Source: Securities and Exchange Commission
Litigation Release No. 24768 / March 13, 2020
Securities and Exchange Commission v. Bradley C. Reifler, et. al., Civil Action No. 2:20-cv-00511 (D. Nev., filed March 12, 2020)
The Securities and Exchange Commission yesterday charged Bradley C. Reifler, founder and chief executive officer of multiple New York-based financial services firms, with an extensive fraud that enabled him to divert millions of dollars from investors into entities and ventures that he owned and controlled.
According to the SEC’s complaint, filed in the U.S. District Court for the District of Nevada, Reifler’s fraudulent conduct began in November 2014, when he raised $6 million from an investor by representing that the money would be used to invest in a telecom receivables business. Instead, the SEC’s complaint alleges, Reifler diverted the $6 million to support real-estate development projects in which he had an interest and to acquire a $34 million portfolio of reinsurance trust assets in North Carolina. Beginning in April 2015, Reifler, as the investment adviser to the trust, allegedly defrauded the trust by investing its funds in various struggling entities in which he had an interest. The SEC’s complaint alleges that in June 2015, to cover up his improper allocation of the trust assets, Reifler created fictitious documents and forged counter-party signatures to make it appear as if the assets had been reallocated into permissible investments.
The SEC’s complaint charges Reifler with violating the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The complaint seeks a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and a penalty. The complaint also names three entities as relief defendants, which the SEC alleges were controlled by Reifler and received investor funds from the alleged scheme.
The SEC’s investigation was conducted by Marc D. Ricchiute and supervised by Jason J. Burt in the Denver Regional Office. The litigation will be handled by Christopher M. Martin.