The SEC accused Mr. Reifler of fraud and misappropriating client funds.
The Sonn Law Group is investigating allegations that Bradley Reifler committed fraud. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.
Bradley Reifler (CRD#: 1589414) was named in an SEC complaint filed on March 12, 2020. In the complaint, the SEC alleged that Reifler’s fraudulent conduct began when he raised $6 million from an investor and then misappropriated those funds.
Specifically, Reifler raised $6 million from a Nevada-Chartered trust company (“Nevada-Chartered Company”) by representing that an entity that he controlled would use the funds to provide short-term financing to telecommunications companies.
Instead, Reifler misappropriated the $6 million and used the funds to support real-estate development projects in which he had an interest and purchase the rights to manage the investments of a reinsurance trust with a $34 million portfolio of assets (“Reinsurance Trust”). The Reinsurance Trust held the assets for the benefit of a North Carolina life insurance company and was required to hold sufficient assets and to manage them so the insurance company could pay life insurance claims as they become due.
Reifler’s fraudulent conduct continued when, while serving as the investment adviser to the Reinsurance Trust, he misappropriated millions more by again diverting money into entities and ventures that he owned and controlled. As an investment adviser to the Reinsurance Trust, Reifler owed it a fiduciary duty to act in its best interest and to fully disclose all material facts about the advisory relationship, including disclosing any conflicts of interest that might cause Reifler to put his own interests before those of the Reinsurance Trust.
In violation of this fiduciary duty, Reifler misused the Reinsurance Trust assets to pay off investors in another failing venture he operated and make investments in entities in which he had an interest and acted contrary to the Reinsurance Trust governing documents, which required Reifler to invest in conservative investments.
When it was discovered that Reifler had improperly invested the Reinsurance Trust’s assets in illiquid and highly risky investments, Reifler forged documents and counterparty signatures to conceal the true nature and value of the Reinsurance Trust assets and make it appear that he had, in fact, invested the assets properly. Reifler transferred millions of dollars of investor money to the Relief Defendants, all of which he owned or controlled. Each of the Relief Defendants received illicit proceeds from Reifler’s fraud to which they have no legitimate claim.
As a result of these frauds, Reifler and the Relief Defendants improperly received more than $16 million of ill-gotten gains and forced a North Carolina life insurance company into receivership because of its inability to pay policyholder claims. Reifler’s conduct in connection with the Nevada-Chartered Company violates the Securities Act and Exchange Act, and his conduct with respect to the Reinsurance Trust violates the Securities Act, the Exchange Act, and the Advisers Act.
Reifler has violated, and unless restrained and enjoined will continue to violate Section 10(b) and Rule 10b-5 of the Exchange Act, Section 17(a) of the Securities Act, and Sections 206(1) and 206(2) of the Advisers Act.
The SEC is requesting that the Court enter an order enjoining Reifler from further violations of these provisions and from participating in the issuance, purchase, offer, or sale of any security, except in his own personal account; requiring Reifler to pay disgorgement and prejudgment interest thereon on a joint and several basis with the Relief Defendants; and requiring Reifler to pay third-tier civil penalties, since he acted fraudulently and created substantial losses.
Reifler has five other disclosures listed on his BrokerCheck report.
September 2017 Regulatory Judgment
- Status: On Appeal
- Allegations: “Reifler was named a respondent in a FINRA complaint alleging that he failed to comply with his obligation to provide full and complete testimony by refusing to answer questions asked by FINRA during on-the-record testimony. The complaint alleges that FINRA conducted an investigation into a closed-end mutual fund that Reifler created while associated with his member firm. The closed-end mutual fund was marketed as a high-yield fund that would provide non-accredited investors access to those investment opportunities previously reserved for the one percent. FINRA began an investigation of the closed-end mutual fund in order to determine, among other things, whether FINRA member firms or persons associated with FINRA member firms (collectively FINRA Members) had solicited and executed the closed-end mutual fund investments, whether FINRA Members had performed due diligence on the closed-end mutual fund, and whether FINRA Members had determined the suitability of the closed-end mutual fund investments for investors. The complaint also alleges that as part of the investigation, FINRA requested that Reifler appear for on-the-record testimonies. While Reifler appeared for testimony, he refused to answer many questions asked by FINRA relating to his involvement in the closed-end mutual fund and the use of the closed-end mutual fund investors’ money.”
- Resolution: Pending Appeal
- Sanctions: Bar
- Registration Capacities Affected: All capacities
- Duration: Indefinite
- Start Date: 9/30/2019
- Regulator Statement: “Hearing Panel decision rendered August 7, 2018 wherein Reifler is barred from association with any FINRA member in all capacities. Reifler is also ordered to pay the costs of the hearing in the amount of $2,968.81, consisting of an administrative fee of $750 and the cost of the transcript. The sanctions are based on findings that he refused to answer questions asked by FINRA in two sessions of on-the-record testimony in response to an investigation into whether Reifler perpetrated a fraudulent scheme to misappropriate millions of dollars. On August 8, 2018, Reifler appealed the decision to the NAC. The sanctions are not in effect pending the review. NAC decision rendered September 30, 2019 wherein Reifler was barred from association with any FINRA member in all capacities and ordered to pay $2,968.81 in hearing costs and $1,500.72 in appeal costs. The sanctions were based on findings that Reifler refused to answer questions asked by FINRA in two sessions of on-the-record testimony in response to an investigation into whether he perpetrated a fraudulent scheme to misappropriate millions of dollars. On October 10, 2019, Reifler appealed the NAC decision to the SEC. The bar is in effect pending review.”
