Mark Marchi – Fraudulent Investment Adviser Caught 2023

The Securities and Exchange Commission today charged New Jersey resident and unregistered investment adviser, Mark Marchi, with defrauding investors in his fund Precipio Capital, LLC.

Mark Marchi was defrauding investors with Precipio Capital LLC. SEC has charged this unregistered investment adviser from New Jersey.

On April 10, 2023, Scott Kovalik, who used to work for BTIG, LLC, won a major court case against the company. In Kovalik’s case against BTIG, LLC, the U.S. District Court for the Southern District of New York found in his favor and gave him $3.2 million in damages. This decision is the last word in a case that started in 2018.

History of the Case

A global financial services business called BTIG, LLC had Scott Kovalik as a managing director. Kovalik left the company in 2016 to start his own company. When he left BTIG, he found out that the company had put limits on his clients so they couldn’t do business with him. Kovalik thought that these limits hurt his clients’ rights, so he sued BTIG for breach of contract, tortious interference, and breaking New York labor laws.

In 2021, the case went to court, and a jury found in Kovalik’s favor on all charges. Damages of $3.2 million were given to him by the judges, but BTIG is appealing the decision. But in April 2023, the United States District Court for the Southern District of New York upheld the jury’s decision and gave Kovalik $3.2 million in damages.

Mark Marchi - Fraudulent Investment Adviser Caught 2023
Mark Marchi – Fraudulent Investment Adviser Caught

Wilson Luna – Fraudulent Business Expert

What the decision means

The fact that the judge sided with Scott Kovalik is important for both workers and employers. It reminds workers that they have legal rights when it comes to their customers. Employers can’t make their workers’ clients do things that go against their rights. Employees can go to court if they think their rights have been abused.

The ruling is a reminder to employers that they need to be careful when putting limits on the clients of their workers. If these rules hurt workers’ rights or break labor laws, the boss could be sued. Employers should make sure that any rules they put on their workers’ clients are legal and don’t break any rules or laws.

According to the SEC’s complaint, between February 2016 and September 2020, Mark Marchi solicited over $2.8 million of investments in Precipio from at least 22 investors by falsely telling them he was profitably trading securities in Precipio’s accounts. In order to conceal his fraud, Marchi allegedly falsified investment documentation, including entering thousands of fake trades into an electronic portal accessed by investors.

The complaint alleges that Mark Marchi misappropriated investor funds by secretly paying over $1.4 million in Ponzi-like disbursements to earlier-in-time investors and by diverting cash from Precipio’s bank account to his own bank accounts. As alleged in the complaint, Mark Marchi is a recidivist who pleaded guilty in 1998 to felony charges of conspiracy to violate the federal securities laws, was barred by the New York Stock Exchange in 1999, and was subject to an Administrative Consent Order imposed by the New Jersey Bureau of Securities in 2015.

What is SEC?

The Securities and Exchange Commission (SEC) in the United States is a federal government regulatory agency that works independently. Its main responsibility is to safeguard investors, ensure the securities markets operate in a fair and orderly manner, and facilitate capital formation.

The SEC’s complaint, filed in the U.S. District Court for the District of New Jersey, charges Mark Marchi with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940, and Rule 206(4)-8 thereunder.

Mark Marchi - Fraudulent Investment Adviser Caught 2023
Mark Marchi – Fraudulent Investment Adviser Caught 2023

Without admitting or denying the complaint’s allegations, Mark Marchi has consented to the entry of a judgment that enjoins him from violating the charged provisions and imposes an officer-and-director bar. The judgment also provides for the court to order, upon motion of the Commission, disgorgement with prejudgment interest and/or a penalty against Mark Marchi, if deemed appropriate. The proposed settlement is subject to court approval.

In a parallel action concerning the same conduct, the U.S. Attorney’s Office for the District of New Jersey today announced criminal charges against Mark Marchi.

The SEC’s investigation was conducted by Rebecca Reilly, Roseann Daniello, and Sandeep Satwalekar. The case is being supervised by Lara Shalov Mehraban and Sheldon L. Pollock. The SEC’s litigation is being handled by Rebecca Reilly. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of New Jersey and the United States Postal Inspection Service.

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