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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23927 / August 31, 2017

Securities and Exchange Commission v. Leon Vaccarelli, et al., No. 3:17-cv-01471 (D. Conn., filed Aug. 31, 2017)

SEC Charges Broker With Defrauding Elderly Customers

The Securities and Exchange Commission has charged Connecticut-based broker representative and investment adviser Leon Vaccarelli and his company with fraudulently persuading several elderly customers to invest with him and then spending their money on his own living and business expenses.

The SEC's complaint alleges that instead of investing the customers' money in such things as conventional brokerage accounts and so-called separately managed accounts as promised, Vaccarelli deposited customer funds into his personal and business bank accounts. He allegedly commingled the funds with his own money and used them for his own purposes, and in some instances he used customer funds to pay returns to earlier investors. According to the SEC's complaint, Vaccarelli asked one customer to sign an agreement that she would not provide certain information to FINRA or the SEC. Vaccarelli allegedly sold more than $450,000 in securities that were held in trust for the care and maintenance of a beneficiary and used some of the proceeds to pay business and personal expenses.

The SEC alleges that Vaccarelli defrauded clients of more than $1 million, and the agency is seeking an asset freeze against Vaccarelli, individually and doing business as Lux Financial Services, and his company, LWLVACC, LLC.

The SEC's complaint alleges that Vaccarelli violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5 and 21F-17(a). The complaint seeks disgorgement of ill-gotten gains plus interest, penalties, and permanent injunctive relief.

The SEC's investigation, which is continuing, is being conducted by Alicia Reed, Deena Bernstein, Patrick Noone, and Amy Gwiazda of the Boston Regional Office. An SEC examination is being conducted by Jason Lake, Mark Gera, and Michael Lally of the Boston office. The SEC appreciates the assistance of the Connecticut Department of Banking's Securities and Business Investments Division.

SEC Complaint

 

https://www.sec.gov/litigation/litreleases/2017/lr23927.htm


Modified: 08/31/2017