CONCERT WealthManagement Inc. and certain other defendants have agreed to settlecharges by the SEC that they solicited investments through unregisteredofferings using materially misleading private placement memoranda.
An SEC investigation found that CONCERT Wealth, its parentCONCERT Global Group Ltd., its CEO Felipe Luna and its former CFO DennisNavarra raised approximately $2.2 million from investors in unregistered privateofferings of CONCERT Global's stock between 2010 and 2013.
In connection with the offerings, CONCERT Global providedinvestors with private placement memoranda that significantly overstated itssubsidiaries' assets under management; overstated its financial results,including reporting profits when it actually lost money; and misrepresented orfailed to disclose conflicts of interest arising from the use of offeringproceeds to pay affiliated entities. CONCERT Wealth also failed to implementadequate policies and procedures to ensure that possible conflicts of interestbetween various Luna-controlled entities were adequately disclosed.
Without admitting or denying the findings, CONCERT Wealthand its parent agreed to pay, on a joint and several liability basis, a$120,000 penalty, and Luna agreed to pay a $60,000 penalty. The SEC's orderalso imposed a cease-and-desist order on CONCERT Wealth, its parent and Luna,and a censure on CONCERT Wealth and Luna. In addition, the SEC's order alsorequires CONCERT Wealth to continue to retain a compliance consultant to assessits policies and procedures concerning potential conflicts of interest. Withoutadmitting or denying the findings, Navarra agreed to a censure and acease-and-desist order.