Imagine entrusting the financial security of your family to a trusted adviser, only to find out that they have been playing high-stakes games with your hard-earned cash. What would you think if this person used your money to piggyback on their own future? Gold Star families faced this grim reality when they trusted Caz L. Craffy as their financial advisor.
Craffy was in an ideal position, as a native of Colts Neck in New Jersey, to educate families about general finance. Between May 2018 and November 2022, Craffy allegedly used his position to trick grieving families into transferring benefits into brokerages he managed. This is akin to the wolf in sheep’s clothing who uses his position of trust as a way to lure unsuspecting people into a financial trap.
Craffy began a reckless trading spree once he had the money. He traded unauthorized and recommended strategies with high risks that didn’t match his client’s risk profiles or their investment goals. As if he were playing high-risk poker with other people’s funds, he had no regard for potential consequences.
Over a 54-month period, Craffy’s customers paid more than $1.64 in fees and commissions. The lion’s portion of this money went into his pocket. In the meantime, Craffy’s accounts suffered losses totaling approximately $1.79m, and unrealized losses could be as high as $1.8m. In one instance, he allegedly misappropriated $50k from the IRA of a child whose parent died in active service.
You can also find out more about the following: SEC Craffy is now being charged with violations of multiple sections in the Securities Act and Securities Exchange Act. What does this mean to the Gold Star Families who have already suffered? Can they ever recover funds that were recklessly wasted?
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The SEC is conducting an investigation to find answers to these questions, and to bring justice to those who have been victimized by this alleged fraud. The SEC also thanked various agencies for their help in the investigation, including the U.S. Attorney’s Office for the District of New Jersey and the Financial Industry Regulatory Authority.
This case serves as a reminder to be vigilant when trusting others with our financial future. This raises the question of how we can ensure that people in positions or trust do not abuse their power to gain personal benefit. We, as a community, need to ask this question in order to protect our most vulnerable residents from such egregious cases of financial misconduct.