The allegations read: Plaintiff securities and exchange commission ("sec" or "commission"), for its complaint against defendants scott j. Hollender ("hollender"), gabriel f. Migliano, jr. ("migliano") and frank m. Vecchio ("vecchio") (collectively, "defendants") and relief defendants gsh empire, inc. ("gsh empire") and 21st century gold & silver inc. ("21st century"), alleges that this matter concerns fraudulent and unregistered broker activity by hollender, migliano, and vecchio. Defendants were among a network of sales agents hired by straightpath venture partners (the "sp fund manager") to solicit investments in private funds (the "sp funds") that purportedly owned shares of private companies that had prospects of "going public" ("pre-ipo shares"). Between approximately november 2017 and november 2021, hollender, migliano, and vecchio successfully solicited a combined total of at least $13 million in sp fund investments from at least 115 investors. To pitch investors on the sp funds, defendants falsely and misleadingly represented that there were no upfront fees associated with their investments and that defendants would only make money through a fee charged on an investor's profits after the relevant company went public. In fact, however, hollender, migliano, and vecchio each received upfront commissions of approximately 10 percent on the investments they successfully solicited. Additionally, while receiving millions of dollars in transaction-based compensation and advising investors on the putative merits of investments in the sp funds - hallmarks of broker activity - defendants were neither registered with the commission as broker-dealers nor affiliated with any commission-registered broker-dealer in violation of the federal securities laws. By virtue of the conduct described in this complaint, vecchio violated section 17(a) of the securities act of 1933, and sections 10(b) and 15(a) of the securities exchange act of 1934 and rule 10b-5 thereunder.
