SEC Calls for Proceedings Against Imprisoned Ex-Broker
What You Need to Know
The SEC has called for public administrative proceedings against a barred broker serving a five-year prison sentence for fraud.
The former broker caused about $20 million in losses to an insurance company, forcing it to shutter, prosecutors said.
The Securities and Exchange Commission has called for public administrative proceedings against a barred broker who is serving a five-year prison sentence for a fraud that, according to prosecutors, bankrupted the oldest Black-owned insurance company in the U.S. and forced it to liquidate.
In a Feb. 15 order, the SEC said it was “necessary and appropriate in the public interest that public administrative proceedings be instituted” against Bradley C. Reifler, 63, of New York to determine whether allegations that he defrauded the insurance company were true, if he had any defenses against those allegations, and “what, if any, remedial action is appropriate in the public interest.”
The SEC ordered that a public hearing for the purpose of taking evidence be convened at a time and place to be fixed by further order, that Reifler shall file an answer to the allegations contained in the order within 20 days after service of the order, and that the Division of Enforcement and Reifler shall conduct a prehearing conference within 14 days of service of the answer.
If Reifler doesn’t file the directed answer, or fails to appear at a hearing or conference after being duly notified, he “may be deemed in default and the proceedings may be determined against him upon consideration” of the order, the SEC said.
North Carolina Insurer Liquidated
Reifler was sentenced in October to five years in prison for his role in a scheme to defraud a North Carolina-based life insurance company, according to the Justice Department and court documents.
Reifler caused about $20 million in losses to the company, which led to it being ordered into liquidation, Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Eric Shen, inspector in charge of the U.S. Postal Inspection Service Criminal Investigations Group, said in a news release at the time.
The firm was North Carolina Mutual Life Insurance Co., according to court documents filed in related cases. The company, started in 1898, was the oldest Black-owned insurance company in the U.S., according to Insurance Journal.
According to the Justice Department’s Dec. 1, 2020 indictment against Reifler in U.S. District Court for the Middle District of North Carolina and other court documents, the CEO and founder of Forefront Capital Holdings was responsible for investing about $34 million of the insurance company’s assets based on guidelines contained in a trust agreement and investment advisor agreement.
However, instead of investing the assets in secure investment vehicles as required by the agreements, Reifler misappropriated the funds for the benefit of his own companies and then used the funds for improper purposes, according to the Justice Department.
