Texas Securities Fraud Cases by Investment Promoters Lead to Civil and Criminal Charges

Two investment promoters are accused of running an advance fee scheme from what they claimed was a Dallas-based investment advisory firm. According to an Emergency Cease and Desist Order entered by the Texas Securities Commission, the Mark Diaz and Raymond Hill offered to buy investors’ stock under the condition that those selling would have to cover transaction costs. The two men promoted their alleged Texas-based securities fraud through social media, bogus websites, forged documents, and supposed IRS affiliations.

Two websites they set up had names similar to Cain Capital LLC, which is a firm that is actually registered with the SEC. According to the Texas regulator, one of the bogus websites directs visitors to a regulator filing that the real Cain Capital submitted to the SEC, as well as to that firm’s Twitter and Facebook pages.

Both sites and the social media accounts are not connected to Cain Capital in anyway. The two men are accused of sending unsolicited email that included documents with Cain Capital’s name in the letterhead to prospective investors.

The Texas State Securities Board said that Diaz and Hill have told investors that they identified a purchaser for stock held by shareholders. Stock owners, however, have to pay 2% of the buying price as a brokerage fee to Cain Capital. They also are telling stock owners that the Internal Revenue Service has to be paid a fee for the sale and that this payment should go through a third party bank and then to a marketing and consultancy firm in the Philippines.

Throughout the state, our Texas securities fraud lawyers work with investors in trying to recoup their investment losses. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.

Austin Promoter Pleads Guilty to Securities Fraud
In other Texas securities news, a former Austin entrainment promoter is sentenced to 10 years behind bars. David Elliot Rosen pleaded guilty to securities fraud.

Investors were told that their funds would go toward booking certain musicians, including Justin Bieber and the Black Eyed Peas, for concerts. Companies and individuals invested between $7K and $200K.

There were no such concerts. Even though the invested funds were supposed to go back to the investors if the events did not take place, Rosen instead used most of their money for his own expenses. Now, he must pay $1.8M of restitution.

He also was sentenced to 10 years in prison after pleading guilty to theft by deception in a separate investment fraud. Rosen has to pay $809K of restitution.

Texas Oil and Gas Promoter Must Pay $2M Restitution
Last month, an oil and gas promoter was sentenced to 6 years in prison. He now must pay $2M in restitution. Mark Christopher Parman had pleaded guilty to Texas securities fraud involving the sale of oil and gas project investments.

Parman raised about $50K in investor funds. He told them their money would go toward the oil and gas projects. Instead, the funds paid for his own expenses and the expenses of his wife.

The Texas State Securities Board said that Parman committed securities fraud because he did not disclose to investors that he had been subject to legal proceedings and sanctions in the past. The state said that the should have had this information when deciding whether to allow him to invest their money.

For example, in 2003 Parman and Shelman Securities Corp. had to pay $1.7M in restitution to persons who purchased limited partnership offerings in an investment fund. The following year, Parman and Shelman Securities, of which he was board chairman, were ordered to pay an investors over $311K. The claimant accused them of churning to make commissions.

Throughout the US, our Texas securities fraud law firm is here to represent investors. We have helped thousands of investors recoup their investment losses. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.

The Emergency Cease and Desist Order Against Hill and Diaz (PDF)

The Indictment Against Rosen (PDF)

Oil and Gas Promoter Sentenced to 6 Years, Texas.gov, April 10, 2017