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Regulation and Compliance > Litigation

Ex-Broker Gets Over 5 Years in Prison for $2.9M Securities Scheme  

By Jeff Berman

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What You Need to Know

  • Instead of using clients’ funds on legitimate investments, Mark Marchi diverted their money to pay back previous investors and for his own use, according to the DOJ.

A former broker was sentenced to 5.25 years in prison on Wednesday for committing securities fraud to obtain more than $2.8 million from investors, according to the Justice Department.

Instead of placing clients’ funds in legitimate investments, Mark Marchi, 55, of Red Bank, New Jersey, diverted their money for other purposes, including paying back previous investors and for his own personal use, the Justice Department said.

In addition to sentencing Marchi to 63 months in prison, District Court Judge Claire C. Cecchi sentenced him to three years of supervised release and ordered him to pay restitution of $2.87 million, Philip R. Sellinger, U.S. Attorney for the District of New Jersey, announced on Friday.

Marchi previously pleaded guilty in U.S. District Court for the District of New Jersey in Newark before Cecchi to an information that charged the ex-broker with one count of securities fraud.

The original information was filed by Sellinger on May 5, 2022.

According to documents filed in the case and statements made in court, Marchi claimed he was providing investment advisor services to clients. Starting in December 2015, he managed and controlled the firm Precipio Capital, after previously managing and controlling a different investment company, Global Alliance Capital.

Through Global Alliance, Marchi solicited investments from multiple investors and when he ceased operating Global Alliance, he represented to those clients that he rolled over their accounts into Precipio, according to the Justice Department. Marchi also solicited investors to invest directly into Precipio.

Marchi made repeated misrepresentations to his victims, including false claims about the status and performance of investments and false assurances to clients that their investments were profitable. Marchi also provided victims with falsified records, including trading records, performance reports, and K-1 forms, according to the Justice Department.

One of the firms Marchi was affiliated with, Raymond Brown Securities Corp., was expelled from the industry by the National Association of Securities Dealers on Oct. 18, 1989, according to FINRA’s BrokerCheck website.

Marchi was barred by the NYSE Division of Enforcement on June 3, 1999, according to BrokerCheck.

(Image: Shutterstock)

Jeff Berman

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