Dawn Bennett, who was barred from the securities industry by the Securities and Exchange Commission for exaggerating her advisory firm’s assets under management, was hit with a new set of fraud allegations this week.
The Securities and Exchange Commission announced Tuesday that it is charging Bennett with defrauding investors and spending their money on herself. Additionally, the SEC alleges Bennett with making Ponzi-like payments to earlier investors in the scheme.
Bennett, who was a top-ranked Barron’s advisor for three years, allegedly raised more than $20 million by selling notes issued by her company, DJB Holdings LLC, a Washington, D.C. luxury sports apparel firm. Reportedly, Bennett sold the notes to 30 investors while working as an independent broker at Western International Securities.
According to the SEC allegations, she exaggerated the safety of the notes and success of her firm, claiming it was a profitable business able to pay annual returns as high as 15 percent.
In July, the SEC barred Bennett for life from the securities industry and ordered her and registered investment adviser Bennett Group Financial Services to pay $4.1 million in fines and disgorgement for marketing the firm’s assets under management as being as high as $2 billion when they were $407 million.
According to her FINRA BrokerCheck report, Bennett has seven ongoing customer complaints including allegations of unsuitable investments and misrepresentations. Three were filed since May 2016. The largest claim, in April 2014, requests $850,000 for negligence and breach of fiduciary duty. Her broker report states that Western “permitted” her to resign in December “following discovery of promissory notes with firm customers.
The White Law Group has represented several of Dawn Bennett’s clients and continues to investigate the liability that her FINRA registered employer, Western International Securities, may have for failure to properly supervise her.
Those claims generally allege breach of fiduciary duty, negligent supervision, and unsuitability and relate to high-risk bets on gold and gold investments.
For more information on the firm's investigation in to Dawn Bennett, visit Dawn Bennett Barred from the Securities Industry.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit http://www.whitesecuritieslaw.com. For a free consultation with a securities attorney, please call the firm at 888-637-5510.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.