State Regulator Goes After Unregistered Rep, Fines Funds $250,000

Massachusetts regulators have charged Charles N. Nilosek and Position Benefits as acting as unregistered investment advisors and selling risky unregistered securities, mainly to seniors. In a related matter, Secretary of the Commonwealth William F. Galvin ordered three California-based mortgage investment funds to pay a $250,000 civil penalty, offer to return money invested by 144 Massachusetts residents and accept censure by the state’s securities division.

The administrative complaint against Nilosek and his firm states that, despite their lack of registration, they “hold themselves out as investment advisors while selling Massachusetts residents an unregistered risky security that they represent as a safe and secure investment.”

“Presenting these mortgages as guaranteed investments is a cruel hoax, especially when older people are encouraged to move into them from retirement accounts or certificates of deposit,” Galvin said in a statement. “Investors need to check that the person presenting himself as an investment advisor is, in fact, registered to be one, not a salesman in investor advisor clothing.”

The state’s complaint alleges that Nilosek and Position Benefits used radio and television advertising, Internet and social media communications, and radio programs such as “Life is Great New England” and “Money Matters. The parties “were paid more than $607,000 over 19 months to solicit investors to purchase the Woodbridge instruments,” it said.

“In reality, Position Benefits and Nilosek lure Massachusetts investors into meetings with the promise of investment advice, and pull a ‘bait and switch,’ offering guarantees and promises of safety on a product that offers neither,” the complaint explained.