The investment lawyers of Gana Weinstein LLP are investigating allegations by investors that Tripoint Global Equities, LLC (Tripoint Global) and its agents Robert Nathan, Mark Elenowitz, and Michael Boswell acted as placement agents to solicit investments tied to a massive $97 million Ponzi scheme involving the false sale of tickets for shows such as the Broadway hit Hamilton.
Tripoint Global allegedly formed a joint venture with certain entities under the control of Joseph Meli and Matthew Harriton such as 875 Holdings, LLC, 127 Holdings, LLC, Advance Entertainment, LLC, and Advance Entertainment II, LLC to sell interests in these entities.
As reported, The Securities and Exchange Commission (SEC) and the also the Department of Justice have alleged in civil and criminal charges that Joseph Meli ran a fraudulent ticket business. Meli also used other to raise funds for the ventures such as Steven Simmons who was the head of an alternative investments at Sideris Capital Partners – were also arrested on securities fraud and wire fraud charges related to the scheme.
The scheme was unraveled and Meli’s arrest came after prosecutors said that Mark Varacchi, founder of Sentinel Growth Fund Management LLC, plead guilty in Manhattan federal court to charges of securities fraud and agreed to cooperate with authorities concerning their investigation into the other participants. Varachhi also admitted to having schemed to defraud his prior employer, also a hedge fund, through embezzling money from vendors.
According to newsources and law enforcement agencies, of $81 million the raised from 125 investors just $48 million was used to repay earlier investors. The rest of the funds allegedly were used for jewelry, private school tuition, gambling, and other expenses.
Brokerage firms like Tripoint Global are required to conduct due diligence on the securities they offer to the public. A brokerage firm’s claim of ignorance of is not a proper defense to fraud in the absence of reasonable due diligence. Brokerage firms are obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and respond to red flags of potential misconduct. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor and their interaction with the public. Ponzi schemes often occur 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.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of Ponzi schemes and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.