SEC Files Complaint Against Alleged Unregistered Brokers in South Florida
On September 18th, 2023, the Securities and Exchange Commission (SEC) filed a complaint in the United States District Court for the Southern District of Florida (Rondini, et al). The SEC names Wilson Rondini III and two investment entities that he controlled—Falcon Capital LLP and Falcon Capital Partners Limited—as defendants in the case. The federal agency contends that Mr. Rondini III acted as an unregistered securities broker. In this article, our Florida securities fraud attorney provides a comprehensive overview of the complaint filed by the SEC.
Background: Tens of Millions Raised in Unregistered Securities
Wilson Rondini III is a resident of Palm Beach, Florida. He operated two companies: 1) Falcon Capital LLP, registered in the United Kingdom, and 2) Falcon Capital Partners Limited, registered in Hong Kong. The SEC contends that Mr. Rondini III operated both Falcon Capital entities as unregistered securities broker-dealers from 2018 to 2022. During that time, Mr. Rondini III allegedly raised tens of millions of dollars and sold millions of dollars in securities.
The SEC alleges that Falcon Capital LLP, and Falcon Capital Partners Limited were the underwriters on tens of millions dollars worth of securities transactions. Mr. Rondini III purportedly was the individual signatory on these transactions. For its role in underwriting transactions, Falcon Capital—which allegedly acted as an unregistered broker-dealer—was receiving a significant payment, amounting to ten percent of the gross proceeds that issuers received from investors.
What is an Unregistered Broker-Dealer?
There are strict registration requirements for broker-dealers. Broadly speaking, an unregistered broker-dealer is a party—individual or institutional—that acts as a broker-dealer without satisfying these requirements. Unregistered broker-dealers can put investors at a serious risk. The lack of oversight can make broker negligence and outright investment fraud more likely to occur. There are major consequences for individuals and entities that operate as an unregistered broker-dealer. Notably, for the most part, the companies that used Falcon Capital as an underwriter were penny stocks. A penny stock is a low-priced, small-cap stock typically trading for less than $5 per share. They are often available over-the-counter markets and subject to less stringent regulations. Penny stocks can be especially risky for investors.
The SEC is Seeking a Full Range of Sanctions Against the Unregistered Broker-Dealer
The SEC is seeking the full range of penalties against Wilson Rondini III, Falcon Capital LLP, and Falcon Capital Partners Limited. More specifically, the federal agency is requesting a restraining order against the defendants, the return of improperly obtained profits (disgorgement), payment of interest on the returned profits before judgment, other financial sanctions, and a penny stock bar against Mr. Rondini III.
Contact Our Miami, FL Unregistered Securities Broker Today
At Carlson & Associates, P.A., our Miami unregistered securities attorney is an experienced advocate for investors. If you suffered losses in unregistered securities, you may be entitled to compensation for your damages. The right lawyer can make the difference. Contact us now for your confidential appointment. We handle unregistered securities cases in South Florida and throughout the area.