Litigation Releases (Scott J. Hollender, Gabriel F. Migliano, Jr. and Frank M. Vecchio)

Scott J. Hollender, Gabriel F. Migliano, Jr. and Frank M. Vecchio

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26106 / September 13, 2024

Securities and Exchange Commission v. Scott J. Hollender, Gabriel F. Migliano, Jr. and Frank M. Vecchio), No. 1:23-cv-02456 (S.D.N.Y. filed Mar. 23, 2023)

SEC Obtains Final Judgment Imposing Over $600,000 in Monetary Relief Against Alleged Unregistered Broker

On September 10, 2024, the U.S. District Court for the Southern District of New York entered a final consent judgment against Frank M. Vecchio, enjoining him from violating certain provisions of the federal securities laws and ordering disgorgement and civil monetary penalties.

The SEC's complaint, filed on March 23, 2023, alleged that between August 2018 and November 2021, Vecchio actively solicited investments for interests in shares of pre-IPO companies on behalf of StraightPath Venture Partners LLC through funds that were set up as series LLCs, each of which purported to acquire shares of a single pre-IPO company. Vecchio allegedly provided investors with marketing materials, advised investors on the supposed merits of the investments, and received transaction-based compensation, all hallmarks of a broker, despite not being registered as a broker. As alleged in the complaint, Vecchio solicited at least $2.7 million in investments from at least 21 investors, and even though Vecchio received upfront commissions of approximately 10 percent on investments he successfully solicited, Vecchio falsely told investors that there were no upfront fees associated with their investments. According to the complaint, Vecchio received at least approximately $479,000 in transaction-based compensation.

The final judgment enjoins Vecchio from violating Section 17(a) of the Securities Act of 1933 [15 U.S.C. § 77q(a)] and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 [15 U.S.C. § 78j(b); 15 U.S.C. § 78o(a)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. The judgment orders Vecchio to pay disgorgement of $479,821.84 with prejudgment interest thereon of $64,427.93 and imposes a civil monetary penalty in the amount of $90,000.00.

The SEC's litigation in this matter is ongoing with respect to the remaining defendants.

The SEC's litigation is being led by Sushila P. Rao and Michael S. DiBattista of the New York Regional Office, with assistance from Megan R. Genet, Tian Wen, Douglas J. Smith, and Steven G. Rawlings, and is being supervised by Sheldon L. Pollock and Daniel Loss.

Public link

Please use the above public link if you want to share this noodl on another website.