SEC Charges Three StraightPath Sales Agents for Unregistered Broker Activity

The U.S. Securities and Exchange Commission (SEC) has announced settled charges against three sales agents from StraightPath Venture Partners for engaging in unregistered broker activity. Anthony Guarino, Robert Seropian, and Frank Vecchio were charged with selling membership interests in LLCs that claimed to invest in pre-IPO company shares without proper registration.

According to the SEC's orders, the three agents allegedly provided investors with marketing materials, advised on the supposed merits of investments, and received transaction-based compensation. These activities are hallmarks of broker operations, yet none of the individuals were registered as brokers. The SEC reports that collectively, they solicited over $17 million from at least 75 investors, earning approximately $2.1 million in transaction-based compensation.

The case against these individuals goes beyond simple registration violations. Guarino was found to have actively solicited investments for funds managed by Legend Venture Partners, an investment adviser previously charged by the SEC with fraud. Vecchio faced additional allegations of making false or misleading statements to investors regarding fees received by him and the fund manager.

Without admitting or denying the findings, all three individuals have agreed to settle the charges. The terms of the settlements vary for each person:

Anthony Guarino and Robert Seropian have both agreed to cease and desist from future violations and accept industry and penny stock bars. Guarino will pay $431,287 in disgorgement and prejudgment interest, along with a $100,000 civil penalty. Seropian's financial obligations are more substantial, with $1,392,367 in disgorgement and prejudgment interest, plus a $300,000 civil penalty.

Frank Vecchio's settlement includes a permanent injunction from future violations of antifraud and broker-dealer registration provisions, as well as industry and penny stock bars. He has agreed to pay $544,250 in disgorgement and prejudgment interest, plus a $90,000 civil penalty.

Sheldon L. Pollock, Associate Regional Director in the SEC's New York Regional Office, emphasized the commission's commitment to accountability in this area. "Today's resolutions demonstrate our continued efforts to hold accountable unregistered brokers, including those who facilitate the sale of pre-IPO investments to retail investors," Pollock stated. He added that the Division of Enforcement continues to scrutinize the registration status of individuals selling pre-IPO shares to retail investors.

This case underscores the SEC's ongoing efforts to protect investors and maintain the integrity of the securities market, especially in the realm of pre-IPO investments targeting retail investors. It serves as a reminder of the importance of proper registration and transparent practices in the financial industry, particularly when dealing with retail investors who may be less familiar with the complexities and risks of pre-IPO investments.

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