Total Wealth Management and its founder, Jacob Cooper, are in trouble again with the Securities and Exchange Commission (SEC) after using client funds to settle a prior case with the SEC. To help settle the original charges, the firm and Cooper allegedly misappropriated $150,000 of client funds through "administrative" fees that ranged from $3,500 to $7,500. The SEC had originally filed charges against Total Wealth Management for failing to disclose to their clients that they were receiving kickbacks from Altus Funds. The SEC is now working to freeze Total Wealth's assets and to appoint a trustee.
Raymond Schmidt, formerly with LPL, was barred by the Financial Industry Regulatory Authority (FINRA) after he borrowed about $2.25 million from his clients. Schmidt failed to disclose to LPL that he was borrowing from customers over a three year period to build a luxury rental home in Hawaii. Schmidt was also obligated to notify FINRA about the rental home because it is considered an outside business activity, but failed to do so. FINRA made no accusations that Schmidt had failed to repay the borrowed monies. However, Schmidt has one customer complaint pending for $375,000 relating to the real estate in Hawaii.
The Securities and Exchange Commission (SEC) has filed charges against Lynn Tilton and her companies, Patriarch Partners, after allegedly defrauding investors. The SEC believes Tilton and Patriarch Partners failed to disclose the poor performance of loan assets held by the firm's Zohar funds, allowing her to continue to collect fees from investors totaling nearly $200 million. The Zohar funds had raised over $2.5 billion from notes sold to investors. Tilton has denied all charges.
The Financial Industry Regulatory Authority (FINRA) has ordered Brookville Capital Partners to pay a total of $1.5 million and barred its president, Anthony Lodati, as a result of alleged fraudulent conduct. FINRA believes that Brookville, under the supervision of Lodati, deceptively offered and sold 29 clients over a million dollars worth of shares in a private placement called Wilshire Capital Partners Group LLC. FINRA claimed that Lodati was aware that Wilshire was operated by individuals with felony convictions and intentionally withheld that information from Brookville costumers.