The allegations read: The securities and exchange commission (\\u201ccommission\\u201d) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to section 8a of the securities act of 1933 (\\u201csecurities act\\u201d), and sections 203(e) and 203(k) of the investment advisers act of 1940 (\\u201cadvisers act\\u201d) against goldstone financial group, llc (\\u201cgfg\\u201d); pursuant to section 8a of the securities act and sections 203(f) and 203(k) of the advisers act against anthony pellegrino; and pursuant to section 8a of the securities act, section 15(b) of the securities exchange act of 1934 (\\u201cexchange act\\u201d), sections 203(f) and 203(k) of the advisers act, and section 9(b) of the investment company act of 1940 (\\u201cinvestment company act\\u201d) against michael pellegrino (collectively, the \\u201crespondents\\u201d). The commission finds that from at least may 2017 through june 2018, the respondents offered and sold $37 million of 1 global capital llc (\\u201c1 global\\u201d) securities to their advisory clients and insurance and annuity customers in unregistered transactions and did not adequately disclose to their clients the fees that they received from 1 global. In total, michael pellegrino and anthony pellegrino, through gfg, received approximately $1.6 million in fees from 1 global for selling the securities. 1 global marketed its investment as a safe and secure alternative to the stock market and baselessly claimed that investing in 1 global\\u2019s merchant cash advance business would achieve high single-digit or low double-digit annual returns. Like other 1 global sales agents, anthony pellegrino and michael pellegrino repeated those claims to prospective investors. Unbeknownst to respondents or their clients, 1 global\\u2019s business was a fraud. 1 global and its chairman and chief executive officer carl ruderman (\\u201cruderman\\u201d) were misrepresenting how they were using investor money, syphoning off millions in investor funds to fund ruderman\\u2019s luxury lifestyle and operate unrelated businesses. 1 global\\u2019s business came to a crashing halt when it filed for bankruptcy in july 2018, leaving many of respondents\\u2019 clients and thousands of other investors with hundreds of millions of dollars in losses. During the time respondents offered and sold 1 global securities, 1 global did not register its securities offering with the commission, and there was no applicable exemption for this offering. As a result of the conduct described herein, respondents willfully violated section 206(2) of the advisers act, and sections 5(a) and (c) of the securities act.
