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Galvin Goes After Former Stratton Oakmont Broker

Disgraced “Wolf of Wall Street” broker Jordan Belfort is no longer doing business in the securities industry, but some of his cohorts in crime continue to be on the radar of regulators.

As reported yesterday by Investment News, one of those brokers is Christopher Veale, who was charged Wednesday by Massachusetts Secretary of the Commonwealth William F. Galvin of engaging in abusive sales practices, churning a client’s account and using markups to conceal commissions in the account of an 81-year-old investor.

Regulators allege that the elderly Rhode Island investor put $873,622 into his account with Veale. He also was charged $319,818 in commissions and hidden fees. A colleague of Veale’s at Brookville Capital Partners LLC, Ali Habib Mayar, also is named in Galvin’s complaint.

The elderly client ultimately suffered out-of-pocket losses of almost $1.6 million as a result of the brokers’ alleged actions and Brookville Capital’s alleged failure to supervise their actions, the complaint says.

“[The] Senior Investor attempted to close his Brookville account twice, but both times was convinced to keep the account open. Specifically, Veale persuaded Senior Investor that he could turn the account around and promised Senior Investor that he would significantly increase profits, but that the only way Veale could make that happen was if Senior Investor put in another $200,000,” Galvin stated in the complaint.

The complaint seeks to revoke the registration of the two representatives and firm and permanently bar them from the securities industry in Massachusetts. Rhode Island also has filed a similar action against the two brokers and Brookville.

Veale infamously began his career in the securities industry in 1995 with the now-defunct Stratton Oakmont. Stratton Oakmont is credited with being one of the first ‘boiler room’ operations whose brokers aggressively cold called potential investors and pushed them to buy penny stocks that were manipulated by Stratton Oakmont.

Stratton Oakmont and its creator, Belfort, are now the subject of Hollywood in the movie, “The Wolf Wall Street.”

After Stratton Oakmont was put out of business by federal authorities, Veale went on to work with some 17 other broker/dealers, including the now-defunct John Thomas Financial.  That company closed its doors last year over fraud allegations. In December 2013, Anastasios “Tommy” Belesis, the founder of John Thomas Financial, agreed to be banned from the securities industry in a settlement with U.S. regulators who had accused him of defrauding investors in two hedge funds.

Veale currently works for Legend Securities, according to his BrokerCheck report with the Financial Industry Regulatory Authority (FINRA).

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