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The SEC fines and bars Michael Pellegrino’s firm for violating a revenue-sharing agreement. Goldstone Financial Group and the firm’s co-founders allegedly didn’t disclose that they earned fees from the sale of 1 Global Capital securities. According to the commission, the 1 Global Capital fraud scam garnered more than $320 million from over 3,600 investors across the country.
Michael claimed he, is now the president of Artists Management Agency and founded The Authors World.com.
Michael Pellegrino who claims to be the founder of “The Authors World” has established a never-before-seen platform that is being shared on a worldwide scale. The Authors World claims that they connect readers and authors by fostering a global community.
We look at 34 different data points when analyzing and rating online money-earning opportunities. Once the research on these data points is submitted, expert contributors reach out to the company’s customers and associates to get more insight into their operation. Finally, all the collected information is presented in the form of this expert review.
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The overall goal of TheAuthors World.Com is to give people a global forum to express themselves. Michael, claims that he is in conjunction with Sherry D’Agostino, and also he further claims that he wants readers from all over the world to be a part of a community that allows them to share their voices with other readers. At the same time, Michael Pellegrino being a self-absorbed man claims that he wants authors to have a global platform to share their work with readers worldwide. Traditional publishing houses’ business practices have shifted considerably.
Michael Pellegrino being an ignorant and self-absorbed man shows off his fame and mentions that he has been published in numerous publications, including Hustle and Soul Magazine, Book Boys Podcast, Heart of Hollywood Magazine, Your Purpose and Business Podcast, and others.
Michael Pellegrino, President of Artists Management Agency and one of Hollywood’s most elite and powerful talent brokers, understands the world of books. Michael Pellegrino claims that he has spent the majority of his life in the entertainment industry, having worked with The Four Tops, Ronnie McNeir, Larry Braggs, Ice-T, Coco, Jermaine Jackson, Marlon Jackson, Hulk Hogan, and many others.
Michael Pellegrino- SEC bars adviser who sold 1 Global Capital fraud
Michael Pellegrino was the principal and co-founder of Goldstone Financial Group, a registered investment advisor (RIA) in the Chicago suburbs with $298.5 million in assets under management.
The Securities and Exchange Commission barred a registered investment adviser and his firm on Monday for selling $37 million of investment fraud, 1 Global Capital, between May 2017 and June 2018.
Michael Pellegrino, 47, was the principal and co-founder of Goldstone Financial Group, an RIA in Chicago’s suburbs with $298.5 million in assets under management.
According to the SEC, the firm’s principal and owner, Michael Pellegrino and Anthony Pellegrino, got about $1.6 million in fees from 1 Global for selling the securities. That’s a rate of 4.3%, which is significantly more than the generally quoted 1% rate that RIAs charge clients.
Michael Pellegrino did not return a phone seeking comment on Tuesday. According to his Investment Adviser Public Disclosure profile, he has six pending customer grievances.
Michael Pellegrino, Anthony Pellegrino, and the firm reached an agreement with the SEC that did not admit or reject the commission’s conclusions. In addition, the firm was forced to pay a $70,000 fine and hire an independent compliance expert.
The SEC launched an inquiry into the $283 million loan fraud in July 2018, which was offered, at least in part, through a network of unregistered brokers and financial advisers.
In Hallandale Beach, Florida, 1 Global Capital and another lender under the same management issued small business loans known as direct merchant cash advances, or unsecured, short-term commercial lending.
According to the SEC, 1 Global advertised its investment as a safe and secure alternative to the stock market and falsely promised that investing in 1 Global’s merchant cash advance company would result in annual returns in the high single digits or low double digits.
According to the SEC, Anthony Pellegrino and Michael Pellegrino, like other 1 Global sales agents, repeated those statements to prospective clients. According to the SEC, 1 Global’s business was a fraud, unbeknownst to Pellegrino, their firm, or their clients.
1 Global and its chairman and CEO, Carl Ruderman, were misrepresenting how they were spending investor funds, siphoning off millions to fund Ruderman’s lavish lifestyle and unrelated businesses. When 1 Global declared bankruptcy in July 2018, it left many of the advisers’ and firms’ clients, as well as thousands of other investors, with hundreds of millions of dollars in damages.
