Did Your Financial Advisor Recommend You Invest in DJBennett Convertible and Promissory Notes?
Posted on Wednesday, August 1st, 2018 at 9:09 am
Erez Law is interested in speaking with investors who may have suffered losses due to investments with DJBennett convertible and promissory notes, which is linked to a $20 million Ponzi Scheme that bilked investors out of their life savings. It is alleged that elderly and financially unsophisticated investors were targeted 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%.
According to an affidavit from August 2017, “DJ Bennett Holding, LLC was offering an annual interest rate of 15% via secured convertible promissory notes. The summary of terms document further stated that ‘the proceeds of the Notes will be used for prototype and product development, patent filings, engineering services and other operating expenses.”
The warning below the customers’ wiring instructions stated: “Investing in this offering involves a high degree of risk Securities sold through this offering are typically not publicly traded and, therefore, are less liquid. Additionally, companies seeking investments like this offering tend to be in earlier stages of development and have not yet been fully tested in the public marketplace.
Investing in this offering requires high risk tolerance, low liquidity concerns, and long-term commitments. Investors must be able to afford to lose their entire investment. Investment products are not FDIC insured, may lose value, and there is no bank guarantee.”
In August 2017, The Securities and Exchange Commission (SEC) charged former Western International Securities, Inc. CEO Dawn Bennett (CRD# 1567051) with running a Ponzi Scheme. The SEC alleged that between December 2014 and July 2017, Bennett raised more than $20 million from at least 46 investors through the unregistered offering of DJBennett convertible and promissory notes, by making materially false and misleading statements and omissions concerning, among other things, DJBennett’s financial condition and operating performance, the risks associated with the investment, and the intended use of investor proceeds.
According to the SEC statement, it is alleged that Western International Securities, Inc. overstated their managed assets by at least $1.5 billion to inflate their “profile and prestige” to a local radio station, a national financial ranking service, and in other advertisements and communication with prospective clients.
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, brokers across the country may be liable for investment or other losses suffered by its 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.