SEC v. Gary C. Snisky, No. LR-22876, District of Colorado (Nov. 21, 2013) — Press Release
raw: Gary C. Snisky
Gary C. Snisky, No. LR-22876 (Nov. 21, 2013)
Gary C
Gary C. Snisky is accused of orchestrating an offering fraud that raised at least $3.8 million from over 40 elderly investors in eight states. Snisky allegedly misrepresented investments in Arete, LLC as safe alternatives to annuities with guaranteed returns, when in reality he misappropriated approximately $2.8 million for personal use and commissions. Snisky is charged with violating antifraud provisions of the securities laws, unregistered broker-dealer provisions, and security registration provisions. The outcome is pending, with the SEC seeking a permanent injunction, disgorgement, a civil monetary penalty, and other relief against Snisky.
Gary C. Snisky is accused of orchestrating an offering fraud that raised at least $3.8 million from over 40 elderly investors in eight states. Snisky allegedly misrepresented investments in Arete, LLC as safe alternatives to annuities with guaranteed returns, when in reality he misappropriated approximately $2.8 million for personal use and commissions. Snisky is charged with violating antifraud provisions of the securities laws, unregistered broker-dealer provisions, and security registration provisions. The outcome is pending, with the SEC seeking a permanent injunction, disgorgement, a civil monetary penalty, and other relief against Snisky. The U.S. Securities and Exchange Commission (SEC) charged Gary C. Snisky with orchestrating a fraudulent investment scheme that raised at least $3.8 million from over 40 elderly investors across eight states by falsely promising guaranteed 6–7% annual returns and principal safety through purported U.S. government-backed bonds. Snisky misappropriated approximately $2.8 million of investor funds for personal use and to pay commissions to his unregistered sales force, while marketing fake investment interests in Arete, LLC as annuity alternatives. The SEC alleged violations of antifraud provisions under Sections 17(a) and 10(b) of the Securities Acts, unregistered broker-dealer and securities registration violations, and aiding and abetting Arete’s failure to register as an investment company. The SEC sought permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and other remedies, with litigation led by Polly A. Atkinson and supported by the U.S. Attorney’s Office, IRS, and FBI. The investigation remains ongoing. The U.S. Securities and Exchange Commission (SEC) charged Gary C. Snisky with orchestrating a fraudulent investment scheme that raised at least $3.8 million from over 40 elderly investors across eight states by falsely promising guaranteed 6%–7% annual returns and principal safety through purported U.S. government-backed bonds. Snisky, through his entity Arete, LLC, misappropriated approximately $2.8 million of investor funds to pay commissions and finance personal expenses, while his sales team targeted annuity holders with misleading claims. The SEC alleged violations of antifraud provisions under Sections 17(a) and 10(b) of the Securities and Exchange Acts, unregistered broker-dealer and securities registration violations, and aiding and abetting an unregistered investment company. The Commission sought permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and other remedies. The investigation, led by the Denver Regional Office with support from the FBI, IRS, and U.S. Attorney’s Office, remains ongoing.
