On November 24, 2014, Cleveland-based U.S. District Judge Patricia Gaughan, sentenced Anthony Davian, a Copley financial adviser, to 57 months in prison for running scam that siphoned $1.78 million from unsuspecting investors including Davian’s friends and family. Judge Gaughan stated at sentencing at Davian ripped-off his investor victims by repeatedly lying to them about their funds and she ordered Davian to re-pay the victims of the scheme.
“(Investors) have absolutely nothing to show for their investments,” Gaughan said. “The investments were worthless when they were made, and they’re worthless now.”
Last year, the U.S. Securities and Exchange Commission charged Davian and his hedge fund, Davian Capital Advisers, LLC, with defrauding investors. The SEC’s complaint characterized Davian Capital as “nothing more than Davian’s personal piggy bank,” and stated that Davian’s promise of profits and returns on investments were “figments of Davian’s imagination.”
Davian, 35, pleaded guilty earlier this year to fourteen (14) counts including securities fraud, mail fraud, wire fraud and money laundering. The charges allege that from 2008 to 2013, hedge fund ran by Davian, promoted and sold securities to at least twenty (20) investors across several states and resulted in $1.78 million in overall losses to investors. Davian allegedly told investors that he sold securities in the form of shares in the various funds he created and controlled, however, much of the money he received from investors went into his own pocket. Davian’s lavish purchases included a $40,000 Audi Q7 Prestige, a new office and land for a $3 million home in Bath Township according to the U.S. Attorney handling the case. Federal agents found that Davian convinced investors’ into giving him hundreds of thousands of dollars by claiming to manage hundreds of millions of dollars in investments.
During sentencing, Davian apologized to investors, including Jeffrey McCarter, a Tennessee doctor who lost $800,000 in the scheme. In documents, McCarter said he learned of Davian through his online newsletter that included investing tips.
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This securities law blog post about investor fraud is provided as a general informational service to clients and friends of Feinstein Law, PA and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. © Feinstein Law, PA, 2014.
For more information concerning the rules and regulations affecting the going public direct transactions, direct public offerings, or dual listing, please contact Feinstein Law, PA at (619) 990-7491 or by email at Todd@Feinsteinlawfirm.com or JDunsmoor@Feinsteinlawfirm.com. Please note that the prior results discussed herein do not guarantee similar outcomes. Todd Feinstein is admitted in Florida and Jonathan Dunsmoor is admitted in New York.
