New York Stockbroker Accused of Fraud

Rochester stockbroker fraud attorneyFormer New York stockbroker Mark Hotton was accused by the financial industry regulators of stealing at least $5.9 million from his customers and rerouting at least $2.6 million from his customers’ Oppenheimer brokerage accounts to his outside business activities.

Hotton was also sued recently by the producers of a Broadway musical for allegedly swindling them by claiming that he would raise $4.5 million to finance the musical, in exchange for a “finder’s fee” of $60 000.

In 2006, Hotton was sued by a customer for investing, without authorization, $4 million of the customer’s money in real estate transactions. In the process, Hotton forged contracts, mortgages, account statements and directed the money into a corporation he created with a similar name to the company in which he was supposedly investing his customer’s money, according to teh customer’s complaint. The lawsuit was eventually settled, but was not reported to the Financial Industry Regulatory Authority (“FINRA”), as required by the FINRA rules, according to the regulators’ case against Hotton.

Hotton continued with his alleged violations, convincing more clients to invest in securities that didn’t exist or companies that he controlled, charged the regulators. Part of the money was taken out of the client’s accounts with the aid of a forged letter that supposedly was written by the client and allowed him to withdraw the money, according to FINRA’s charges. He then transferred the money to an account he controlled. and used the money for personal expenses and paying clients to prevent the uncovering of his scam, according to the regulators.

Mark Hotton was also charged, along with five other persons, with conspiracy to commit wire fraud and money laundering relating to an alleged scheme in which Hotton and his co-defendants fraudulently raised more than $3.7 million, according to the indictment. Most of Hotton’s alleged victims were factoring companies, which typically give businesses money in exchange for a percentage of the value of the invoices or accounts receivable bought.

Hotton and his alleged accomplices operated three electrical contracting companies in Farmingdale, New York. They created false invoices which supposedly represented debts of third parties, according to court papers. The defendants are accused of creating $9.8 million in false accounts receivable and duping their victims into buying the supposed debts with aid of false documents.

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