According to the SEC, once 1 Global declared bankruptcy, Goldstone Financial Group donated monies to negotiate a settlement with all of its 1 Global investors, restoring all referral fees received from 1 Global plus over $700,000 in extra funds.
Anthony Pellegrino provided around $1.3 million of his personal funds to this global settlement. A new chief compliance officer was also engaged by the firm.
Summary Of the Case
- Respondents offered and sold $37 million in 1 Global Capital LLC (“1 Global”) securities to their advisory clients and insurance and annuity customers in unregistered transactions from at least May 2017 to June 2018, and did not adequately disclose to their clients the fees that they received from 1 Global. Michael Pellegrino and Anthony Pellegrino got about $1.6 million in fees from 1 Global for selling the securities through GFG.
- 1 Global marketed its investment as a safe and secure alternative to the stock market, and it falsely stated that investing in 1 Global’s merchant cash advance company was a safe and secure investment.
- Would generate annual profits in the high single digits or low double digits. Anthony Pellegrino and Michael Pellegrino, like other 1 Global sales agents, repeated those statements to prospective investors.
- 1 Global’s operation was a deception, unbeknownst to Respondents or their clients. 1 Global and its chairman and CEO Carl Ruderman (“Ruderman”) misrepresented how they used investor cash, siphoning off millions in investor funds to fund Ruderman’s lavish lifestyle and unrelated businesses. A crashing halt when it filed for bankruptcy in July 2018, leaving many of the Respondents’ clients and thousands of other investors with hundreds of millions of dollars in losses.
- 1 Global did not register its securities offering with the Commission during the period Respondents offered and sold 1 Global securities, and there was no applicable exemption for this offering.
Reference- Goldstone Financial Group, LLC, Anthony Pellegrino and Michael Pellegrino (sec.gov)
Revenue Sharing Agreement
A revenue-sharing agreement is a legal document between two parties in which one side agrees to pay the other a proportion of earnings or revenues in exchange for the right to use something. This contract permits a corporation to profit from a product or service that is directly related to the primary operation of the company.
For example, a music producer and a record company may enter into an agreement in which the producer agrees to pay the record business 25% of any money generated through CD sales. In this situation, income sharing is employed by the record label to recoup expenditures associated with producing and promoting the artist.
Conclusion
Revenue sharing is an adaptable and effective technique that helps enterprises, stakeholders, and consumers. Businesses can realize the full potential of revenue sharing by understanding diverse models, applying them across industries, addressing legal and regulatory concerns, and adhering to best practices.
Looking ahead, we should expect further innovation in business models and technology to create new opportunities and problems in the area of revenue sharing. Businesses can embrace the power of revenue sharing to enhance cooperation, boost performance, and create long-term value for all stakeholders by remaining educated and agile.
Given the potentially complex tax implications of revenue-sharing agreements, contact with a tax services specialist is highly suggested. These experts can help you stay in compliance with tax laws and regulations while also providing useful insights on how to get the most out of your revenue-sharing arrangements. Do not leave your company’s financial health to chance—contact a tax services professional today for assistance in navigating the world of revenue sharing and ensuring a prosperous future for your company and its stakeholders.
Therefore violation of the revenue sharing agreement is a punishable offence and this is why the SEC fined and bared Michael Pellegrino.
These money scams needed to be stopped as people like Michael Pellegrino deceived many of his clients and thought that they would be able to escape after committing the financial frauds. It would be best to avoid these companies who are involved in shady practices.
These investment frauds were increasing rapidly. The government made some strict rules regarding the issue. No one can duped by these fraudsters. And it would also affect the fraud cases in the country.
Why the media media is unable to cover these types of news? Many people are unaware of this kind of fraud.
This news has to be captured by the media but unfortunately, they are unable to do so.
How can someone steal the money of the investors? It is hard to see that these types of fraudulent activities are still taking place in the country. I appreciate the effort of the SEC in taking action on these types of investment fraud cases.
I agree with the author these scams are becoming a very crucial issue for investors and the country. The Security and Exchange Commission would charge extra penalties for these scammers who defrauded numerous individuals for their own wealth.
Many individuals come into the trap of these fraudulent insurance schemes and lose their hard-earned money. These platforms were involved in selling unregistered securities to their clients which would not be acceptable at all.