Watermark Financial Services Group, Inc., et al.
On May 16, 2008, the SEC obtained an emergency court order freezing the assets of Watermark Financial Services Group, Inc., Watermark M-One Holdings, Inc., M-One Financial Services, LLC, and/or Watermark Capital Group, LLC (the Watermark Entities), Guy Gane, Jr., and Lorenzo Altadonna, and relief defendants Denkon, Inc. and two of Gane’s children, Guy W. Gane, III and Jenna Gane, in connection with a multi-million dollar offering fraud and Ponzi scheme.
The SEC alleged that entities owned and controlled by Gane − the Watermark Entities − issued fraudulent unregistered notes, and that Lorenzo Altadonna, Deborah Galas and Thomas Brick, registered representatives, sold them. The SEC alleged that the defendants sold approximately $6 million of the notes to approximately 95 investors in the Buffalo, New York area, a number of whom were senior citizens or near retirement age. For more information about the SEC’s action, you can read Litigation Release Nos. 20576 (May 15, 2008) and 20583 (May 19, 2008).
On February 14, 2012, Chief Judge William M. Skretny of the United States District Court for the Western District of New York granted the SEC’s motion for summary judgment against the defendants and relief defendants, and subsequently entered final judgments against all defendants and relief defendants.
On May 1, 2013, Chief Judge Skretny approved a distribution plan and a Fair Fund, which consists of all funds deposited into the Court Registry in connection with the action. The purpose of the distribution plan is to allocate the Fair Fund to injured investors that suffered a loss as a result of the investment with the Watermark Entities. An investor who has received back all of his or her initial investment is not entitled to any distribution under the plan.
On May 12, 2016, the Court entered an order that directed the Fair Fund be disbursed to eligible claimants in accordance with the plan and after payment of expenses for all remaining funds to be transferred to the Commission for remittance to the U.S. Treasury. It was further ordered that any future payments made on the final judgments entered in this action are to be paid to the Commission for remittance to the U.S. Treasury. See the Court's Order.