Final Judgment Entered Against Investment Adviser Tarek D. Bahgat in SEC Fraud Case

The Securities and Exchange Commission has secured a final judgement against investment advisor Tarek Bahgat. This judgment was entered by default in a federal district in the Western District of New York. Bahgat is now facing the consequences of alleged shady deals.

What Did Bahgat Do

Have you heard of the phrase? “robbing Peter to pay Paul”? Bahgat appears to have taken it literally. In its complaint, the SEC accuses Bahgat of misappropriating more than $378,000 of funds from seven of his clients. How did he get these funds in his possession?

Imagine a spit-voiced ventriloquist who makes it sound like someone else speaks. Bahgat or his co-defendant Lauramarie Collangelo allegedly impersonated customers during telephone conversations with brokers-dealers who held the clients’ account. Bahgat used this sleight, or sleights of voice, to gain access to the brokerage accounts of some clients. He was able, with this access, to transfer funds from the client’s accounts to him and his company, WealthCFO, LLC.

What’s The Verdict?

Picture a courtroom. The judge’s voice is heard as the gavel falls. “Guilty”. Bahgat has been charged with violating Sections 206(1) & 206(2) of Investment Advisers Act of 40 (“Advisers Act”). The SEC requested permanent injunctions and disgorgement from Bahgat. It also sought prejudgment interests, civil penalties, and interest.

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Bahgat, however, did not reply to the Commission. A default judgment was issued by the court against him. The Court ruled on June 6, 2023 that Bahgat must disgorge $378.021.97 and pay $142,057.43 as prejudgment interests, along with a civil fine of $378.854.00, pursuant to Section 208(e) Advisers Act.

What About the Others?

As if dominoes fell, the final judgments against defendant Colangelo were also entered in favor of defendant WealthCFO. This case is a reminder to be vigilant in your investment dealings. The saying goes that, “after all, it’s only money.” “if something seems too good to be true, it probably is”.

Please refer to the Litigation Releases (No. 23951, Sept. 29, 2017), No. 23951 (Sept. 29, 2017), No. No. 24284 (Sept. 21, 2018).

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