Securities Arbitration Lawyers BlogJason Galanis Pleads Guilty in $63 Million Tribal Bond Scheme
Jason Galanis pled guilty to charges that he convinced an Oglala Sioux tribal entity to issue $63 million in tribal bonds, having associates peddle those bonds on unsuspecting investors and collecting the proceeds of the sale.
Our attorneys opened an investigation into the matter and Burnham Securities, Inc.’s (CRD# 22549) alleged role in the scheme last year.
In May 2016, the Securities and Exchange Commission (“SEC”) filed a complaint against a host of individuals, including notorious securities fraudsters Jason Galanis and his father John Galanis for defrauding investors in sham Native American tribal bonds.
The SEC complaint alleges that Galanis and his associates convinced a Native America tribal corporation affiliated with the Wakpamni District of the Oglala Sioux Nation to issue limited recourse bonds that the father-son duo had already structured. Instead of investing the bond proceeds as promised, the complaint alleges, the money wound up in a bank account in Florida belonging to a Galanis and associates-controlled company.
Galanis, allegedly, used two other individuals, Devon D. Archer and Bevan T. Cooney to gain control over Burnham Securities to effectuate their scheme. Additionally, Galanis sold the sham bonds through Hughes Capital Management, LLC and Atlantic Asset Management LLC (CRD# 107440), two investment advisory funds Galanis gained control of.
According to the complaint, Burnham used various entities to serve as placement agent of the scheme to facilitate transactions with customers. The entities included, according to the complaint, Burnham Financial group, BAM Holdings, LLC; Burnham Asset Management Corporation (CRD# 104960) and Rosemont Seneca Bohai LLC.
Galanis’ guilty plea follows a guilty plea in another scheme involving the stock of Gerova Financial Group. Similar to the Gerova case, when the judge questioned Galanis as to whether or not he knew what he was doing was wrong and illegal, Galanis responded in the affirmative.
As part of the guilty plea in the tribal bonds scheme, Galanis agreed to forfeit more than $43 million. Galanis faces up to 30 years in prison that could run consecutively with whatever sentence he receives in connection to the Gerova pump-and-dump scheme.
Before a broker-dealer endorses, sells, and/or acts a placement agent for particular offerings, it has a duty to its customers to perform adequate due diligence on the investment. The broker-dealer is required to thoroughly vet the company to ascertain whether or not the investment will be fruitful or not. This includes going through the records, books, and financials to ascertain if the company is legitimate.
If you have purchased these tribal bonds through Burnham Securities, Hughes Capital Management, LLC, or Atlantic Asset Management LLC, you may be eligible to recover some or all of your lost investment.
Silver Law Group represents the interests of investors who have been the victims of investment fraud. If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.