Craig Anthony Zabala of Harlem New York a stockbroker formerly registered with John W. Loofbourrow Associates and CEO of Concorde Group Holdings has been charged by Securities and Exchange Commission (SEC) with making misrepresentations to investors and misappropriating their funds. Securities and Exchange Commission v. Craig A. Zabala et al. Case No. 1:20-cv-07880 (Sept. 24, 2020).
According to the Complaint, from February of 2015 to October of 2020, a total of $4,380,000.00 had been raised from 17 investors by Zabala for purposes of helping Concorde Group Holdings become a merchant bank. The Complaint alleges that the largest investor of Concorde Group Holdings was led to believe that Zabala was $1,000,000.00 short of accumulating $25,000,000.00 in investor funds. The regulator indicated that no more than $5,000,000.00 had been raised by Concorde Group Holdings when Zabala’s statement to the largest investor was made. SEC alleges that Zabala’s representations made it appear as though Concorde Group Holdings was financially stable.
The Complaint alleges that $3,170,000.00 in investor funds had been misappropriated by Zabala. At least $1,970,000.00 was used for the benefit of Zabala and his partner while $1,200,000.00 had been used to make Ponzi-like payments to those who invested in Concorde Group Inc. SEC contended that Concorde Group Holdings did not do anything meaningful in regard to establishing its business. SEC indicated that Zabala violated Securities Exchange Act of 1934 Section 10(b), Rule 10b-5 and Securities Act of 1933 Section 17(a).
Zabala has also been criminally charged by United States Attorney’s Office with one count of wire fraud and one count of securities fraud. Zabala allegedly lied to investors regarding how their money would be used and who was actually investing in these enterprises. He faces a maximum $5,000,000.00 fine and 20-year prison sentence.
Zabala has also been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that he neglected to cooperate with its investigation into accusations of his private securities transactions and outside business activities while registered with John W. Loofbourrow Associates. Letter of Acceptance Waiver and Consent No. 2019061086301 (Aug. 27, 2019). According to the AWC, on May 17, 2019, Zabala was asked by FINRA to provide information and documents concerning his outside activities. Zabala furnished an incomplete response by June 14, 2019 and then declined to supplement that response as required. FINRA determined that Zabala’s refusal to cooperate in the investigation constituted the violation of FINRA Rules 2010 and 8210.
FINRA Public Disclosure additionally confirms that on October 22, 2020, a customer filed an investment related FINRA securities arbitration claim concerning Zabala’s conduct in which the customer sought $800,000.00 in damages founded on allegations that the customer was advised to invest in Concorde Group Holdings resulting in damages. FINRA Arbitration No. 20-03565. The claim alleges that the customer’s Concorde Group Holdings investment was a Ponzi scheme.
Zabala was registered with John W. Loofbourrow Associates between February 7, 2015 and April 29, 2019. He has also been Chief Executive Officer and President of Concorde Group Holdings Inc., DBL Holdings LLC (Drexel Burnham Lambert), Blackhawk Capital Group BDC Inc., Concorde Investment Managers LLC and Concorde Europe.