Federal prosecutors and the SEC recently filed separate but related complaints against Dawn J. Bennett, a 28-year industry veteran, alleging that she conducted a Ponzi-like scheme through her investment company, DJB Holdings, LLC. Bennett worked out of Washington, DC.
According to the complaints filed in Maryland federal court, Bennett and her firm sold convertible notes and promissory notes to investors, many of them elderly, telling victims they were investing in a luxury sports apparel company. From 2014 to 2017, she raised $20 million from 46 investors. She allegedly used the funds raised to repay early investors, purchase high-end jewelry and clothes and rent a suite at the NFL Dallas Cowboy’s stadium in Texas.
In a separate matter, the SEC barred Bennett from the securities industry approximately one year ago. She was being investigated for misrepresentations regarding the amount of assets under management at her firm and the performance of those assets. She allegedly made these misrepresentations repeatedly in marketing pieces and on the radio show she hosted, “Financial Myth Busting With Dawn Bennett.”
She contested the authority of the administrative judge hearing the matter by refusing to appear at the hearing.
To no one’s surprise, the judge ruled in the SEC’s favor and barred her from the industry. He also imposed a $600,000 fine and ordered disgorgement of $556,102.
Bennett is appealing the administrative judge’s decision.
But that’s not all.
Bennett first began working in the securities industry in 1987 at Wheat First Securities. She worked at Western International Securities from 2009 until November of 2015 when she was permitted to resign.
Bennett’s BrokerCheck report indicates that the reason she was permitted to resign was that the firm discovered that her company had entered into promissory notes with firm customers without disclosure to the firm (presumably the subject of the recently filed civil and criminal complaints in Maryland).
She is also the subject of a current FINRA investigation regarding “conversion, fraud, and private securities transactions.”
Her BrokerCheck report further indicates that she is currently the subject of six pending customer disputes, variously alleging unsuitability and misrepresentation, with total claimed damages of over $1.1 million, filed on or after January 2016. One complaint during that period is reported as denied.
But her story is not over.
Her report indicates that between 2013 and 2015 there were five customer disputes either settled or resolved by an arbitration award. The total amount of those settlements/awards is approximately $1.423 million.
All of these settlements/awards relate to Bennett’s employment at Western International.
Lastly, in 1995 she settled a customer dispute for $450,000.
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