Bradley Carl Mascho of Frederick Maryland a stockbroker formerly employed by Western International Securities Inc. and former Chief Financial Officer of DJB Holdings was sentenced on August 28, 2019 to thirty months in prison for (1) conspiracy to commit securities fraud in reference to his alleged solicitation and receipt of funds from investors for purchases of convertible or promissory notes issued by DJB Holdings and (2) lying under oath when under a Securities Exchange Commission (SEC) investigation in reference to illicit convertible notes sales.
In a parallel matter, Mascho has been charged by SEC in a Complaint alleging that he engaged in a scheme to defraud investors and effected unregistered securities transactions. SEC v. Bradley C. Mascho Civil Action No. 8:17cv2453 (Dec. 1, 2017). According to the Complaint, between 2014 and 2017, when Mascho was Chief Financial Officer of DJBennett, Mascho aided its founder, Dawn J. Bennett, in a fraudulent scheme in which Mascho and Bennett took in more than $20,000,000.00 from investors through unregistered sales of convertible and promissory notes.
The Complaint alleged that false or misleading statements had been made to investors by Mascho about DJBennett’s operations and financial situation; use of investors’ funds at DJBennett; and the risks which investors would be taking through purchasing the promissory notes. Investors who were elderly and inexperienced with investments had been purportedly targeted by Mascho and lied to about the investments. SEC also alleged that customers were provided false information about the use of their investments, as Mascho used investor funds to fund a lavish lifestyle and repay prior investors through an alleged Ponzi scheme. The Complaint stated that Mascho’s conduct was violative of Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, and Securities Act of 1933 Sections 5(a), 5(c) and 17(a).
FINRA Public Disclosure confirms that Mascho has also been barred from associating with any FINRA member in any capacity founded on findings that Mascho obstructed a FINRA investigation into accusations of him, inter alia, effecting securities transactions away from his securities broker dealer employer; engaging in undisclosed outside business activities; and defrauding investors. Letter of Acceptance Waiver and Consent No. 2015047682403 (Jan. 12, 2018). According to the AWC, Mascho was instructed by FINRA personnel under Rule 8210 to provide recorded testimony about the allegations of his potentially fraudulent scheme. Mascho confirmed with FINRA that he received the request but would not testify. FINRA found his conduct violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure also reveals that Mascho is referenced in thirteen customer initiated investment related disputes containing allegations of his violative conduct while employed by securities broker dealers including Western International Securities Inc. Specifically, a customer filed an investment related arbitration claim concerning Mascho’s activities where the customer sought $353,000.00 in damages based upon allegations that false or misleading statements and omissions had been made to the customer concerning promissory notes; poor advice was provided regarding investments; fiduciary duties were not complied with; and the customer had been defrauded during the period in which Mascho was associated with Western International Securities Inc. FINRA Arbitration No. 18-03080 (Aug. 30, 2018).
Mascho is the subject of another customer initiated investment related arbitration claim in which the customer requested $2,444,388.00 in damages supported by accusations that investment recommendations failed to be suitable; the customer had been defrauded; unfounded statements and omissions had been made; and fiduciary duties owed to the customer were breached in regard to the transactions Mascho executed at Western International Securities. FINRA Arbitration No. 19-00517 (Feb. 18, 2019). Also, a customer filed an investment related arbitration claim involving Mascho’s conduct where the customer sought $427,538.00 in damages based upon accusations that fiduciary obligations were not complied with; misrepresentations and omissions had been made; investment recommendations failed to be suitable; unregistered securities were solicited and sold by Mascho; and fraudulent transactions caused the customer to experience undue losses. FINRA Arbitration No. 19-00748 (Mar. 21, 2019).
Mascho is the subject of another customer initiated investment related arbitration claim in which the customer requested as much as $500,000.00 in damages supported by allegations including breach of fiduciary, bad investment advice, and fraudulent exchange traded fund and promissory note investments. FINRA Arbitration No. 19-00977 (Apr. 9, 2019). An additional customer initiated investment related arbitration claim in regard to Mascho’s activities was settled for $22,500.00 in damages founded on allegations of a fiduciary duty being violated by Mascho; and negligent trades or representations having been made on investment transactions which led the customer to sustain unwarranted losses. FINRA Arbitration No. 19-00608 (May 20, 2019).
Mascho is also referenced in a customer initiated investment related arbitration claim which was settled to resolve accusations that fiduciary obligations to the customer were violated; investment recommendations were not suitable; and the customer had been defrauded as it pertained to exchanged traded fund and promissory notes transactions. FINRA Arbitration No. 19-01012 (Aug. 14, 2019).
