Promoter Settles SEC Charge of Selling Unregistered Securities with Radio Ads and Free Dinner Seminars
July 14, 2020
File No. 3-19878
July 14, 2020 - The Securities and Exchange Commission today filed settled charges against Philadelphia-based Abetterfinancialplan.com, LLC (d/b/a A Better Financial Plan, LLC) (ABFP) and its owner, Dean J. Vagnozzi, for selling more than $32 million in securities to retail investors in unregistered offerings and for together acting as an unregistered broker in connection with a separate offering.
According to the SEC's order, from April 2013 through August 2017, ABFP and Vagnozzi offered and sold interests in five investment funds to over 300 retail investors, about half of whom were non-accredited. Vagnozzi promoted the funds, which each acquired, managed, and sold a portfolio of ownership interests of life insurance policies purchased from the secondary market, through radio ads, direct mailers with an invitation to a free steakhouse dinner, and a website.
The order also finds that, in 2018, ABFP and Vagnozzi acted as an unregistered broker for a securities offering by Fallcatcher, Inc., a purported biometric device and software start-up, that raised at least $4.9 million, much of which came from retail investors' retirement accounts. According to the order, ABFP and Vagnozzi received a fee of $500,000 plus four million shares of Fallcatcher stock. The SEC previously charged Fallcatcher and its founder, Henry Ford, with securities fraud and obtained a final judgment in February 2020.
The SEC's order finds that ABFP and Vagnozzi violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act of 1934. Without admitting or denying the SEC's findings, ABFP and Vagnozzi consented to a cease-and-desist order. For the unregistered offer and sale of securities, Vagnozzi agreed to pay a civil penalty of $8,671 and ABFP agreed to pay a civil penalty of $86,718. For acting as an unregistered broker, Vagnozzi and ABFP agreed to pay, jointly and severally, $495,244 in disgorgement and prejudgment interest, Vagnozzi agreed to pay a civil penalty of $9,472, and ABFP agreed to pay a civil penalty of $94,713, totaling $599,429.33, all of which will be transferred into a Fair Fund for distribution to impacted investors in the Fallcatcher action. ABFP also agreed to a censure and Vagnozzi agreed to a one-year associational bar and to voluntarily return the Fallcatcher shares.
The SEC's investigation was conducted by Megan R. Genet and Steven G. Rawlings of the New York Regional Office and Charu A. Chandrasekhar of the Enforcement Division's Retail Strategy Task Force, and supervised by Associate Regional Director Lara S. Mehraban. The Commission's Office of Investor Education and Advocacy and the Retail Strategy Task Force encourage investors to learn more about broadly advertised investment opportunities in this Investor Alert. The staff appreciates the assistance of the Financial Industry Regulatory Authority.