September 30, 2010 – Benjamin Lee Grant, of Boston, Massachusetts, allegedly ran his brokerage firm, Sage Advisory Group, LLC, as a massive investment scam. The Securities and Exchange Commission (“SEC”) filed a complaint that alleges Grant fraudulently enticed more than 300 customers with over $100 million in assets to join his firm. Apparently, Grant recruited clients whose accounts he managed at his former employer, Wedbush Morgan Securities, shortly after his departure in September 2005.
The SEC claims that Grant was a registered representative of Wedbush and almost all of his accounts were by First Wilshire Securities Management, a California investment adviser. Apparently, days after resigning from his position at Wedbush, Grant sent a letter to his former clients on October 4, 2005 advising them that they should switch their accounts to his new operation, Sage. The complaint alleges that Grant’s letter told his former clients that Sage was formed solely to manage their funds and First Wilshire suggested moving their accounts from Wedbush to a discount broker, Charles Schwab & Co.
Grant’s letter also allegedly advised clients that a new fee and commission structure called a “wrap fee” was cheaper according to First Wilshire. The complaint also claims that Grant subsequently told clients that First Wilshire was no longer willing to manage their assets at Wedbush and they had to switch to Sage.
The SEC claims that Grant’s statements were false and misleading because First Wilshire never suggested the departure from Wedbush and never refused to service the client’s accounts. Grant also apparently did not inform clients that he knew the wrap fee structure was more costly. The complaint states that Grant also did not tell clients that the switch to a discount broker resulted in large savings that Grant pocketed instead of passing them on to investors. Apparently, the net result of the transfers was doubling Grant’s salary to $1 million.
The complaint was filed on Tuesday in the U.S. District Court in Massachusetts. The SEC is seeking disgorgement of ill-gotten gains as well as other civil penalties. The Secretary of the Commonwealth of Massachusetts William F. Gavin and the Massachusetts Securities Division assisted the investigation.
Source: SEC, The Boston Globe
If you invested with Sage Advisory Group, LLC and/or Benjamin Lee Grant, or are the victim of some other type of investment fraud, the Law Offices of the attorney, and its affiliates, is prepared to review your situation and potential claim(s) without charge, and will consider representing you on a contingent fee basis, which means that you will not have to pay out of pocket for your legal representation. The firm will take a fee only if we are successful in recovering your assets. , .