Investor Lawyers Blog
Syosset, NY-based stockbroker Matthew Eckstein was recently charged with three counts of second-degree grand larceny, third degree grand larceny, and two counts of first-degree scheme to defraud by the Nassau County District Attorney. These charges stem from Mr. Eckstein’s business as a financial advisor in Garden City, NY, and more specifically, allegations that he “betrayed his clients’ trust when he stole their money in a multi-million dollar Ponzi scheme and even pilfered hundred of thousands from the estates of deceased clients” according to Madeline Singas, the Nassau County District Attorney.
FINRA BrokerCheck indicates that Matthew Evan Eckstein’s (CRD# 2997245) career in the securities industry dates back to 1998, when he first began working as a registered representative for Gould, Ambroson & Associates Ltd. (“Gould”) (CRD# 17412) in Garden City, NY. Since September 16, 2015, Mr. Eckstein has been registered at his own broker-dealer, Sisk Investment Services, Inc. (“Sisk”) (CRD# 19406), where he is chief executive and chief compliance officer. On April 27, 2018, FINRA Enforcement filed a Complaint naming Mr. Eckstein as Respondent. As alleged by FINRA, from December 2014 until December 2015, Mr. Eckstein purportedly sold over $1.3 million in supposedly safe private investments akin to CDs to numerous clients.
Publicly available information suggests Mr. Eckstein’s alleged victims are from Massapequa, Seaford, Smithtown, Melville, Staten Island, Brooklyn, Manhattan, Norwalk, CT, Jupiter, FL, and Redlands, CA. In January 2015, Mr. Eckstein allegedly convinced one customer to invest approximately $385,000 into a company, Conmac Funding (“Conmac”), that was touted as a safe, no-risk investment. Further, Mr. Eckstein purportedly assured the client that the investment principal would be returned in two years, with an additional four-percent interest, much like a certificate of deposit. However, as recently reported, when the client requested his money back two years later, he only received $26,699.
According to FINRA Enforcement, Mr. Eckstein’s alleged misconduct involved an investment scheme run by “KB”, a close friend of Eckstein. FINRA’s Complaint alleges that Mr. Eckstein conducted no due diligence on the issuer of the supposedly safe investments, Conmac: “Eckstein never reviewed the Issuer’s books or financial statements and did not know the sources of the Issuer’s funds, the identity of its customers … the default rate on its loans, its overhead, or the number of its employees.” Further, FINRA Enforcement has alleged that Eckstein misrepresented the nature of these private investments in Conmac as “similar to a CD” and “fully guaranteed.”
Included among the claims brought by FINRA Enforcement are allegations that Mr. Eckstein engaged in “selling away” activity in violation of NASD Rule 3040 and FINRA Rule 2010. Specifically, FINRA has alleged that while registered with Gould, Mr. Eckstein “participated in five securities transactions wherein LM, JS, LS, and BV invested $1.28 million…” Brokerage firms like Gould have a duty to ensure that their registered representatives are adequately supervised, and moreover, must take reasonable steps to ensure that their brokers follow all applicable securities rules and regulations, as well as internal policies and procedures. In instances where a financial advisor engages in selling away activity, a member firm like Gould may be held liable for losses sustained by investors. Broker-dealers including Gould must ensure that their supervisory system is reasonable and that client accounts are adequately monitored, as brokerage firms may be found vicariously liable for the misconduct or negligence of a registered representative.
Attorneys at Law Office of Christopher J. Gray, P.C. have successfully resolved a number of disputes on behalf of investors, including cases involving high-risk, illiquid and opaque private placement investments and selling away cases. Investors may contact a securities arbitration attorney by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.