In July 2012, the United States Securities & Exchange Commission brought an action against Emanuel L. Sarris, Sr. “Manny Sarris” of Doylestown Pennsylvania for four counts of federal securities fraud.
According to the SEC complaint, from 2001 through 2009, Sarris conned over 70 individuals to invest approximately $30 million in a private hedge fund that purportedly traded in foreign currencies, but which was actually a $105 million Ponzi scheme.
Sarris’ investor victims were provided front row box seats for Philadelphia Eagles football games, were invited to lavish dinners and cocktail parties at Sarris’ luxurious New Hope home, invited to VIP Golf Outings, and were allowed to stay as guests in Sarris’ Jupiter, Florida home.
Prior to forming Sarris Financial Group, operating out of Newtown, Pennsylvania, Sarris was a stockbroker with an extensive history of customer initiated, investment related complaints and FINRA arbitrations alleging fraud and deceptive sales practices.
Sarris was also subject to a myriad of regulatory actions, was caught lying to securities regulators in 2000, and was ultimately barred by the State of New Jersey. Sarris, then set up shop as unregistered investment advisor operating from a brokerage firm branch office, holding himself out as among other things, a “Registered Financial Consultant” and Certified Investment Specialist.” The “RFC”designation is available to members the International Association of Financial Consultants, (located in 6784 Ayala Ave. cor. Rufino St., Legaspi Village, Makati City, Philippines 1229). The “CIS” or Certified Investment Specialist designation, appears to be a designation conferred upon the members of Investment Management Consultants Association.
As a matter of disclosure in the fall of 2011, on behalf of nine different groups of investors, in the states of Pennsylvania, Delaware, Florida and North Carolina, the Guiliano Law firm brought securities arbitration actions before the Financial Industry Regulatory Authority or FINRA against the securities broker-dealer’s branch office from which Manny Sarris and others sold and operated their Ponzi scheme. The broker-dealer Respondent filed nine separate complaints in four separate federal courts seeking to enjoin the arbitrations, which the investors successfully consolidated before the Judicial Panel on Multidistrict Litigation, and were returned to Pennsylvania, where following motions for summary judgment, these cases were settled in mediation for confidential terms.
According to the SEC complaint, between January 2004 and May 2009, the Ponzi scheme paid to Sarris at least $1,560,818 in incentive fees, and further concealed that between January 2004 and March 2009, the Ponzi scheme channeled at least $1,436,859 to Sarris offshore bank accounts.
Thereafter, in addition to the SEC action, seeking $3 million in disgorgement, a group of investors in Philadelphia had obtained a $6.9 million judgment, and another action filed against Sarris in the United States District Court in Illinois, sought $24 million.
Sarris of course would stand for none of that, so he moved to Florida (home of the unlimited homestead exemption), and you guessed it, he declared bankruptcy.
On January 26, 2016, the United States Securities & Exchange Commission released its Final Cease and Desist Order against Manny Sarris. The Cease and Desist Order does not say much, just that Sarris is barred, from the securities industry for life. The Cease and Desist Order however references a January 26, 2016 Final Judgment. Usually, the SEC is proud of their final judgment and publicly posts it, but here, I guess it is not. I obtained my copy from PACER. The SEC settled their action for $380,000, subject to the approval of the bankruptcy court.
The $6,941,012.60 claim from the Philadelphia action was compromised for $225,000, and the Illinois case, which showed $24,826,714 in allowed claims, was compromised or settled for a total of $30,000.
At the time Sarris declared bankruptcy, he disclosed approximately $3 million in personal property and real property, a BWM, a Rolex watch, a million dollar retirement account and a $700,000 home in Jupiter Florida. As a result of the settlement, Sarris apparently gets to keep his Rolex, the BWM, his house in Florida, $250,000 in other investments and about $400,000 in his retirement account.
Not a bad deal.
*It should be noted however that Mr. Sarris was never charged with a crime of any kind, and that the SEC action against him alleging the violation of Sections 5(a) and 5(c) of the Securities Act, the violations of Section 17(a)(1) of the Securities Act, and Section 10(b) of the Exchange Act, and Rule 10b-5 as promulgated thereunder, are by definition civil claims.