January 2017 Financial Event
- Type: Bankruptcy
- Broker Comment: “Proceedings in FINRA arbitration case #16-01184 against Bradley Carl Reifler were stayed by bankruptcy proceedings in the United States Bankruptcy Court, New York Southern – Poughkeepsie, case #17-35075-cgm.”
July 2016 Regulatory Judgment
- Status: Final
- Initiated By: Massachusetts
- Allegations: “Forefront Capital Markets (“FCM”) and Bradley C. Reifler, FCM’s CEO, failed to report a CFTC order issued against Reifler in registration filings. The CFTC order, issued against Reifler and other parties in 1999, ordered that the parties cease and desist violative conduct, and that they jointly pay a civil monetary penalty in the amount of $59,033.”
- Resolution: Order
- Sanctions: Cease and Desist
- Sanctions: Censure
- Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
- Sanctions: “A.Respondents shall permanently cease and desist from activity in violation of the Act and Regulations; B.Respondents shall be censured by the Division; C.Respondents shall fully pay an administrative fine of $36,000; D.Respondents shall update FCM’s Form BD and Reifler’s Form U4 to reflect complete and accurate information regarding the CFTC order issued against Reifler in 1999; E.Respondents shall notify all Massachusetts customers with which they did business during the Relevant Time Period, in writing, of the action taken by the CFTC against Reifler and Reifler Trading Corporation, and the resultant Order issued by the Massachusetts Securities Division related to Reifler’s failure to disclose, and this correspondence will include the following information: a.details as to the outcome of the CFTC action, including: i. that a cease and desist order was issued against Reifler and his former firm, and ii.that Reifler and his former firm, RTC, agreed jointly to pay a civil monetary penalty in the amount of $59,033; b.an explanation to customers that neither FCM nor Reifler disclosed the CFTC action and its outcome until over a year after these entities were already registered to do business in Massachusetts; and c.an explanation that from May 10, 2013, until the date when FCM’s Form BD and Reifler’s U4 were amended to fully and properly disclose the CFTC action, the information filed and disclosed by FCM and Reifler, related to the CFTC action, was materially incomplete in that it did not fully disclose the nature of the case brought against Reifler and his former firm, and it did not explain that an order was issued against Reifler and his former firm compelling them to cease and desist certain activities”
- Judgment/Lien Amount: $5,884,312.50
- Judgment/Lien Type: Civil
- Broker Comment: “I guaranteed a loan that was made to Pali employees so they could buy stock at a significant discount to the market. I received no compensation or interest for this guarantee. After I discovered wrongdoing at the firm, I resigned and notified Chase to foreclose on the loan. They elected not to primarily, I believe, to maintain Pali’s monthly revenue contribution. Two+ years after I resigned, Pali went bankrupt. The trustee said to my counsel last year that there will be a “substantial” sum of money to pay toward Chase. There is no offset language so I need to know how much Pali will pay toward its obligation before I try to settle with Chase.”
February 2020 Customer Dispute
- Status: Pending
- Allegations: “During the period of approximately 2011 through February 2020, the customers allege that the Registered Representative invested their account(s) in unsuitable investments and breached his fiduciary duty.”
- Damage Amount Requested: $100,000.00
- Broker Comment: “It appears as though I was named solely as a result of my capacity as a senior affiliated Registered Representative of the Branch. Due to my long tenure and experience at the Branch, I was identified on all customer statements as a point of contact for any service related issues. I had no direct or indirect relationship or contact with the claimants. I vehemently deny any wrongdoing and assert that the customer’s allegations are completely without merit. I will vigorously defend this matter to the fullest extent of the law.”
December 1997 Regulatory Judgment
- Initiated By: Commodity Futures Trading Commission
- Allegations: “On December 17, 1997, the Commodity Futures Trading Commission (The “Commission”) filed a complaint and notice of hearing against Bradley C. Reifler (“Reifler”). The complaint charged, among other violations, that Reifler violated section 4K(1) of the Commodity Exchange Act, as amended (the “Act”), 7 U.S.C. §6K(1)(1994), and sections 1.35(A-1) and 166.4 of the regulations promulgated thereunder (the “regulations”), 17 C.F.R. §§1.35(A-1) and 166.4 (1997).
- Resolution: Order
- Sanctions: Cease and Desist
Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
Contact Us Today
The Sonn Law Group is currently investigating allegations that Bradley Reifler committed fraud. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.