Mark Gregory Raezer of Colorado Springs and Dennis Mitchell Farrah of Aurora had their professional sales representative licenses sanctioned by Colorado Securities Commissioner Gerald Rome. Raezer’s license was suspended for 60 days and Farrah’s was permanently revoked.
The sanctions are part of the fallout from a Division of Securities investigation into Madyson Capital Management and its owner, Joseph David Ryan, whose companies are collectively known as “Madyson Investments” and are the subjects of a court injunction where a receiver has been appointed to control all assets.
“The Madyson case has been particularly devastating to investors considering that so many had utilized retirement funds that are now tied up or gone,” Rome said in a press release. “Sales representatives have an important duty to properly vet investment opportunities for their clients, as well as to accurately disclose risk, and when that does not take place, investors are harmed. So, failure to live up to these requirements can have serious consequences for financial professionals.”
Farrah is barred from reapplying for Colorado licenses, and can have no association with any licensed broker-dealer, investment adviser, or federally covered adviser that conducts business in Colorado.
Rome alleges that Farrah and Raezer solicited and sold securities on behalf of Ryan and Madyson Investments without the knowledge or approval of their employer, Georgia-based Taylor Capital Management, Inc., and failed to record the transactions on the company’s books.
According to the press release: “The securities sold for Madyson Investments, a group of real estate development companies, were neither registered nor exempt from registration with the Division of Securities, part of the Department of Regulatory Agencies, and it is alleged that Mr. Ryan, after failing to disclose the intended use of investor money, utilized funds for a variety of personal expenses. The Division contends that Ryan sold securities to at least 78 Colorado residents totaling over $13 million in investments. Many investors redirected money from retirement accounts after being promised high returns with low risk.”