New York based Arjent, LLC Executive Robert DePalo Indicted by Manhattan District Attorney

Foreign investors continue to be targets of investment fraud.  Bloomberg Business has reported that broker-dealer Arjent LLC Chief Executive Officer Robert DePalo has been indicted by a New York Grand Jury on charges related to misappropriation of $6.5 million from U.K. investors for personal expenses, including his mortgage and luxury cars.  In addition to the action brought by the New York Manhattan District Attorney, the Securities and Exchange Commission has announced that it also brought its own parallel action in Manhattan federal court.

According to the article, Mr. DePalo is alleged to have misappropriated millions from foreign investors in a holding company called Pangaea Trading Partners LLC.  Mr. DePalo is alleged to have engaged in high-pressure sales tactics and stating falsehoods about the company’s assets and how it would invest the money received.  The Bloomberg article reported that according to the SEC, the Mr. DePalo transferred the money directly into bank accounts controlled by himself and his partner Joshua Gladtke.  The SEC is reported to also have alleged that Mr. DePalo sought to cover up the fraud from regulators.

Lately, the attorneys at Malecki Law have noticed an uptick in schemes, including high-pressure sales tactics, targeting foreign investors.  These tactics may include little-known securities investments, repeated calls and emails to the targeted investors and misrepresentations made concerning the viability of the company that issued the underlying securities.

According to Bloomberg, Mr. Depalo attempted to retaliate against the SEC by suing them in New York federal court in 2013 claiming injustice against small broker-dealers.  The court dismissed that case, stating the SEC was immune from such lawsuits.  Bloomberg reported that at the time of the scheme is accused of perpetrating, Mr. DePalo was near insolvency in his business.

Bankruptcies, both person or business-related, can serve as a major catalyst for unscrupulous activities by brokers and financial advisors.  When these financial professionals are pushed to the brink financially in their personal lives, they may be enticed to offer unsuitable investments, or even enter into wholly fraudulent schemes that serve only to line their own pockets at the expense of their customers.  Unfortunately, lax supervision and self-reporting at firms often does not uncover or report to regulators these bankruptcies.

Malecki Law has previously investigated and successfully handled securities arbitrations concerning investment advisors and brokers who were under financial hardships as a result of bankruptcies, then choosing to unsuitable or fraudulent investments.  If you believe you have suffered losses as a result of questionable actions taken in your securities account, please contact us immediately for a confidential consultation.