The law firm of Oakes & Fosher is presently investigating the alleged misconduct of former securities broker James Tao. According to his publicly available FINRA BrokerCheck report, James Tao has been the subject of an SEC sanction.

James Tao operated most recently as a Texas based securities broker. He worked in the securities industry for eight years. During his career, he was registered with four different securities firms.

His Registrations

  • Electronic Trading Group (1999-2001)
  • Assent, LLC (2004-2006)
  • Merrill Lynch (2011-2012)
  • Sunbelt Securities (2012-2016)

The Allegations

According to a report filed by the United States Securities and Exchange Commission in December 2017, James Tao, while associated with Sunbelt Securities, formed a private equity fund called PVC, LLC. This fund was allegedly designed to invest in tech start up companies across Houston. However, without Sunbelt Securities’ knowledge or approval, James Tao raised approximately $860,000 by selling membership units of PVC. James Tao allegedly made material misrepresentations and omissions regarding the investments. He allegedly claimed that they would be held in escrow and returned if PVC did not raise at least $2.5 million. According to the findings, he also failed to disclose that PVC was investing in companies that he either owned or had a personal stake in. James Tao allegedly operated PVC as a Ponzi scheme, as he used new investor funds to pay back earlier investors. He also misappropriated a great deal of the money for his own personal use. Due to these alleged actions, he was barred from acting as a securities broker in any fashion, and forced to pay $155,970 in disgorgement.

Ponzi-Schemes

A Ponzi scheme is a fraudulent investment vehicle perpetrated by a securities broker, like James Tao, or group of brokers. The perpetrating party solicits funds from investors under the guise of a legitimate investment. Instead of investing the funds as they had said they would, the perpetrating party diverts the funds for other purposes. They then provide the investors with falsified information to give them the appearance that actual growth is taking place. However, since no growth is actually taking place, the perpetrating party can only repay investor dividends through funds coming in from new investors. This process continues until the entire thing collapses.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud/and or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with James Tao, please contact Oakes & Fosher for a free and private consultation.