SEC Charges Connecticut RIA with $3.95M Fraud, Ex-Morgan Stanley Financial Adviser with $5M Securities Scam

The Securities and Exchange Commission has filed fraud charges against Sentinel Growth Fund Management and its owner Mark J. Varacchi. The regulator is accusing the Connecticut-based investment advisory firm of stealing at least $3.95M from investors. Over $1M was allegedly used to resolve private litigation in which Varacchi was the defendant.

According to the Commission, Sentinel Growth Management Fund and Varacchi misrepresented to investors that their money would go to hedge fund managers to be invested. Instead, the investment advisor firm allegedly commingled investor money and manipulated account balances, activities, and investment returns as part of a securities fraud.

Now, the SEC wants disgorgement and penalties brought against Varacchi and his firm in this investment advisor fraud case.

In other investment adviser fraud news, the regulator has charged Barry Connell with stealing about $5M from clients through unauthorized wire transfers and checks issued to third parties to cover his own expenses.

Connell, an ex-Morgan Stanley (MS) financial adviser, allegedly executed over 100 unauthorized transactions and misrepresented that clients had given him their permission verbally. He allegedly used investors’ funds to pay for his lavish lifestyle, including a Las Vegas rental, private jet service, a country club membership.

The New Jersey investment adviser also faces criminal fraud and identify theft charges. According to the authorities, Connell bilked three of Morgan Stanley’s rich clients. The FBI, in its complaint, notes that the financial representative managed the accounts of one family that had tens of millions of dollars in assets. While making at least 48 withdrawals, Connell allegedly stole some of their funds.

Investment Adviser Fraud
Over the years, our securities law firm has worked with investors in trying to recoup their losses from investment adviser fraud. We have helped thousands of investors, including retail investors, wealthy investors, and institutional clients.

In October, Marc Wyatt, the SEC’s Office of Compliance Inspections and Examinations director, gave a speech in which he noted that the regulator has increased staffing in its investment adviser/investment company examination program. The Commission is the only regulator presiding over registered investment advisers.

Contact our investment advisor fraud law firm today to request your free case consultation.

Read the SEC Complaint in the Connell Case (PDF)

The SEC Complaint in the Varacchi/Sentinel Growth Fund Management Case (PDF)

SEC Director Marc Wyatt’s Keynote at the National Society of Compliance Professionals in DC last year