted Frank with wire fraud, bankruptcy fraud, and money laundering stemming from a massive fraudulent loan scheme. According to the indictment Frank executed a complex and sophisticated scheme to defraud numerous victims. Frank purported to own and operate a Bala Cynwyd business named Legal Coverage which contracted with employers desiring to offer a legal plan to their employees as part of their employee benefits plans. However, Frank is alleged to have tricked his victims into believing that Legal Coverage was a rapidly growing leader in the legal plan industry, generating hundreds of millions of dollars of annual revenue and employing hundreds of individuals. In reality, Legal Coverage experienced virtually no growth from approximately 2006 through 2017 and generated only several thousand dollars of annual revenue. Frank allegedly obtained over $30 million in loans which he used to live an extravagant lifestyle.
Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling fraudulent securities sales. DeCesare’s activities in the sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.
When advisors convert or misappropriate funds they often create businesses or other vehicles to serve as a cover for the theft of funds. However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
DeCesare entered the securities industry in 2000. From June 2007 until January 2019 DeCesare was registered with Triad Advisors out of the firm’s Marlton, New Jersey office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.