Nearly six months after Colorado regulators sanctioned former Taylor Capital Management brokers Dennis Mitchell Farrah and Mark Gregory Raezer for selling Madyson Capital real estate investment trust (REIT) and limited partnership (LP) products away from their firm without authorization, FINRA barred Farrah from the securities industry.
Farrah's BrokerCheck file identified the problem products as as Madyson Capital Management short-term real estate notes, REITs, and LPs, with several customers alleging that Farrah misrepresented Madyson Capital Management LLC Limited Partnership units as low-risk, guaranteed, and profitable, while failing to disclose conflicts of interests and omitting material facts related to the products.
The State of Colorado's Securities Division identified Madyson Investments and related companies owned by Joseph David Ryan as a significant problem for investors and retirement funds, going as far as to seek an injunction against Madyson in 2017 for its purported fraud, alleging, amongst others, that Madyson owner Ryan used investor funds for personal use, including $10,000 worth of jewelry and other luxury items.
The complaint and injunction named Madyson Capital Management LLC, Madyson Equity Group LP, Madyson Holdings Inc., Madyson Realty Fund I LLLP, and Madyson Realty Partners LLC as the companies that committed securities fraud.
In January, the Colorado Securities Division revoked Farrah (CRD #2703960)'s state license, barring Farrah from selling securities or associating with licensed broker-dealers in Colorado for his sale of outside securities without the knowledge of firm Taylor Capital Management.
At the time of Farrah's revocation, the state regulator also suspended Raezer (CRD #6439772)'s license for two months.
Although FINRA has not yet sanctioned Raezer, a customer filed a dispute against Raezer in February 2018 alleges fraud and misrepresentation, negligence, and breach of fiduciary duty related to Raezer's sale of the Madyson Capital Management LLC Limited Partnership, claiming Raezer misrepresented the units as low-risk, guaranteed, safe, and profitable.
Farrah's BrokerCheck report also indicates a series of alleged misconduct, beginning with Taylor Capital Management Securities' disclosure of voluntary resignation two weeks before CO's January bar, in which the firm indicated that Farrah allegedly sold away short-term real estate notes without informing the firm or seeking its approval.
Farrah's file continues on with a handful of customer disputes alleging a combined $793,167 in damages for REIT and LP-related misconduct, naming Madyson Capital Management LLC Limited Partnership units and Madyson REIT shares as the products Farrah illicitly sold.
According to the disputes, Farrah allegedly violated Colorado securities laws by misrepresenting the Madyson Capital LP units as low-risk, "guaranteed," and profitable, while failing to disclose numerous conflicts of interests and omitting material facts. Farrah also purportedly misused investor funds, including the misappropriation of assets purchased with investor funds, and breached the fiduciary duty owed to his clients.
His BrokerCheck report lists additional employment at a "senior planning service" in Aurora, Colorado, while the Colorado Securities Commissioner wrote that Madyson Investments have been a real problem for seniors: "The Madyson case has been particularly devastating to investors considering that so many had utilized retirement funds that are now tied up or gone."
If you have invested with ex-Taylor Capital Management brokers Dennis Mitchell Farrah or Mark Gregory Raezer in a Madyson Investments REIT or LP, or with any representative or financial adviser who brazenly misrepresented a securities product as low-risk, guaranteed, profitable, or safe, while omitting material facts and engaging in other illicit conduct that has proven damaging to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.