Advisors who’ve been around long enough have probably seen it all, until now that is, and you’re not going to believe how one California man tried to reignite his career in the securities industry.
Advisors who’ve been around long enough have probably seen it all, until now that is, and you’re not going to believe how one California man tried to reignite his career in the securities industry.
Five years ago David S. Cacchione was sentenced to 60 months’ imprisonment for securities fraud and ordered to pay $50 million in restitution for his role in a $100 million fraud.
The Woodside, California, resident got out of jail June 9, 2014, but not before registering Montara Capital Management with the California Secretary of State. But that was only the start.
Once out, Cacchione filed an application with the SEC on behalf of Montara Capital Management asking to have the company registered as an investment advisor in the state of California and expected to raise $100 million within 120 days.
Not too bad for a company doing business out of a UPS store mailbox and only days removed from the crowbar motel.
We’re not sure if this is the craziest story WP’s ever reported on but it definitely ranks up there with some of the best of them. Imagine if this man, who’s repaid just $502 dollars of the $50 million restitution order, had actually been given SEC approval. It’s a really scary thought.
Fortunately, the SEC isn’t as porous as we think it is, and tried to put the kibosh on Mr. Cacchione’s second chance to re-enter the securities business as an RIA.
#pb#
“While Cacchione may prefer that his criminal conviction and permanent injunction has no consequence in these proceedings,” says the SEC, "his attempts to sweep under the rug his past conduct and unfavorable evidence only strengthen the need to bar him completely from the securities industry.”
The only problem in this situation?
Cacchione was barred from the brokerage industry in 2009 by the SEC as part of its civil action against the former broker, but because there isn’t an automatic, industry-wide ban, Cacchione was free to seek employment within the RIA channel. The rule is meant to give people a second chance by enabling them to get jobs as clerks and other non-advisory roles.
A repeat offender, the SEC does have the option of banning Cacchione for life from all sectors of the industry by proving it’s in the best interests of the public at large.
In February the SEC barred Cacchione from association with any investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, using the public’s best interests as its trump card.
Cacchione can reapply under one condition. Care to guess what that is?
He must repay the $50 million in restitution. That means he only has $49,999,498 left to go. America can breathe a little easier.
Five years ago David S. Cacchione was sentenced to 60 months’ imprisonment for securities fraud and ordered to pay $50 million in restitution for his role in a $100 million fraud.
The Woodside, California, resident got out of jail June 9, 2014, but not before registering Montara Capital Management with the California Secretary of State. But that was only the start.
Once out, Cacchione filed an application with the SEC on behalf of Montara Capital Management asking to have the company registered as an investment advisor in the state of California and expected to raise $100 million within 120 days.
Not too bad for a company doing business out of a UPS store mailbox and only days removed from the crowbar motel.
We’re not sure if this is the craziest story WP’s ever reported on but it definitely ranks up there with some of the best of them. Imagine if this man, who’s repaid just $502 dollars of the $50 million restitution order, had actually been given SEC approval. It’s a really scary thought.
Fortunately, the SEC isn’t as porous as we think it is, and tried to put the kibosh on Mr. Cacchione’s second chance to re-enter the securities business as an RIA.
#pb#
“While Cacchione may prefer that his criminal conviction and permanent injunction has no consequence in these proceedings,” says the SEC, "his attempts to sweep under the rug his past conduct and unfavorable evidence only strengthen the need to bar him completely from the securities industry.”
The only problem in this situation?
Cacchione was barred from the brokerage industry in 2009 by the SEC as part of its civil action against the former broker, but because there isn’t an automatic, industry-wide ban, Cacchione was free to seek employment within the RIA channel. The rule is meant to give people a second chance by enabling them to get jobs as clerks and other non-advisory roles.
A repeat offender, the SEC does have the option of banning Cacchione for life from all sectors of the industry by proving it’s in the best interests of the public at large.
In February the SEC barred Cacchione from association with any investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, using the public’s best interests as its trump card.
Cacchione can reapply under one condition. Care to guess what that is?
He must repay the $50 million in restitution. That means he only has $49,999,498 left to go. America can breathe a little easier.
