Massachusetts Secretary of the Commonwealth, William Francis Galvin, filed
complaints against three investment advisers in three separate investment
fraud cases. The cases involved
breach of fiduciary duty, the unregistered sale of securities, false statements, and
misrepresentations and omissions.
Daniel A. McKenna was charged, along with his investment adviser firm (Principle
Profits Asset Management), with selling more than $1 million dollars in
"worthless Principle Profits stock" to – and entering
into borrowing agreements with – various clients over the course
of 17 years. The State claimed McKenna’s actions constituted a gross
conflict of interest and violated his fiduciary duty to the clients. The Complaint asks that
"fair compensation" be paid to defrauded investors.
John B. Wilson was charged with selling unregistered securities in JBW
Capital, LLC to approximately 25 investors. According to the Complaint,
Wilson was not a registered investment adviser. The State accused Wilson
of misrepresenting and omitting material facts about JBW Capital, LLC
(a pooled investment vehicle, which purportedly used automatic trading
software to trade on the Chicago Mercantile Exchange) in order to "hide
investment losses and to induce further investments." The Complaint
asks for disgorgement of profits, restitution, and that Wilson be banned
from the industry for life.
Sean Michael O’Brien and his firm, Andover Equity Investment Group
LLC, were charged with fraudulently offering, selling, and purchasing
securities. In particular, Andover Equity was accused of charging "exorbitant
fees" to clients and of using certain client funds to pay O’Brien’s
personal expenses. Andover Equity and O’Brien also were accused
of interfering with a Securities Division investigation by making false
statements and refusing to provide requested information. The Complaint
asks for disgorgement of profits, restitution to investors, and the revocation
of both Andover Equity’s and O’Brien’s licenses as registered
"These cases are indicative of the swift and decisive action my securities
division will take when we uncover investment advisers who have violated
the securities laws,"
Secretary Galvin toldInvestmentNews.