Articles Posted in Disciplinary Actions

On October 30, 2015 in the Southern District of Ohio The Securities and Exchange Commission filed an enforcement action against William Apostelos and his companies WMA Enterprises, LLC, Midwest Green Resources, and OVO Wealth Management. The complaint alleged that Willlaim Apostelos and his companies conducted a fraudulent investment scheme.

The SEC’s complaint alleges that William Apostelos, WMA, Midwest Green, and OVO raised over $66 million from over 300 investors since January, 2010 and that throughout the alleged scheme, William Apostelos made multiple misrepresentations to recruit new investors.  The SEC alleges that Apostelos told investors that their funds would be invested in stock, precious metals, real estate, and used to make short-term loans to small businesses and farmers.

The SEC alleges that, in fact, William Apostelos funneled nearly all the investor funds to WMA’s bank accounts and used them to make ponzi scheme like payments to earlier investors and promoters of the scheme; to finance other businesses that he owned; and to support his lavish lifestyle, including the payment of gambling expenditures.

On March 5, 2015 a federal judge ordered Deepal Wannakuwatte to pay over $100 million in restitution to the victims of his decade long ponzi scheme. In November of last year Deepal Wannakuwatte was sentenced to 20 years in prison and ordered to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims.

According to court documents, from 2002 to 2014, Wannakuwatte obtained well over $230 million from his victims, some of which he returned to them as “fake” profit payments. Most of the money raised was used by Deepal Wannakuwatte to pay himself and his family and pay outstanding debts unrelated to his false representations.

Wannakuwatte offered his investors several different bogus high-yield investment opportunities, and closed the sales by touting his relationship to the VA, and by showing his victims phony corporate documents, fraudulent tax returns, and bogus sales documents.

In August 2014, Feltl and Company signed a letter of Acceptance, Waiver, and Consent (“AWC”) in which FINRA alleged multiple failures by the firm between 2008 and 2012 concerning Feltl’s penny-stock business, including deficiencies in the firm’s supervisory procedures.

FINRA alleged that Feltl failed to comply with suitability, disclosure, and record-keeping requirements, by for example, not providing certain of its customers with standardized risk disclosure documents two days prior to effecting penny stock transactions in customers’ accounts.

This industry approved risk disclosure document describes the nature and level of risk in the penny stock market and a broker-dealer’s duties to its customers.