Switch to ADA Accessible Theme
Miami Investment Fraud Attorney
305.372.9700
2655 South Le Jeune Road
Suite 1108
Coral Gables, FL 33134

SEC Files Bond Fraud Charges Against South Florida Company

On August 14th, 2018, the Securities and Exchange Commission (SEC) announced investment fraud charges against two companies and eighteen different individuals. One of the investment firms, Core Management Performance, LLC (CPM), is based in Boca Raton, Florida, and was operated by four South Florida individuals:

  • James Scherr of Boca Raton, FL;
  • Deborah Dora of Lighthouse Point, FL;
  • Sharelene F. Mesite of St. Lucie, FL; and
  • James O’Neil of Jupiter, FL.

All four individuals have held securities licenses at some point in the recent past. According to the SEC, this was a longstanding fraud scheme that improperly diverted bonds to broker-dealers at the expense of ordinary investors. Here, our Miami investment fraud attorneys review the specific allegations raised in the SEC’s complaint.

SEC Complaint: Bond Fraud 

The Investment Fraud Scheme  

The SEC filed its complaint against Core Performance Management et. al. in the United States District Court for the Southern District of Florida. The agency alleges that the perpetrators used CPM to improperly place retail orders on behalf of broker-dealers, thereby preventing actual retail investors from receiving the proper priority on these municipal bond offerings.

The Mechanics  

Federal regulators allege that CPM created the false impression that they were purchasing bond offerings on behalf of ordinary investors. By doing so, they were able to receive priority on certain orders. They concealed the true identity of their business operation by:

  • Providing fraudulent zip codes to qualify for certain restricted municipal bond offerings;
  • Creating a scheme of false accounts and false entities to maximize the number of orders they could place; and
  • Employing deceptive means to conceal the fact that they were purchasing bonds solely for the purpose of flipping them.

Altogether, more than 25 different fake business names were used to get access to these offerings. The SEC contends that the perpetrators used names such as Dockside Asset Management and Chapel Bay Asset Management to give false impressions that retail investors were getting access to these priority bond offerings.

Ordinary Investors Were Damaged

In most cases, municipal issuers mandate that underwriters provide retail investors with the highest priority. This is particularly true of investors who actually reside within the jurisdiction of the municipal bond issuer. By taking advantage of priority that should not have been available, CPM took in millions in illicit profits and forced investors to pay unfair prices.

In this case, NW Capital Markets Inc. (CRD#: 17622) and its former representative Charles Kerry Morris (CRD#: 1047626) allegedly received illegal kickbacks to help CPM get around these regulations. NW Capital and Mr. Morris have been fined more than $340,000 for their role. Mr. Morris was also suspended to the securities industry for six months.

Get Help From Our Miami Investment Fraud Lawyers

At Carlson & Associates, P.A., we advocate for investors. If you or your family member sustained serious investment losses, our FINRA arbitration lawyers are ready to help. For a no fee, no risk review of your claim, please contact us at our Miami law office today.

Resources:

sec.gov/news/press-release/2018-153

brokercheck.finra.org/firm/summary/17622

brokercheck.finra.org/individual/summary/1047626

sec.gov/litigation/complaints/2018/comp-pr2018-153.pdf

  • Super Lawyers
  • AV Preeminent
  • Million Dollar Advocates Forum
  • Judicial Edition 2021
  • Curtis Carlson 25th Anniversary
  • Curtis Carlson Judicial Edition 2022
  • Curtis Carlson Judicial Edition 2023
  • 2023 Judicial Edition Curtis Carlson
  • 2023 Martindale Hubbell Award Curtis Carlson
  • 2023 Lawyers.com Curtis Carlson
  • 2024 Martindale Hubbell Award Curtis Carlson
  • 2024 Martindale Hubbell Award Curtis Carlson
  • 2024 Martindale Hubbell Award Curtis Carlson
Location

Office
Location

2655 South Le Jeune Road
Suite 1108

Coral Gables, Florida 33134

Telephone: 305-372-9700
Fax: 305-372-8265

Connect
With Us

  • Facebook
  • Twitter
  • LinkedIn

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

No content on this site may be reused in any fashion without written permission from www.Carlson-Law.net

MileMark Media - Practice Growth Solutions

© 2015 - 2024 Carlson & Associates, P.A. All rights reserved. This law firm website is managed by MileMark Media.