How Investors Can Sue Former Paulson Investment Company LLC Broker Kevin Graetz
Posted on Saturday, June 9th, 2018 at 7:08 am
Erez Law is currently investigating former Paulson Investment Company LLC broker Kevin Graetz (CRD# 1935982) regarding involvement in the Belize Infrastructure Fund I, LLC, which is believed to be a Ponzi scheme. Graetz was registered with Paulson Investment Company LLC in New York, New York from 2013 until May 2017, when he was terminated regarding, “Terminated subsequent to initiation of customer-related arbitration claim alleging fraud, negligence, unjust enrichment.”
In August 2020, the Securities and Exchange Commission (SEC) announced charges against Minish “Joe” Hede and Graetz for acting as unregistered brokers in the sale of securities issued by Belize Infrastructure Fund I, LLC (Belize Fund).
According to the SEC’s complaint, “Hede and Graetz sold approximately $9.6 million worth of Belize Fund notes to their customers at the brokerage firm where they were then employed, even though the firm had already declined to approve the Belize Fund’s notes for offer and sale to its customers. As alleged, by selling a security that was not approved by the firm, Hede and Graetz engaged in a prohibited practice called “selling away.” The complaint alleges that Hede and Graetz profited through the commissions from the sales, while the firm’s customers suffered significant losses. The SEC charged Belize Fund and its owner, Brent Borland, in 2018, alleging that Borland misappropriated more than $5.98 million of funds obtained from investors in Belize Fund notes and used the stolen principal to fund his family’s lavish lifestyle.”
In November 2017, FINRA barred Graetz after he failed to respond to FINRA request for information.
In May 2017, Graetz was sanctioned to a $10,000 in civil and administrative penalty and fine and was suspended for six months following allegations that he failed to timely update his Form U4 to disclose tax liens totaling over $1 million within FINRA’s 30-day reporting deadline.
Graetz has been the subject of eight customer complaints between 2001 and 2017, two of which were denied and two were closed without action, according to his CRD report. One recent complained was regarding:
March 2019. “Claimant alleges that Mr. Graetz sold him unregistered, fraudulent, and unapproved investments during February 2015.” The customer sought $500,000 in damages and the case was settled for $225,000.
April 2017. “Customer alleges fraud, negligent misrepresentations, negligence, and unjust enrichment.” The customer sought $1 million in damages and the case was settled fo $165,000.
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, Paulson Investment Company LLC may be liable for investment or other losses suffered by Graetz’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.