Glen A. Galemmo, a Cincinnati stockbroker associated with Landmark Investment Group, Inc., plead guilty in United States District Court to criminal charges that between 2005 and July 2013, he operated a Ponzi scheme that took in at least $100 million from investors.
According to the federal indictment Galemmo operated the Queen City Investment Fund, along with a dozen other investment entities, including Sentinel Strategy Fund, LTD; Sentinel Holdings Property, LLC; Sentinel Blackbox, LLC; Jones Morris Group, LLC; Yasuda Fund; Yasuda Advisors, LLC; PSIS, LLC; QC Power Strategies Fund Sweep Account, LLC; Glen Rock, LLC; QC Power Strategies Fund, LLC and; QC Power Strategies Fund II, LLC, Midwest Hoops Sports Complex and Sportsplus, LLC.
Galemmo Was Registered With Several Broker Dealers
Since 1993, Galemmo was registered as a stockbroker with at least ten different broker dealers, of which, at least five were expelled from FINRA registration for violation of the federal securities laws. Most recently, from December 2009 through December 2012, Galemmo was registered with Landmark Investment Group, Inc. of Secaucus, New Jersey.
During the course of his association with Landmark Investment Group, Inc. Galemmo touted his experience as a trader, and promised lucrative returns to potential investors through investments in stocks, bonds, futures, and commodities. Investors also were provided with fictitious promotional materials showing that his funds had consistently generated above-average returns, including a return of nearly 20% in 2008 when the S&P 500 experienced a -38.49% loss. Potential investors were assured that Galemmo obtained annual audits of Queen City, and were provided with monthly statements showing steady returns.
According to the federal indictment, Galemmo raised approximately $100 million from individuals, trusts, and charitable organizations.
However, Galemmo was only able to pay these rates of return not through trading stocks and bonds, as promised but from using incoming investor funds to pay existing investors. Galemmo also created fictitious trading and account statements that were distributed to investors and falsified audits by using the merely the names of auditing firms with whom neither he nor his funds had any relationship.
Instead, Galemmo stole or converted investor funds for a variety of unauthorized uses, including the purchase of real estate, the payment of fictional interest and principal distributions, and even to operate other businesses. The federal indictment also seeks the forfeiture of more than $1.7 million from Galemmo bank accounts, an office building, two homes in Cincinnati and Florida, and five automobiles.
On November 5, 2013, Galemmo was expelled from FINRA, not because of his role in the Ponzi schemes, but instead based upon his failure to cooperate with securities regulators.
Firm’s Duty to Supervise
Notwithstanding Galemmo’s conduct, Landmark Investment Group, Inc., and Galemmo’s prior employers have an absolute duty to supervise his activities during the course of his registration or association with them as a licensed stockbroker. Accordingly, Landmark Investment Group, Inc., and Galemmo’s prior employers may be held responsible for his conduct based upon the failure to supervise, and as a control pursuant to Section 20(a) of the Exchange Act of 1934, 15 U.S.C. § 78t.
Customers purchasing these unregistered securities from Galemmo ought to have their investment accounts reviewed by a professional to determine if they have been the victim of the fraud and may have the opportunity to seek recovery from Landmark Investment Group, Inc., or any of Galemmo’s prior employers.
Guiliano Law Group
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