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April 13, 2017 at 03:38 PM
Raymond James said Thursday that it agreed to pay $150 million and settle all claims tied to an EB-5 foreign investor program in which funds were solicited for a Vermont ski resort in exchange for green cards. The deal, though, turned out to be a Ponzi scheme.
The firm asserts that it did not serve “as a placement agent or in any other capacity for the program and none of the investors in the program purchased their investments through Raymond James.”
“Raymond James worked diligently with the [Securities and Exchange Commission]-appointed receiver to structure a settlement that would ensure investors in the program are fairly compensated — either by funding the costs to finish incomplete projects or by returning funds where the underlying construction project is no longer feasible,” it explained in a press release.
“We believe this resolution is fair and representative of our commitment to redressing the victims’ losses in this case,” said General Counsel Jonathan Santelli, in a statement.
The firm also says it has enhanced its supervision program and its anti-money laundering control infrastructure. As of Dec. 31, it had accrued $50 million related to this matter.
“The settlement provides the firm with the right to share in proceeds of certain third-party recoveries that may be obtained by or on behalf of the SEC-appointed receiver or the receivership entities,” it explained.
Joel Burstein, the financial advisor for accounts tied to the scheme, resigned from Raymond James in December. (According to BrokerCheck records, he was with the firm from 2001 to 2016.)
Attorneys representing the investors say that Burstein’s supervisor, Frank Amigo (who was with Raymond James from 2001 to April 11, 2017), also was involved.
