Close Close

Regulation and Compliance > Federal Regulation > SEC

SEC: Barred Broker Bilked Retirees to Fund E-Cigarette Business

Your article was successfully shared with the contacts you provided.

The Securities and Exchange Commission charged a former broker, his company and his business partner in an alleged real estate investment scheme utilizing high-pressure sales tactics to pilfer $6 million from retirees and other investors while using the proceeds to fund the broker’s lavish lifestyle and start e-cigarette businesses.

The SEC alleges that Leonard Vincent Lombardo — who once worked at Stratton Oakmont, the firm depicted in the movie “The Wolf of Wall Street” — operated the scheme from behind the scenes at his Long Island-based company, The Leonard Vincent Group (TLVG), with assistance from its CFO, Brian Hudlin.

Lombardo was barred in 2000 from the brokerage industry for misleading clients and making unauthorized transactions in their accounts, according to the Financial Industry Regulatory Authority’s BrokerCheck. He worked at Stratton Oakmont for less than a year, in 1994, according to his record.

According to the SEC’s complaint, more than 100 investors were defrauded with false claims that their money would be invested in distressed real estate, and some were told their investments had increased by more than 50% in a matter of months when in fact there were no actual earnings on their investments. 

Lombardo allegedly invested only a small fraction of investor money in real estate and used the bulk of it for separate business ventures into the e-cigarette industry and personal expenses such as car payments on his BMW and Mercedes, marina fees on his boat and visits to tanning salons.

“As alleged in our complaint, retirees entrusted their money to TLVG believing they were investing in high-return real estate investments, not electronic cigarettes or trips to the tanning salon,” said Andrew Calamari, director of the SEC’s New York Regional Office, in a statement. “This is another case involving a fraudster trying to look the part of a wealthy financial advisor while doing nothing more than trying to separate people from their hard-earned money.”

The SEC says it received complaints from investors about how their investments were being handled, and the agency identified the perpetrators and gathered evidence to hold them accountable. 

“Investors should be suspicious anytime they are guaranteed high investment returns,” said Lori Schock, director of the SEC’s Office of Investor Education and Advocacy, in a statement. “High investment returns typically involve high risk, and cannot be guaranteed.”

TLVG and Lombardo agreed to pay disgorgement of more than $5.8 million. Lombardo pleaded guilty in a parallel criminal case brought by the U.S. Attorney’s Office for the Eastern District of New York. Without admitting or denying the SEC’s allegations, Hudlin agreed to pay a $40,000 penalty. The settlements are subject to court approval.

—Related on ThinkAdvisor:


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.