On June 3, 2014, the Securities and Exchange Commission (“SEC”) filed an emergency enforcement action against Scott Valente (“Valente”) and The Eliv Group, LLC (“The Eliv Group”), his one-man advisory firm based out of Albany, New York, in order to stop their alleged ongoing fraud. In its Complaint, the SEC alleges that since at least November 2010 through the present, Valente and The Eliv Group fraudulently lured approximately eighty (80) individual and unsophisticated investors who mainly reside in the Albany and Warwick, New York area to become advisory clients and invest more than $8.8 million. Valente and The Eliv allegedly made various misrepresentations to potential customers, including that they have achieved consistent and outsized, positive returns and that clients’ principal was “guaranteed” by a large money market fund. Instead, Valente and The Eliv Group sustained investment losses for each of the full three years The Eliv Group had been in existence, and customers’ funds were not “guaranteed” or backed by money market funds. According to the SEC Complaint, on The Eliv Group website, Valente claimed that he had a 30-year record of investment experience “dedicated to the highest standards of service” when in fact he had filed for bankruptcy twice and was permanently expelled from the broker-dealer industry in 2009 based on the Financial Industry Regulatory Authority’s findings that he had engaged in serial misconduct against numerous customers.
The SEC alleges that at the same time Valente was making various misrepresentations to customers, he was also secretly misappropriating customer funds through substantial cash withdrawals of at least $2.66 million in order to fund his lavish lifestyle, including personal home improvement expenses, mortgage payments, jewelry purchases, and a vacation condominium. In order to end this alleged ongoing fraud and preserve clients’ funds, the SEC is seeking to freeze Valente and The Eliv Group’s assets, allow expedited discovery and prevent the destruction of documents, require verified accountings, and require Valente and The Eliv Group to pay disgorgement of ill-gotten gains, plus prejudgment interest and civil penalties.
Lax & Neville has extensive experience in successfully prosecuting claims on behalf of customers who have suffered losses as a result of their investment advisory relationships. Additionally, Lax & Neville LLP has nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Please contact our team of attorneys for a consultation at (212) 696-1999.