SEC Charges Barred Broker and His Company with Defrauding Older Americans
Defendant Promised Hefty Returns While Spending Investors' Money On Luxury Goods
Litigation Release No. 25477 / August 18, 2022
Securities and Exchange Commission v. Anthony J. Mastroianni, Jr. and Global Business Development and Consulting Corp. Civil, ase No. 22-civ.-5080 (D. N.J.) filed August 17, 2022
On August 17, 2022, the Securities and Exchange Commission charged Global Business Development and Consulting Corp. (Global) and its owner, Anthony J. Mastroianni, Jr., in connection with a $1.2 million fraudulent promissory note scheme targeting older Americans.
According to the SEC's complaint, Mastroianni, a New Jersey resident, sold approximately 11 investors promissory notes issued by his company, Global, beginning as early as 2017. The complaint alleges that Mastroianni induced investors, ranging in age from 64 to 82, to purchase the notes by promising exorbitant interest rates ranging from 50% to 175%. In 2016, Mastroianni was barred by the Financial Industry Regulatory Authority (FINRA) from associating with any registered broker-dealer after refusing to appear for testimony to answer allegations of, among other things, excessive trading in an elderly customer's account.
The SEC's complaint further alleges that Mastroianni gave investors conflicting explanations of the nature of Global's business, and often convinced them to roll-over their notes into new notes combining unpaid amounts with new investments by the investors. In reality, Global did not use investor monies to generate income and the SEC investigation determined that Mastroianni withdrew over $486,000 of investors' money from Global's bank account and also used ill-gotten funds for personal expenses on luxury items.
The SEC's complaint, filed in federal district court in New Jersey, charges Mastroianni and Global with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and seeks disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and permanent injunctive relief.
In a parallel action, the U.S. Attorney's Office for the District of New Jersey today announced criminal charges against Mastroianni.
The SEC's Office of Investor Education and Advocacy has information and investor alerts to help seniors protect themselves against investment fraud. Additional resources and more can be found at investor.gov.
The SEC's investigation, which is ongoing, is being conducted by Peter A. Pizzani, Debbie Chan and Adam S. Grace, and the litigation will be led by Christopher Dunnigan and Mr. Pizzani of the New York Regional Office. The case is being supervised by Sheldon Pollock. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of New Jersey.