SEC Charges Arete Wealth and Associates in Illegal Securities Offering

On January 17th of this year, the U.S. Securities and Exchange Commission (SEC) filed a complaint against the broker-dealer firm Arete Wealth Management LLC and associates tied to the firm. They filed this complaint in Illinois federal court, alleging that affiliate advisors in the firm offered illegal securities as part of a “selling away” scheme. The complaint also alleges that Arete Wealth Management engaged in illegal actions in an attempt to avoid liability.

The SEC is seeking to take swift and severe action against Arete Wealth Management. You may be able to recover compensation if you were victimized by this firm or its associates.

The Allegations Against Arete Wealth Management

The Zona Energy “Selling Away” Scheme

The SEC alleges that Joey Miller, Jeff Larson, and Randy Larson offered clients illegal securities for Zona Energy Inc. Arete Wealth Management didn’t approve these securities. Still, these advisors sold more than $8 million worth of Zona shares to Arete clients from 2018 to 2020. They sold these securities under the guise that they were approved by the firm, but in reality, these were fraudulent transactions and sham securities.

Illegal Compensation for Arete Wealth Management Advisors

Allegedly, experienced fraudster Richard Sterritt offered Arete Wealth Management’s errant advisors discounted Zona shares in exchange for soliciting investors. The advisors didn’t receive compensation through Arete because the firm didn’t approve Zona securities. The advisors maintained the facade that Arete approved Zona while also communicating through private channels. The advisors instructed their clients and Zona reps to avoid communicating through Arete’s official channels. They used private email addresses and phone numbers, ultimately conducting business dealings outside Arete’s influence.

Sham Zona Energy Securities

Richard Sterritt concocted the Zona Energy scheme, including the Arete advisors’ involvement in the sham dealings. Sterritt had a criminal history of handling fraudulent securities, and he used the fake name “Richard Richman” to conceal his identity during the Zona equity financing process. Sterritt and others raised a total of around $17 million in fraudulent Zona stock. He then misused the money for private interests, such as purchasing luxury items and giving money to loved ones. Eventually, Sterritt’s identity and illegal dealings were discovered, and he pleaded guilty to defrauding investors in 2023.

Arete Wealth Management Cover-Up

After Sterritt’s downfall, Arete Wealth Management allegedly worked to conceal its advisors’ involvement in the scheme and mitigate liability. Reportedly led by Arete Wealth Management CCO, Bob Chung, Arete instructed defrauded investors to sign agreements in exchange for compensation. The misleading language of these agreements contained disclaimers that may have been illegal. The disclaimers stated that Arete Wealth Management and its advisors were not liable for the fraudulent securities and misleading clients.

Consequences for Arete Wealth Management

The SEC is now seeking serious penalties against Arete Wealth Management. Their complaint in Illinois federal court alleges that Arete representatives engaged in registration violations as well as aiding and abetting.

The allegations also claim that Arete Wealth Management broke antifraud provisions outlined in the Investment Advisers Act as well as recordkeeping provisions from the Securities Exchange Act. The SEC aims to inflict civil penalties against those who perpetrated these crimes as well as permanent injunctions, conduct-based injunctions, penny stock bars, and officer and director bars.

What You Can Do If You Invested In Zona Energy Through Arete Wealth Management?

If you were the victim of the Zona Energy “Selling Away” scheme or were misled by Arete Wealth Management’s unethical compensation agreements, you may be entitled to damages.

You must preserve all documentation related to your interactions with Arete Wealth Management and its advisors. Further, you should consult with a securities fraud attorney immediately.

Get the Money You Deserve: Contact Oakes & Fosher Today

The dedicated securities fraud attorneys at Oakes & Fosher have years of experience helping victims of illegal and unethical brokers. We have over 20 years of experience assisting individuals, and we can help you in your case against Arete Wealth Management. Contact our private placement lawyers today for a free consultation .

Oakes & Fosher has a strong track record of successfully representing investors who have been harmed by similar misconduct to that alleged in the Arete Wealth/Zona Energy case.

Our firm has secured significant awards and settlements in cases involving unsuitable investments, selling away, and broker negligence, demonstrating our expertise in handling complex securities fraud claims.

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