Robert Allen Gravette and Mark Andrew MacArthur, registered brokers and investment advisers, are named as defendants to a pending civil action instituted against them by the Securities and Exchange Commission (SEC) on the allegations of the breach of their fiduciary duties to their clients and conflict of interests, according to an investigation by attorney for investor losses Alan Rosca.
Attorney for investor losses Alan Rosca, of the Goldman Scarlato & Penny PC law firm, is investigating conduct related to the pending civil action against the investment advisers, Robert Gravette and Mark MacArthur, on the allegation of the breach of their fiduciary duties to their clients and conflict of interests.
Robert Gravette and Mark MacArthur were registered with Ausdal Financial Partners, a Financial Industry Regulatory Authority (FINRA) member firm, when they allegedly carried out the conducts related to the civil action.
Robert Gravette and Mark MacArthur Are Defendants to a Civil Action Instituted by US Securities and Exchange Commission
The investigation of public records by the Goldman Scarlato & Penny attorneys for investor losses reveals that the investment advisers are facing a pending civil action instituted against them by the SEC as reported on their publicly-available FINRA brokercheck pages (CRD#: 1938019, CRD#: 2411397).
The civil action was instituted against them before the U.S. District Court of the Central District of California according to the complaint. Also named as defendants in the action alongside the investment advisers is Criterion Wealth Management Insurance Services, Inc (Criterion); a firm co-owned by the two brokers.
The Securities and Exchange Commission alleged that Robert Gravette and Mark MacArthur alongside their firm, Criterion, have breached the fiduciary duty they owed to their clients by intentionally and glaringly failing to disclose their conflict of interest as it relates to some private placement funds they recommended to their clients.
The Complaint states that between the period of 2014 and 2017, the defendants recommended that their advisory clients invest more than $16 million in four private placement funds, without disclosing that the fund managers had paid them the sum of money in excess of $1 million in side compensation of the recommendations while also charging their clients other commissions on the investment.
The defendants allegedly failed to disclose this material conflict of interest because the side compensation was allegedly recurring and it depended on the ability of the defendants and Criterion to keep their clients invested in the funds. Thus, they recommended the investments continually to their clients. The defendants also failed to disclose some material facts to their clients, therefore, breaching their fiduciary duty. The complaints further alleged that Criterion’s Form ADV was also materially misleading and non-compliant.
The SEC argues that Criterion violated Sections 206(1), 206(2), 206(4), and 207 of the Advisers Act, and that Robert Gravette and Mark MacArthur also violated the same provisions in addition to aiding and abetting Criterion’s violations. The SEC seeks to get a permanent injunction against the defendants prohibiting further violations, disgorgements and also, for other civil penalties to be imposed against Criterion and the other defendants.
It should also be noted that Robert Allen Gravette settled a customer dispute on a similar allegation in September 2018. In this dispute, the client requested for the settlement of their losses arising from private placements purchased by the broker. The client sought $100,000 in damages but the dispute was eventually settled for $42,500.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints mentioned in this article, unless otherwise indicated.
The Goldman Scarlato & Penny PC law firm represents investors who lose money as a result of investment-related fraud or misconduct and is currently investigating conducts related to Robert Allen Gravette and Mark Andrew MacArthur’s pending civil action on the allegation of the breach of their fiduciary duties to their clients and conflict of interests.
The firm takes most cases of this type on a contingency fee basis and advances the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of conducts related Robert Allen Gravette and Mark Andrew MacArthur’s pending civil action on the allegation of the breach of their fiduciary duties to their clients and conflict of interests, may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at email@example.com, or through the contact form on this webpage.