Financial Adviser Induced Investments with False Statements, Stole from Client
According to a press release from the Securities and Exchange Commission (SEC), Nicholas M. Mitsakos, a California-based financial adviser, stole more than $800,000 from a client. Using his company Matrix Capital Markets, LLC, Mr. Mitsakos took in more than $2 million from the client before siphoning off 40% of the investment for his own personal use. The SEC contends that Mitsakos used many false claims in order to attract investments from high net-worth individuals. Unfortunately, high net-worth individuals are often the targets of financial fraudsters. If you have been victimized by a dishonest investment adviser, please contact an experienced Miami investment fraud attorney today to discuss your legal options.
Misrepresentations Were Made to Prospective Investors
The complaint from the SEC details the many different unlawful tactics that Mitsakos used in an effort to gain clients. He attempted to lure investors using false claims about his own investment record, the history of his investment model, the state of his company, the relationships he had with other trusted firms, and the level of scrutiny that his portfolio was experiencing. Some of the specific lies that Mitsakos told prospective clients include:
- The assets he managed: Mitsakos founded his company in the fall of 2013. He first starting seeking outside investments in the spring of 2014. At that point, he was already telling prospective investors that he had $60 million under management. In reality, Mitsakos had no money under management at this time. He continued to use the the $60 million figure in an effort to sell his services, though he never actually managed anywhere near that amount of money.
- His history of returns: Mitsakos gave potential investors financial records that detailed how his investment ‘model’ performed in recent years. Specifically, the records included the performance of the model between 2012 and 2015. During those years, the model allegedly returned between 20% and 66% on an annual basis. Potential clients were told that his model had actually been used to achieve returns. In reality, this model was purely hypothetical. There was no evidence that any trades were actually conducted using the model. Even worse, the SEC contends that the model was produced retroactively. The model was entirely was a fraud.
- Audits and verification: Finally, Mitsakos boasted to prospective investors about his relationship with big banks and nationally-recognized accounting firms. He gave clients documents which indicated that his portfolio had been audited and that his returns had been verified. In reality, no audits ever took place. The SEC believes the Mitsakos simply created these documents out of thin air.
Contact our Miami Investment Fraud Attorneys Today
At Carlson & Associates, P.A., our team has helped many fraud victims recover fair compensation for their losses. Unscrupulous investment advisers must be held accountable for the damage that they have caused. Our firm represents fraud victims throughout South Florida. If you or a loved one has been damaged by investment adviser fraud, please call our office today at 1-(305)-372-9700 to schedule a review of your case.
