The Securities and Exchange Commission on Wednesday charged two men posing as brokers with stealing investor money they raised for limited liability companies they owned and controlled that purportedly held warrants to purchase the common stock of a technology startup company.
The SEC alleges that James R. Trolice and Lee P. Vaccaro raised approximately $6 million from more than 100 investors by creating “a false sense of urgency and exclusivity around the offering, claiming that only a limited amount of warrants were available and that they eventually could be exercised at a very profitable price.”
The SEC’s complaint, filed Wednesday in federal court in Newark, New Jersey, also charges former stockbroker Patrick G. Mackaronis, who received commissions for bringing prospective investors to Trolice and Vaccaro so they could close the sales.
According to the SEC, Trolice further lured investors by showcasing his apparent wealth and hosting elaborate investor parties at his multimillion-dollar home. He also touted his purported track record of bringing startup companies public and obtaining high returns for investors.
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Meanwhile, the SEC states that Trolice allegedly used investor funds to pay his mortgage along with other bills for a credit card, car lease, college tuition and landscaping. Vaccaro allegedly spent at least a quarter-million dollars in investor funds at Las Vegas casinos.
The SEC says neither Trolice nor Vaccaro was registered with the SEC or any state regulator.