SEC Charges Former Raymond James Branch Manager for Facilitating a Massive EB-5 Fraud
Litigation Release No. 24259 / September 6, 2018
Securities and Exchange Commission v. Joel N. Burstein, Civil Action No. 18-cv-23636 (S.D. Fla. 2018).
On September 6, 2018, the Securities and Exchange Commission filed charges against Joel N. Burstein, a former registered representative and branch manager with Raymond James & Associates, Inc. for helping facilitate an EB-5 offering fraud perpetrated by Jay Peak, Inc., a Vermont-based ski resort, its former principal, Ariel Quiros, and other related entities.
The SEC's complaint, filed in federal district court in Miami, Florida alleges Burstein aided and abetted Quiros' misappropriation and misuse of investor money that flowed through various brokerage accounts held at Raymond James. Burstein, who is Quiros' former son-in-law, managed those accounts. According to the SEC's complaint, Burstein facilitated Quiros' misappropriation of more than $21 million of investor funds to acquire the Jay Peak ski resort. Burstein then assisted Quiros in trying to mask the significant shortfall created in the Raymond James brokerage accounts from the misappropriation. The complaint also alleges that Burstein facilitated Quiros' fraudulent use of more than $18 million of investor money to pay off Jay Peak's margin debt at Raymond James.
On April 12, 2016, the SEC filed an emergency civil action against Ariel Quiros, Jay Peak, and others, for engaging in an offering fraud in which, among other things, Quiros systematically misappropriated and misused investor funds. Securities and Exchange Commission v. Ariel Quiros, et al., Case No. 16-cv-21301-Gayles (S.D. Fla. 2016).
Without admitting or denying the SEC's allegations, Burstein has consented to the entry of a final judgment permanently enjoining him from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 and ordering him to pay a civil penalty of $80,000. Burstein also settled, without admitting or denying the findings, to an SEC order that bars him from association with any broker, dealer, investment adviser, municipal securities dealer, transfer agent, or nationally recognized statistical rating organization, and from participating in an offering of penny stock, with the right to apply for reentry after 10 years.
The SEC's investigation was conducted by Trisha Sindler and Brian Theophilus James in the Miami Regional Office, and supervised by Chedly C. Dumornay.