Another To Good To Be True Offering Fraud
It is an old saying that if it is too good to be true then it probably is. This adage clearly applies too many offering fraud actions. Potential investors listen to a sales pitch soliciting them; the pitch is too good to be true; yet they invest and in fact that sales pitch was to good to be true, it was false. This happens over and over. And, this was precisely the situation in one of the Commission’s recent offering fraud actions, SEC v. Mastroianni, Civil Action No. 22-civ-5080 (D.N.J. Filed August 17, 2022).
Named as defendants in the action are: Anthony Mastroianni, Jr., and Global Business Development and Consulting Corp. Mr. Mastroianni is the sole owner of the Defendant Global. He is a barred broker – FINRA barred him in December 2016.
Over a five year period, beginning in February 2017, Defendants sold Global Notes to investors. The funds raised from selling the notes were to be used to make loans to other businesses. Profits from the sale were supposed to be used to repay investors. The notes had a 50% to 175% interest rate. As a result, 11 investors purchased notes. Defendants received at least $1.2 million.
Unfortunately, investors were not repaid. The reason – the deal was to good to be true; Defendants misappropriated much of the investor money. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b). The case is pending. The U.S. Attorney for the District of New Jersey announced parallel criminal charges against Mr. Mastroianni.