The U.S. Securities and Exchange Commission filed a civil complaint charging three former dually registered representatives of Arete Wealth Management LLC and Arete Wealth Advisors LLC, along with the adviser, its Chief Compliance Officer and General Counsel UnBo (Bob) Chung, and the broker-dealer, in connection with the allegedly illegal offer and sale of Zona Energy Inc. securities to Arete clients. The SEC also announced a settlement with Michael Sealy for allegedly acting as an unregistered broker-dealer in connection with selling Zona shares. The complaint alleges that, from approximately October 2018 to May 2020, Joey Miller, Jeff Larson, and Randy Larson sold more than USD 8 million of Zona shares to clients and customers even though Arete had not approved the securities for offer and sale, a prohibited “selling away” practice. To conceal the activity, the representatives allegedly communicated using personal phones and email, made false and misleading statements to prospective investors, and received deeply discounted Zona shares from Zona promoter Richard Dale Sterritt, Jr. After Arete management and Chung learned of client investments in Zona, they allegedly directed the representatives to obtain settlement agreements releasing the Arete entities and management from liability, and more than 100 clients signed agreements that allegedly contained false and misleading statements and an impermissibly broad liability disclaimer. The SEC seeks permanent and conduct-based injunctions, officer-and-director bars, penny stock bars, and civil penalties, and also alleges Investment Advisers Act antifraud and compliance-rule violations by Arete Wealth Advisors, aiding and abetting by Chung, and Securities Exchange Act recordkeeping violations by Arete Wealth Management. In the related settlement, Sealy agreed, without admitting or denying the findings, to cease and desist, pay a USD 200,000 civil penalty, and accept a 12-month suspension from participating in an offering of a penny stock.
U.S. Securities & Exchange Commission 2025-01-17
U.S. Securities and Exchange Commission charges Arete Wealth firms and personnel over selling away more than USD 8 million of Zona Energy shares
The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against Arete Wealth Management LLC, Arete Wealth Advisors LLC, and several individuals for allegedly illegal sales of Zona Energy Inc. securities. The SEC alleges violations including "selling away" practices, misleading statements, and improper liability disclaimers, seeking various injunctions and penalties. Michael Sealy settled with the SEC, agreeing to a USD 200,000 penalty and a 12-month suspension for acting as an unregistered broker-dealer.