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Were You a Victim of Former Western International Securities, Inc. Broker Bradley Mascho?

Posted on Tuesday, April 17th, 2018 at 11:49 am    

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There are options for customers of former Western International Securities, Inc. broker Bradley Mascho (CRD# 2039720) who is alleged to take part in the DJBennett fraud scheme. Mascho was registered with Western International Securities, Inc. in Frederick, Maryland from 2009 to December 2017, when he was terminated regarding the Securities and Exchange Commission (SEC) investigation regarding, “Violations of Section 5(a) and (c), Section 17(a) of Securities Act of 1933, Section 10(b) and 10b-5 of the Securities Exchange Act of 1934.”

In December 2019, the Securities and Exchange Commission (SEC) barred Mascho for, “making misleading and false statements to investors and/or advisory clients in connection with soliciting them to invest in DJB Holdings, and misappropriating funds from investors and/or advisory clients and using those funds for his personal use or to repay other investors.” According to his BrokerCheck, “Mascho was convicted of felonies involving conspiracy to commit securities fraud and making a false statement… Mascho engaged in dishonest and unethical practices by, among other things, making misleading and false statements to investors and/or advisory clients and misappropriating funds from investors and/or advisory clients.”

In January 2018, FINRA barred Mascho after he consented to the sanction and to the entry of findings that he refused to appear for a FINRA-requested on-the-record testimony during an investigation into his potential serious violations, including fraud, undisclosed outside business activities, and private securities transactions.

In December 2017, the SEC opened an investigation regarding a fraud that raised more than $20 million from at least 46 investors through an unregistered offering, DJBennett convertible and promissory notes. The fraud was orchestrated by the founder and owner of DJB Holdings, LLC (DJBennett), a Washington D.C.-based retail sports apparel business, and aided and abetted by Mascho, Chief Financial Officer of DJBennett, and DJBennett’s owner’s long-time confidante. According to the SEC complaint, the scheme involved fraudulently misrepresenting and omitting material facts to investors regarding DJBennett’s financial condition and operating performance, the risks associated with the investment, and the intended use of investor proceeds.

Bennett had lost a significant portion of her financial advisory clientele and her company DJBennett was not profitable. Additionally, it is alleged that Bennett accumulated a variety of personal financial obligations, but she continued to spend considerable sums to fund her extravagant lifestyle. To finance her company DJBennett, Bennett allegedly targeted elderly and financially unsophisticated investors by materially misrepresenting the company’s profitability and by claiming the company had the resources to pay annual rates of return as high as 15%. Bennett told investors that the funds would be used for corporate purposes, however it is alleged that she used the proceeds for a variety of improper purposes, including payments to earlier investors in the nature of Ponzi scheme, to service debt, and a variety of luxuries, such as jewelry, high-end clothing, mystics, and a $500,000 annual lease for a luxury suite at AT&T Stadium in Dallas. She also lied about DJBennett’s extensive liabilities and the risks associated with the investment.

The SEC also alleges that Bennett and Mascho employed a variety of other fraudulent devices to further the scheme and to avoid detection, including circumventing security systems, obtaining fraudulent loans to meet investor demands for interest and redemption payments, and directing investors to execute new short-term promissory notes (and backdating the note to the original investment date) as part of a misguided effort to place their activities outside the jurisdiction of the antifraud provisions of the federal securities laws.

Pending civil charges include conspiracy to commit securities fraud, securities fraud; aiding and abetting; and wire fraud conspiracy.

Mascho has been the subject of 13 customer complaints between 2015 and 2019, according to his CRD report:

April 2019. “Unsuitable Recommendations; Fraud; Breach of Fiduciary Duty.” The customer sought $100,000.01 in damages and the case was settled for $8,500.

March 2019. “Offer and Sale of an Unregistered Securities; Unsuitable Recommendations, Misrepresentations and Omissions of Material Fact; Fraud; Breach of Fiduciary Duty.” The customer is seeking $427,538 in damages.

February 2019. “Negligence; Breach of Fiduciary Duty.” The customer sought $250,000 in damages and the case was settled for $22,500.

February 2019. “Breach of Fiduciary Duty; Fraud; Unsuitable Recommendations, Misrepresentations & Omission of Material Fact.” The customer is seeking $2,444,388 in this pending customer complaint.

November 2018. “Breach of Fiduciary Duty; Fraud; Unsuitable Recommendations, Misrepresentations & Omission of Material Fact.” The customer is seeking $150,000 in this pending customer complaint.

November 2018. “Breach of Fiduciary Duty; Fraud; Unsuitable Recommendations, Misrepresentations & Omission of Material Fact.” The customer is seeking $250,000 in this pending customer complaint.

November 2018. “Breach of Fiduciary Duty; Fraud; Unsuitable Recommendations, Misrepresentations & Omission of Material Fact.” The customer is seeking $200,000 in this pending customer complaint.

November 2018. “Breach of Fiduciary Duty.” The customer is seeking $500,000 in this pending customer complaint.

November 2018. “Breach of Fiduciary Duty; Fraud; Unsuitable Recommendations, Misrepresentations & Omission of Material Fact.” The customer is seeking $353,000 in this pending customer complaint.

June 2018. “Allegations Unsuitable Recommendations.” The customer sought $545,000 in damages and the case was settled for $80,000.

April 2018. “Allegations Unsuitable recommendations.” The customer sought $800,000 in damages and the case was settled for $247,500.

March 2018. “Unsuitable recommendations; Misrepresentation.” The customer is seeking $5,000 in damages in this pending complaint.

March 2015. “Unsuitable recommendations.” The customer sought $305,000 in damages and the case was settled for $137,500.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Western International Securities, Inc. may be liable for investment or other losses suffered by Mascho’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.