SEC Charges Previously-Barred Broker and His Firm with Offering Fraud
Litigation Release No. 24608 / September 23, 2019
U.S. Securities and Exchange Commission v. Christopher Fulco (a/k/a Christian Anthony, Johnathan Stewart, and Michael Barron), and JM Capital Holdings LLC, as Defendants, and Jamie Milione, as Relief Defendant, No. 19-civ-5318 (E.D.N.Y. filed September 18, 2019)
The Securities and Exchange Commission today announced charges against a broker previously barred by the Financial Industry Regulatory Authority (FINRA), and his wholly-owned firm for a multiyear offering fraud that defrauded at least ten investors of approximately $1.6 million.
According to the SEC's complaint, filed in Brooklyn, Christopher Fulco of Staten Island, New York, through his company, JM Capital Holdings LLC, cold-called investors, including many elderly retirees, and solicited investments in a number of private companies, some of which he claimed were about to substantially increase in value following initial public offerings. In truth, the SEC alleges, defendants never invested the money in the manner represented; instead, Fulco used the money to fund his lifestyle, gamble at casinos, take vacations, and purchase luxury goods. Fulco also allegedly transferred almost $100,000 of investor money to his ex-fiancé, whom the SEC has named as a relief defendant. Throughout the three-year offering fraud, the SEC alleges that Fulco used a series of aliases to conceal his true identity from investors and created fictitious documents to induce investors to transfer money to JM Capital.
The SEC's complaint charges defendants with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The SEC seeks permanent injunctions, disgorgement, prejudgment interest, and civil money penalties against Fulco and JM Capital, and disgorgement and prejudgment interest from the relief defendant.
The SEC's investigation has been conducted by Jessica Neiterman and supervised by Corey Schuster of the SEC's Asset Management Unit. The litigation will be led by James M. Carlson and Ms. Neiterman and supervised by Stephan Schlegelmilch. The SEC appreciates the assistance of the Federal Bureau of Investigation and the U.S. Attorney's Office for the District of Montana.