Exhibits & Attached Documents (1)
Extracted insights
- $3.80M $3.8 million $1M–$10M
- $2.80M $2.8 million $1M–$10M
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- Securities and Exchange Commission filed a civil injunctive action against Gary C. Snisky of Longmont, Colorado
- Gary C. Snisky recruited and trained a sales force that raised at least $3.8 million from more than 40 elderly investors in Colorado
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22876 / November 21, 2013 Securities and Exchange Commission v. Snisky, Civil Action No. 13-CV-03149 (D. Colo., filed November 21, 2013) SEC Charges Gary C. Snisky with Offering Fraud The Securities and Exchange Commission (Commission) filed a civil injunctive action on November 21, 2013, in the United States District Court for the District of Colorado against Gary C. Snisky of Longmont, Colorado. The Commission alleges that Snisky recruited and trained a sales force that raised at least $3.8 million from more than 40 elderly investors in Colorado and seven other states by promising guaranteed returns and safety of principal through a purported investment in government secured bonds. The Commission's complaint alleges that Snisky and his sales force targeted mostly elderly, annuity-holding investors to purchase interests in Arete, LLC, a purportedly safe alternative to an annuity that also allowed for withdrawal of principal. Additionally, the complaint alleges that Snisky and his salespeople represented to investors that Arete provided a guaranteed annual return of 6% to 7%, a 10% bonus to compensate for any annuity withdrawal penalties, and that investor funds would be placed in bonds backed by the "full faith and credit" of the United States Government. These representations, however, were false, as Snisky misappropriated approximately $2.8 million in investor funds, mostly in cash withdrawals, and used these funds to pay commissions to his salespeople and for his personal use. The Commission's complaint alleges that Snisky violated the antifraud provisions of the securities laws, Section 17(a) of the Securities Act of 1933 Section 10(b) of the Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Sections 206(1), (2), and (4) of the Advisers Act of 1940 and Rule 206(4)-8 thereunder; violated the unregistered broker-dealer provisions of the securities laws in Section 15(a) of the Exchange Act; violated the security registration provisions of the securities laws in Sections 5(a) and (c) of the Securities Act; and aided and abetted Arete's failure to register as an investment company under Section 7(a) of the Investment Company Act of 1940. The Commission's complaint seeks a permanent injunction, disgorgement plus prejudgment interest, a civil monetary penalty, and other relief against Snisky. The Commission's investigation was conducted in the Denver Regional Office by John C. Martin, Kerry M. Matticks and James A. Scoggins. Polly A. Atkinson will lead the Commission's litigation. The SEC acknowledges the assistance of the U.S. Attorney's Office, the Internal Revenue Service and the Federal Bureau of Investigation for the District of Colorado. The SEC's investigation is continuing. SEC Complaint
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22876 / November 21, 2013 Securities and Exchange Commission v. Snisky, Civil Action No. 13-CV-03149 (D. Colo., filed November 21, 2013) SEC Charges Gary C. Snisky with Offering Fraud The Securities and Exchange Commission (Commission) filed a civil injunctive action on November 21, 2013, in the United States District Court for the District of Colorado against Gary C. Snisky of Longmont, Colorado. The Commission alleges that Snisky recruited and trained a sales force that raised at least $3.8 million from more than 40 elderly investors in Colorado and seven other states by promising guaranteed returns and safety of principal through a purported investment in government secured bonds. The Commission's complaint alleges that Snisky and his sales force targeted mostly elderly, annuity-holding investors to purchase interests in Arete, LLC, a purportedly safe alternative to an annuity that also allowed for withdrawal of principal. Additionally, the complaint alleges that Snisky and his salespeople represented to investors that Arete provided a guaranteed annual return of 6% to 7%, a 10% bonus to compensate for any annuity withdrawal penalties, and that investor funds would be placed in bonds backed by the "full faith and credit" of the United States Government. These representations, however, were false, as Snisky misappropriated approximately $2.8 million in investor funds, mostly in cash withdrawals, and used these funds to pay commissions to his salespeople and for his personal use. The Commission's complaint alleges that Snisky violated the antifraud provisions of the securities laws, Section 17(a) of the Securities Act of 1933 Section 10(b) of the Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Sections 206(1), (2), and (4) of the Advisers Act of 1940 and Rule 206(4)-8 thereunder; violated the unregistered broker-dealer provisions of the securities laws in Section 15(a) of the Exchange Act; violated the security registration provisions of the securities laws in Sections 5(a) and (c) of the Securities Act; and aided and abetted Arete's failure to register as an investment company under Section 7(a) of the Investment Company Act of 1940. The Commission's complaint seeks a permanent injunction, disgorgement plus prejudgment interest, a civil monetary penalty, and other relief against Snisky. The Commission's investigation was conducted in the Denver Regional Office by John C. Martin, Kerry M. Matticks and James A. Scoggins. Polly A. Atkinson will lead the Commission's litigation. The SEC acknowledges the assistance of the U.S. Attorney's Office, the Internal Revenue Service and the Federal Bureau of Investigation for the District of Colorado. The SEC's investigation is continuing. SEC Complaint